Very large debt help

Hariba

Yes that’s correct. They now say I made a misrepresentation when I took the policy out. I didn’t and have gone to great lengths to prove this but the evidence I have doesn’t prove enough for them and the ombudsman have agreed with them. So they now want reimbursement. The reimbursement isn’t just for a payment they made, it’s for extortionate costs of services that they used to get things sorted at the house plus things like loss adjuster fees and alternative accommodation as we had to move out. 

fatbelly

Hariba said:

Hi, I’m hoping someone can give a little help. I’ve recently been told I have to pay a very large debt of approx 100k. It’s classed as a non priority debt. I don’t work but my partner does. The debt is in my name only as is the house and mortgage. I’m currently looking at the best options for paying this and very concerned about losing the family home. I’ve done the budget calculations which say I could afford to pay £100 a month based on my partners salary (although she’s not happy to pay it). And I intend to try and negotiate a payment plan with the creditor but I think it’s unlikely they’ll accept £100 a month on such a huge debt as it would never get paid off. Am I able to transfer the house to my partner or even add her on to the mortgage/deeds, to avoid losing the house? I’m worried as someone mentioned a charging order to me or even a creditor forcing me to become bankrupt which I don’t want as we would lose our home. This is my only debt and I’ve never been in debt before so all this is new to me and I’m very unsure what to do. Thanks 

Your post seems to have attracted an unusual number of replies...

I think you do need external support with this: CAB/stepchange may not be good enough, but that's a start. I would be tempted to see if you can get a free half hour with a local solicitor first.

If you can afford £100 per month, and can evidence that, then I would offer that if you've established that their figures are correct

I suspect a court claim may be in the offing and that is where professional (solicitor) help may lessen the damage.

Transferring ownership of the house (to joint) is a big step but if it's something you were considering anyway, now is the time. Of course you will need professional advice on that!

Just so you're clear on the process for enforcing a debt, it goes

1. Pre-action letter and standard form, 30-day reply limit (post if you get one)
2. Court claim form
3. Court hearing (if you defend it)
4. Court judgement (if you don't, or you lose, or only succeed partially)
5. charging order 
6. order for sale application

Now 6 is exceedingly rare and unlikely to succeed where it is your only home and others live there. Most judges would see that as disproportionate for what was  a non-priority debt and is by that time secured.

In the unlikely event of a statutory demand you would offer a voluntary charge and again most judges would be OK with that.

But that's all a long way down the road. First step is to check you have to wriggle room to reduce the debt, then make an offer of what you can afford

Hariba

sourcrates said:

First thing you need to do is get your name off the house deeds, once you've done that, you have no assets, or income, and no way to pay the debt, the creditor cannot do anything about it, its dead in the water basically.

Sure they may take you to court, once you say you have no income, case will be dropped.

If you don`t take these actions, then a CCJ and charging order are likely, and you will find yourself in front of a judge trying to persuade them why they should not grant an order for sale to the creditor.

You can avoid all this by signing the house over to your partner.

Is it legal to do this? I asked the debt advise service about bankruptcy and was told not to sign anything over. To be fair, it should be her house as she has paid the mortgage. 

fatbelly

Not commenting on other's posts, but answering your question.

The Official Receiver has the power to reverse transactions if it considers they were done with the purpose of hiding assets from your creditors

Hariba

I’m quite happy to transfer the mortgage to joint names and we have been considering that for some time anyway. I’d also happily take myself off the mortgage but to do this I’m guessing I’d have to ‘sell’ the house to my partner. I’m just not sure whether that’s a legal thing to do in this situation.

Hariba

fatbelly said:

Not commenting on other's posts, but answering your question.

The Official Receiver has the power to reverse transactions if it considers they were done with the purpose of hiding assets from your creditors

Thank you. Yes that’s what I thought so not sure if there’s any point in adding her to the mortgage/deeds.

sourcrates

Hariba said:

I’m quite happy to transfer the mortgage to joint names and we have been considering that for some time anyway. I’d also happily take myself off the mortgage but to do this I’m guessing I’d have to ‘sell’ the house to my partner. I’m just not sure whether that’s a legal thing to do in this situation.

Its an unsecured debt not currently subject to any legal action, you can do as you wish with your own house, if you put it in joint names then only a restriction can be registered, which is basically nothing.

At the moment, legalities do not come into the equation, its also unlikely they would petition for your bankruptcy, they would have no guarantee of getting anything near the 100k owed.

Companies will usually base their actions on what can be retrieved from a situation, they are not like HMRC who will happily bankrupt you for no gain, private companies have to be careful with shareholders money, and how its spent, they would need to be pretty certain of a return if a SD or bankruptcy were mentioned.

Billy_B_North

Hariba said:

sourcrates said:

First thing you need to do is get your name off the house deeds, once you've done that, you have no assets, or income, and no way to pay the debt, the creditor cannot do anything about it, its dead in the water basically.

Sure they may take you to court, once you say you have no income, case will be dropped.

If you don`t take these actions, then a CCJ and charging order are likely, and you will find yourself in front of a judge trying to persuade them why they should not grant an order for sale to the creditor.

You can avoid all this by signing the house over to your partner.

Is it legal to do this? I asked the debt advise service about bankruptcy and was told not to sign anything over. To be fair, it should be her house as she has paid the mortgage. 

No, and you could find yourself on the wrong end of a criminal prosecution if you do it

Billy_B_North

fatbelly said:

Not commenting on other's posts, but answering your question.

The Official Receiver has the power to reverse transactions if it considers they were done with the purpose of hiding assets from your creditors

I really don’t understand why people suggest such ridiculous moves as trying to pretend that they have no interest in a house. It’s not going to help, gives false hope, and carries the risk if a prosecution for fraud.

sourcrates

Billy_B_North said:

Hariba said:

sourcrates said:

First thing you need to do is get your name off the house deeds, once you've done that, you have no assets, or income, and no way to pay the debt, the creditor cannot do anything about it, its dead in the water basically.

Sure they may take you to court, once you say you have no income, case will be dropped.

If you don`t take these actions, then a CCJ and charging order are likely, and you will find yourself in front of a judge trying to persuade them why they should not grant an order for sale to the creditor.

You can avoid all this by signing the house over to your partner.

Is it legal to do this? I asked the debt advise service about bankruptcy and was told not to sign anything over. To be fair, it should be her house as she has paid the mortgage. 

No, and you could find yourself on the wrong end of a criminal prosecution if you do it

If the house was signed over to another party, and the creditor chose to make the OP bankrupt, the worst that could happen would be a bankruptcy restriction order (BRO) may be imposed on the OP, this is not a criminal offence, nor would they be subject to criminal charges.