Negative equity and co ownership

Jonzer

Hi looking bit of advice, bought house 50/50 NI co-ownership in 2009. House cost £130000 so mortgage was 65000. Fast forward to now - divorcing with partner, I’ve moved out and can’t move back to property due to security issues surrounding my job, partner requires a bigger house as 3 kids and not enough bedrooms (1 disabled child). Mortgage is down to about 62000 and we need to sell. Houses going for about £75000 in area. Will co ownership let us sell and set up a payment plan? I’m assuming from previous posts that the mortgage company will get full payment and the we will be left to sort out the 50% with Co ownership. I am considering bankruptcy but partner is hoping not. If co ownership accept will the debt be spilt in two for each party to try and pay?

boo_star

If you declare bankruptcy it will all fall on her.

[Deleted User]

Jonzer wrote: »

Hi looking bit of advice, bought house 50/50 NI co-ownership in 2009. House cost £130000 so mortgage was 65000. Fast forward to now - divorcing with partner, I’ve moved out and can’t move back to property due to security issues surrounding my job, partner requires a bigger house as 3 kids and not enough bedrooms (1 disabled child). Mortgage is down to about 62000 and we need to sell. Houses going for about £75000 in area. Will co ownership let us sell and set up a payment plan? I’m assuming from previous posts that the mortgage company will get full payment and the we will be left to sort out the 50% with Co ownership. I am considering bankruptcy but partner is hoping not. If co ownership accept will the debt be spilt in two for each party to try and pay?

If the mortgage is down to £62k and similar houses in the area generally go for £75k then you're not in negative equity. Yes you'll receive less than you originally paid for the house but there's still equity in the property.

Caz3121

Lover_of_Lycra wrote: »

If the mortgage is down to £62k and similar houses in the area generally go for £75k then you're not in negative equity. Yes you'll receive less than you originally paid for the house but there's still equity in the property.

Unless OP means that the full value of the property (not their share) has dropped from £130k to £75k

[Deleted User]

Caz3121 wrote: »

Unless OP means that the full value of the property (not their share) has dropped from £130k to £75k

I see what you mean, hopefully the OP can clarify.

I found an old thread with posters who are also trapped in negative equity with NICO. It might be relevant to the OP.

https://forums.moneysavingexpert.com/discussion/2507327/northern-ireland-co-ownership-negative-equity

Jonzer

Yes to clarify the full value is £75K. Northern Ireland never seemed to recover.

Jonzer

Co ownership say that the mortgage company will be paid in full first. Then the shortfall will be with them. Just worried about a payment plan. I reckon approx 15k from us each.

[Deleted User]

Is bankruptcy a given? Would something less drastic such as a debt management plan be an option for you?

You'll need to find out from NICO if they will allow you to split the shortfall between you rather than have each of you jointly own the whole shortfall. I have a horrible feeling it will be the latter and that you will each have joint and several liability for the shortfall so if you can't pay it then they will come after your ex for the full shortfall instead.

How are you ex's finances, other than this property in negative equity does she owe a lot of money elsewhere?

Would NICO allow you to let the property out which would allow you ex to rent somewhere larger and more suitable for her and the children? Letting the property might just be kicking the can down the road though if you don't have a longer term plan to make up the shortfall.

Would you be able to move back in if your ex was living somewhere else? I'm not sure if that would help with the security issues that prevent you from living there just now.

Jonzer

Thanks for reply’s, the answer is no tbh, I couldn’t afford the repayments on my own and I have child support to pay. I’m already on the edge and living on an overdraft that keeps charging me. I think letting the property out would work if house prices did increase in NI but I don’t see it.

Jonzer

I did look into a negative equity company but they were looking a few thousand pounds to write letters to NICO to get our debt written off. This is all pending the house actually selling as well.

[Deleted User]

Jonzer wrote: »

Thanks for reply’s, the answer is no tbh, I couldn’t afford the repayments on my own and I have child support to pay. I’m already on the edge and living on an overdraft that keeps charging me. I think letting the property out would work if house prices did increase in NI but I don’t see it.

Bankruptcy is quite a drastic step. I think it would be worth putting together a statement of affairs and visiting the Debt Free Wannabe board or contacting one of the debt charities such as Step Change if you haven't done so already.

https://www.lemonfool.co.uk/financecalculators/soa.php

https://www.stepchange.org/how-we-help/debt-advice.aspx