impossible divorce settlement

desperatesituation

Hi


I'm posting here in desperation because I'm at my wits' end. I'm sorry if this isn't the right forum.


Basically I've been going through a long process of divorce hearing and child contact proceedings and spent a fortune on legal fees that has gone onto credit cards and loans. I owe close to £60k on unsecured debt.



I'm self employed and had several months without work this year. That also contributed to the debt. I spend so much servicing the debt that I only just scrape by, even though when I'm working I have a decent income.


I have a house that was the former matrimonial home, which I've been trying to sell since April. I previously had tenants in it but it's been empty since then as nobody wants to move into a house that's on the market. In the meantime I have to pay mortgage of £680 a month and full council tax. I don't live in the house as I live with my partner at the other end of the country and she has a business there. So I also have the normal outgoings at home.


I ran out of money during the court process and ended up having to represent myself. I made my financial situation clear at the final hearing in July. I have only just had the financial order now!!!


I have been ordered to either pay £50k to my ex (!) or put the house immediately on the market, maintain it in a good state, pay all bills then pay her £50K out of the proceeds, or if there isn't enough, pay her what there is and the rest in quarterly payments starting three months after the sale.


The judge knew I'd been trying to sell it since April. He knew I was struggling. He knew there is virtually no equity in the house, even if it sold tomorrow! He knew there is no way I can pay £50k and had full sight of my debts. But he ignored it all.


I am planning to file for bankruptcy as I can't go on like this, but my understanding is that the ordered settlement isn't included in bankruptcy. I could try to appeal the order, but it's apparently very unlikely to succeed, I can't afford to even pay a lawyer for advice, and I can't afford the court fee (£568 or £1200, depending who you ask!) I even still owe my lawyer nearly £1000.


The Order says if I don't comply I could be jailed. Technically, if I go bankrupt, I instantly fail to comply in not paying the house bills. Either way, I will never ever be able to pay the £50k and never could.


What do I do? I'm seriously distressed by this, beginning to wonder what the point of living is now. Please, can anyone help?

Hectors_House

Didn’t want to read and run.

I would have thought it could be argued that the court has forced you into bankruptcy anyway.

I’m no expert but I can’t see you being sent to prison under these circumstances and if you do go bankrupt you must be able to access free legal advise going forward.

I do feel for you. Please remember there is a light at the end of the tunnel and you will come through this.

[Deleted User]

There are fee waivers for court fees if you are on a low income.

euronorris

_shel wrote: »

There are fee waivers for court fees if you are on a low income.

He's not on a low income though. He says he earns quite well, it's just that a large proportion of his income is going on servicing his debts.

tacpot12

You haven't told us enough about your ex-wife's situation to know whether the judge has ignored your situation or not. What debts and assets does she have and what assets do you have? Including your pensions?

Why not sell the house at auction? You can then give your ex the proceeds and you can pay down the remaining balance every month. At least there is no interest on that debt. You can use the mortgage payment to pay her at least £680 per month, you will also save on insurance and maintenance so it shouldn't take too long. Bankruptcy is a last step and you seem to be some way from this.

paddyz

Hope the house sells ASAP at least that way you will not be having to spend so much money paying the mortgage and Council tax, anyway this shouldn’t you your sole responsibility if you own jointly

Gavin83

tacpot12 wrote: »

Why not sell the house at auction? You can then give your ex the proceeds and you can pay down the remaining balance every month. At least there is no interest on that debt. You can use the mortgage payment to pay her at least £680 per month, you will also save on insurance and maintenance so it shouldn't take too long. Bankruptcy is a last step and you seem to be some way from this.

There's a problem with that plan. He said there's very little equity in the house and it's unlikely he'll achieve a good price at auction. It's very likely they'll still be an outstanding mortgage, even without taking into account the money he'll be paying his ex. So not only will he still be in significant debt, with a mortgage he'll also have no assets to speak of either.

OP, it seems very unusual for a judge to order you to pay £50k to your ex when you are on the verge of bankruptcy. Are there other circumstances you haven't mentioned in this thread?

To be honest if I was in your position I'd be going down the bankruptcy path too. It's true it'll screw your finances for a period of time but I'd imagine it'll be a smaller period than attempting to pay off these debts. I'm gathering you're in over £100k of debt now, you could be paying off these debts for decades.

desperatesituation

Thanks everyone for your responses and help.
To answer a few points and to clarify a few things:


Income - yes, I have a pretty good income but the lack of work, crippling legal costs and other factors such as a recent non-paying customer have caused me to enter a cycle of continually servicing debt. Add to that the lack of rental income and I am always on the cusp of failing to make payments.


The house is in my name alone, but was the former marital home. My ex paid the deposit and I paid the mortgage and the judge agreed with her that she was effectively 'owed' the deposit back. So effectively, that makes me responsible for the vagaries of the housing market and any drop in value since then, which seems to me manifestly unfair.


My ex had a decent paying job, was made redundant then didn't elect to work for years. She recently started doing a much lower-paying job. She has three pensions, one of which is already in payment and one which will start paying within five years. I have no pension provision and no assets apart from the house.


Her position was mostly based upon the suspicion that I was not being truthful about my assets, and I was hiding something. Since the burden of proof in the family court is 'in all likelihood' rather than 'beyond all reasonable doubt', I can only assume the judge thinks the same thing, hence an Order which I can't physically pay.


I have considered the option of selling at auction but this will only remove the immediate outgoings problem. I still have zero possibility - even if I was in full-time work for an entire year - of paying anywhere near the £50K I have been ordered to pay. And there is so little equity in the house, even at the current advertised price (which it's not selling at anyway!) that in all likelihood I would walk away with nothing from the auction apart from the savings on the mortgage, which is nowhere near the £50K.


The essential problem here is the £50K. It's absolutely not achievable and isn't realisable in either assets or cash, but the judge clearly thinks it is. I also have no means to pay for professional advice, and my instinct is to file for bankruptcy to get rid of the current issue of servicing loans and also get rid of the overhead of the house (which is a massive worry for me), but my concern is that immediately makes me in violation of the Order, and what I have to do then. In a way, bankruptcy would not only be the least of my worries, it would be a relief.



I do very much appreciate everyone's input on this, thank you.

BrassicWoman

Auction the house
Go bankrupt
Pay her back at a court agreed £1 a month

Nub

Why is there no equity in the house when she put in a £50k deposit?


It does seem a little harsh that you alone should suffer the burden of stamp duty/conveyancing/house price depreciation, but you can take solace knowing that presumably she's also in 60k debt from her own legal fees and if you both go bankrupt she lost her 50k.

mark5

Nub wrote: »

Why is there no equity in the house when she put in a £50k deposit?


It does seem a little harsh that you alone should suffer the burden of stamp duty/conveyancing/house price depreciation, but you can take solace knowing that presumably she's also in 60k debt from her own legal fees and if you both go bankrupt she lost her 50k.

They could have bought a new build in 2006/2007 or bought a house that now needs work and has fallen in value, or maybe other debts might have been secured against the property.

Unless your in a divorce situation where the other party is bitter it’s difficult to understand how expensive it can be, I had to spend thousands to get to the financial settlement and my ex was telling the judge I was hiding a large share portfolio, how do you prove you don’t have something, you cant!