Negative equity problems

LatinDancer

My ex husband and I jointly own 3 BTL properties which were purchased in 2007/8 (not great timing!) Currently they just about cover mortgage & expenses with rental incomes.

We divorced and settled in 2014 however I now discover that he has 'lost' the money he got in the settlement deal and has very little income, assets or savings. After the divorce I bought a house for myself and two daughters.

I'm concerned about the possibility of the expenses in the BTL properties increasing with higher interest rates, and other costs, and that my ex will make no financial contributions. Would a possible solution be to change the ownership from joint owners to tenants in common? Would this mean that he is responsible for 50% of all liabilities?

I envisage everything I've worked for being taken to cover the costs of negative equity whilst my ex husband declares bankruptcy and pays nothing. I'm sure that's his long term plan as he is very revengeful and bitter.

How can I best mitigate me having to pay for his foolishness?

Thank you in advance 🙂

TrickyDicky101

The ownership structure of the properties won't impact the joint and several liability nature of the debt (mortgages) so if your husband does declare bankruptcy, then the lenders will simply come after you for full repayment.

The only real way to mitigate this is to try and force a sale now so that a line is drawn in the sand and potential negative equity gets no worse than it might be currently.

LatinDancer

Just to add ... I'm quite prepared to pay for my 50% of the liabilities

Comms69

LatinDancer wrote: »

My ex husband and I jointly own 3 BTL properties which were purchased in 2007/8 (not great timing!) Currently they just about cover mortgage & expenses with rental incomes. - Including tax?

We divorced and settled in 2014 however I now discover that he has 'lost' the money he got in the settlement deal and has very little income, assets or savings. After the divorce I bought a house for myself and two daughters. - What about the 3 BTL properties?

I'm concerned about the possibility of the expenses in the BTL properties increasing with higher interest rates, and other costs, and that my ex will make no financial contributions. Would a possible solution be to change the ownership from joint owners to tenants in common? Would this mean that he is responsible for 50% of all liabilities? - That would require his consent, and probably should've been dealt with when you divorced. But additionally, you are presumably both named as landlords?

I envisage everything I've worked for being taken to cover the costs of negative equity whilst my ex husband declares bankruptcy and pays nothing. I'm sure that's his long term plan as he is very revengeful and bitter. - These properties are at the minute an anchor tied to your feet. Why are you keeping them?

How can I best mitigate me having to pay for his foolishness?

Thank you in advance 🙂

Im confused why this wasn't dealt with and what the courts said about these assets??

Comms69

LatinDancer wrote: »

Just to add ... I'm quite prepared to pay for my 50% of the liabilities

You don't have 50% liability, you both have 100% liability. Think that is the first key point you need to understand.

LatinDancer

Thank you for your reply 🙂

... Is there anything I could do to protect my home?

It seems so unfair ....
Could I be forced to sell to cover costs of the mortgages? That could render me & my daughters homeless .... meanwhile heis living with his mother, as an only child he will inherit her house when she dies ...would this be taken into account?

gettingtheresometime

Comms69 wrote: »

Im confused why this wasn't dealt with and what the courts said about these assets??

Have to admit that was my first thought as well.


Also, if the mortgages are joint then isn't the OP financially linked to the ex husband ?


Personally it sounds as the best way for the OP to protect herself from her ex financially is to sell the BTLs or buy him out

LatinDancer

Comma thanks I understand we each have 100% liability as joint owners, and now I understand tenants in common wouldn't change this.

We decided to keep the properties rather than sell when we divorced as we hoped the markets would improve ... As they have in some parts of UK but not in the North so much.

I'm in a mess then and there's no way out except hoping that does the honourable thing ... Which I doubt.

Comms69

LatinDancer wrote: »

Thank you for your reply 🙂

... Is there anything I could do to protect my home? - that depends. You're asking an impossible question.

It seems so unfair .... - not sure who told you life was fair, but don't tell your children that; it's a lie
Could I be forced to sell to cover costs of the mortgages? - unlikely, but possibly. That could render me & my daughters homeless - and? .... meanwhile heis living with his mother, as an only child he will inherit her house when she dies - maybe, you don't now that ...would this be taken into account?

Future inheritance? No, that is not taken into account.


You need to answer the questions, at the minute we're stabbing in the dark...

TrickyDicky101

Comms69 wrote: »

I'm concerned about the possibility of the expenses in the BTL properties increasing with higher interest rates, and other costs, and that my ex will make no financial contributions. Would a possible solution be to change the ownership from joint owners to tenants in common? Would this mean that he is responsible for 50% of all liabilities? - That would require his consent, and probably should've been dealt with when you divorced. But additionally, you are presumably both named as landlords?

A minor point but I don't believe the lender needs to provide consent for a joint tenancy to be severed (to result in tenants in common) - this could be effected solely by the OP as far as I understand it. Not that it changes anything, please note.

LatinDancer

Can't afford to buy him out ... And I wouldn't want to either. I hate being a landlord ... And I never wanted to become one in the first place.

Selling now would mean paying off at least 80k in negative equity. It would break me and I'd be homeless.