Baffling debt situation

Derp2018

Hello,

I have a pretty convoluted debt situation and was wondering if anyone has any experience of anything similar or can offer any advice! I'll keep it as brief as I can...

- around 12 years ago, I bought a property with my now ex, joint name mortgage for around £90k (zero deposit) and a secured loan of £10k to do up the house, which we did. All payments all packaged up into one of around £500 a month
- We also had around £15k in loans/credit cards between us that were unsecured
- relationship broke down and we made the decision to break up.
- She got a new partner and wanted to stay in the house with him. We agreed that I would take all the unsecured loans into just my name and she would take on the monthly payment (ie mortgage and secured loan) and thus remove financial ties to one another. The bank said that if her and new partner made the payments on the loan/mortgage for a certain amount of time (i think it was 6 months), I could sign my rights to the house over and they could take it on.
- They did make payments for a few years but ignored any communication from me about doing the signover. They did however communicate with the bank about their intention to set this up a few times but never followed through. Around 4-5 years ago, they stopped making full payments and have paid varying amounts each month since then. The house is now in negative equity by around £20k and they are £7k in arrears on payments as well. I've sought legal advice on this issue a few times over the years and been advised that it would cost up to £10k to take my ex to court and force sale of the house, at which point I'd be liable then to pay the negative equity and arrears... so best case scenario of court is tens of thousands in debt. We would both be liable, but as she doesn't work and wouldn't pay, it would all be on me and I'd be chased until it is paid in full. My only other options are to pay the mortgage and loan payment each month whilst ex and new partner live there for the next 20 years.... which is clearly not an option even if i could afford that, or to just leave it and wait for the bank to eventually reposess /see what happens
- Ex and new partner haven't made any payments at all on the mortgage or loansince sometime last year. I've had extensive contact with the bank over the years, who don't seem to have any intention of reposessing the house or doing anything other than adding late charges to the arrears (whether that is because she has children or because it's not worth going to court over a low value property in negative equity I don't know). They call me lots chasing it but always acknowledge that there's nothing I can actually do with this situation to fix it. My ex refuses to discuss it with me at all and does not communicate with the bank either.
- Of the unsecured £15k loan (which is the consolidation, all in my name), I made payments for around 4 years then fell into financial difficulty myself. I went through a debt management company and made lower payments, the last one being in June 2012. When I stopped payments, i didn't hear anything from them (oddly) until very recently, a debt collector got in touch with me about this loan and I'm in the process of deciding whether to set up a payment plan or just let them take me to court over it and get a ccj, as I suspect I'll need to go bankrupt over the house at some point anyway.
- Very oddly, my credit rating has been "excellent" for years and I have had no issues taking on or paying off credit. The unsecured loans all showed as satisfied and the mortgage holding bank had not recorded anything about the mortgage/secured loan being in arrears until a few months ago. My credit rating is now suddenly zero, as the defaulted secured loan is now appearing but it's not really of any consequence to me to be honest as I don't really use credit - I have a credit card but there's never much on there.

If you've made sense of all that then well done! And yes, I know it's a big old mess.

With regards to moving forward on all this:

- I suspect there is nothing I can do re the house and secured loan. Even if I go bankrupt, the mortgage and secured loan won't be affected and I'll still be as liable for it all as I am now.
- With the £15k in debt collections, is there any point at all in trying to pay this off or set up a plan? My now wife and I are due a child in a few weeks and so she is going on maternity leave and our income will drop a lot for at least a year. It'd take a very long time for a dent to be made on this debt and since bankruptcy will be something that looks likely sooner or later for me, paying out what little disposable income we have also seems a little pointless. If I have no assets and my income and expenditure are pretty much equal, can anything like a ccj etc harm me?

Long term, i would love to be able to be debt free, have savings and for my wife and I to buy a home, but I've been advised in the past that if I ever have anything in my name or my wife and i have any joint savings, it could all be taken in a flash should the bank decide to reposess and I'd then be stuck with close to £30k in debt and bankruptcy the only real option.

So the main decision I need help with is whether to engage with the debt collector and start a payment plan, try and stall until it's statute barred (12 months) or just ignore and let them take me to court. And also, does anyone know how likely it is that the mortgage company will just ignore the fact that my ex is not paying indefinitely? It's been 4 years of arrears and 6 months of ex making no payments whatsoever. I'm begging the bank to reposess the property when they call me to ask for payment as i just want some resolution on all this after a decade (even if that resolution is me having to go bankrupt, at least then I can start again in 6 years), but they just keep saying they've not decided what to do and will be in touch...

Any advice appreciated, thank you.

sourcrates

Wow, quite a mess your in, trust me, the mortgage company will not go on without payment for much longer, it will be repossessed.

As for the unsecured debts, are they all in your name ?

You are only liable if the debts are in your name.

Derp2018

Yes, it's all a bit of a mess!!

Re the mortgage company, I've been thinking this for years - just why does anyone pay a mortgage if it's that easy to just ignore and not pay seemingly without any issues beyond standard letters!! I'd love to think that the house will be reposessed and I can just deal with the remaining debt, but I suspect that if the bank ever do look like they're considering reposessing, ex will just make a token payment and the merry go round will start again!

Yes, the unsecured debt is all in my name. I understand that i am liable for them 100%. It's more a question of whether (bearing in mind the house situation that isn't going away any time soon, has destroyed my credit rating and will sooner or later end in a huge great debt for me), my options are to:

a) set up a payment plan on the £15k for as much as i can afford (not a great deal to be honest) and just very slowly chip away at it. Making a payment of course will restart the clock on it being statute barred (12 months left) and there isn't really any benefit in oing this other than it being "the right thing to do" as the house situation is in default and will be indefinitely
b) try and stall the £15k debt collectors for a year without admitting liability for the debt - i don't know how feasable this is, and then deal with the house debt if and when the !!!! hits the fan with the bank
c) just ignore ignore ignore and see if they do take it to court and deal with the resulting ccj.

As I say, I have no assets and very little disposable income now my wife isn't working for the next year. Everything my wife and I have is in her name and isn't able to be touched should I go bankrupt or any action be taken against me.

sourcrates

It does seem a complicated affair, but there is one way out of this for you.

Once the house is re-possessed, any secured debt associated with it becomes unsecured, so if there is a mortgage shortfall, which you say is likely, then that can be included in a bankruptcy, should you wish to go down that route.

The other 15k can be included in that to, as long as it hasn't got to the statute barred stage by then, even if court action has been taken, an insolvency/bankruptcy makes any CCJ null and void.

So you do have an escape route here.