Recently severed joint mortgage and ex partner facing bankruptcy

brazil_mulberry

10 years ago my ex partner walked out leaving me a single parent and has only recently signed the deeds of the property and been removed from the joint mortgage of the property we shared. If my ex goes bankrupt is there any way I can limit my liability? She has signed the property over as she was trying to arrange an iva again and is in a financial mess.
My ex left while we were 4 yrs into a joint iva leaving me to complete the iva.  Since leaving she didn't pay anything toward completing the iva, has not paid a penny towards the mortgage or upkeep of the property and for the last 5 years has not paid any maintenance towards the upkeep of our son.
Since she left I have been careful to not get into debt and have overpaid the mortgage trying to complete it asap in the last several years. There was no equity in the house when she left, it was valued at the outstanding value on the mortgage, I tried to get her to sign over the house and although agreeing she would, solicitors letters were ignored, mediation also ignored.
According to recent solicitor advice if she does go bankrupt I have to pay her creditors half the equity in the house when it was signed over and their advice is to wait for the letter and pay what the creditors ask for. 
She owes me money if anything not that I would ask her for any. Surely if she walked away from an iva she should not have been able to get into such debt again which I believe is around £40000? The fact that she has not paid anything, ignored the need to transfer the property over at the time of leaving, that I overpaid into the mtg, I should  not be liable to half the equity built up 10 yrs down the line?

ToxtethO'Grady

I would be very careful as your ex signing over the deeds and mortgage just before she goes BR could look like she was trying to hide an asset. I would get some legal advice about where you stand.

It would be an insolvency practitioner who would manage an asset like a house, or the interest in it, and you would need to have a legal argument why she had no equity or interest in the property when she signed it over.

With BR you would be expected to prove, legally, that she has no beneficial interest in the property now, if you paid her to take her name off then the interest passes to you however if it could be argued it wasn't the market value the IP could seek to recover the difference. I'd start looking for legal advice now to head off any enquiries about it. Some solicitors will give pro-bono advice for 20-30 minutes or there's the Law Centres Network.

Fighter1986

Were you married?

Either way, taking her name off the deeds to the house in your circumstances shouldn't be interpreted as hiding an asset as according to her financial behaviour in the past (e.g. at the point she stopped contributing towards the upkeep of the property, mortgage payments, etc, there was no equity), she has not had an interest in the property for some time now.

You have paid all of the mortgage and paid for all of the upkeep in the property since the date on which it was valued to have no equity, and as such it can be argued that all of the equity in the property is rightly yours.

I think you have a very strong case.

Although I'm just using rationalé, I'm not a solicitor. 

brazil_mulberry

Hi fighter1986, no we were not married

brazil_mulberry

Hi toxtetho'grady, am in touch with a local law centre, will advise what they say when I have managed to speak to someone, awaiting a call back. Tks.

Fighter1986

Hope you caught my edited post. 

Fighter1986 said:

taking her name off the deeds to the house in your circumstances shouldn't be interpreted as hiding an asset as according to her financial behaviour in the past (e.g. at the point she stopped contributing towards the upkeep of the property, mortgage payments, etc, there was no equity), she has not had an interest in the property for some time now.

You have paid all of the mortgage and paid for all of the upkeep in the property since the date on which it was valued to have no equity, and as such it can be argued that all of the equity in the property is rightly yours.

I think you have a very strong case.

brazil_mulberry

Hello fighter1986, re edited post....that was my thinking too, it would be a strong case but with initial contact with a solicitor ending with the advice "sit back, wait for the bill and pay what they ask" that might not be the case. Here's hoping the law centre give me better news. If I end up paying, the creditors will be happy but nothing has been corrected, it is so wrong that in this case I should be on the line for paying them the money they lent to and was spent by someone else

debt_doctor

Hi,
Do I think that in the case of her bankruptcy, the OR /IP will pursue her interest in the property - Yes i do. 
Your argument of course has already been highlighted to you - demonstrate the equity when she left, demonstrate no financial contribution since and claim she has little or no interest in the property. To establish beneficial interest is a complex process involving solicitors and there will be valid arguments on both sides.
DD

debt_doctor

Also, you speak about "the joint mortgage being severed" - Has the recent process removed your ex only from the mortgage or has the legal title changed - ie you were 'joint tenants' (joint owners) and that you are now the sole person with title to the property? That would give you a better argument as in bankruptcy the first assumption is that beneficial interest follows the legal title - but this has only recently changed so could be viewed as a transaction at undervalue. You would have to show how long this process was ongoing and why - but the big downside is that she may have been insolvent at the time.

TripleH

I assume the mortgage is now just in your name? 
When was it moved to just your name and have you changed provider from when it was in both your names? (Account statement, renewal letter etc). If you can start now building up a file of documents like this to show she has no involvement for x years (might also be worth getting replacement statements if you can't find them) which together help paint the picture that it has all been you.
Chevk your credit files to make sure you don't still have any financial association 

brazil_mulberry

Mortgage and deeds are just in my name as of October, the new mtg is with the same provider but a new agreement rather than just partner removed from the existing joint mtg. The law centre can't do anything for me and have suggested checking the law society for solicitors and financial advisors. Checking the law society website, the solicitor that gave me the sit back, wait and pay advice and no impression I had any leg to stand on comes up with the most accreditations in the area but will start looking further afield. Not sure about financial advisors but will take a look and see could that lead anywhere