Very large debt help

JCS1

mem1209 said:

I am no expert in any of the points discussed above, but one thing bothers me: there is a family with children who lives in this house, where the spouse pays for the mortgage, but the mortgage is on the farther's name.
Is this common in the UK/ England, that the Court will allow to enforce bankruptcy on the father and ask to move the whole family on the street or shelter? Even if the spouse and children are not on the deeds / mortgage etc - they do exist! Does it common practice in England to force sell a house full of kids?

With it being the family home, and assuming the beneficial interest position is resolved, the Official Receiver has 3 years to deal with the property - and would do nothing for the first year.

Hariba

I’m considering now putting partner in the mortgage and having a deed of trust drawn up so we are tenants in common and will hold unequal shares in the house. I can then set my share to 5 or 10%. 

Is this legal rather than transferring the house completely? Can anyone see any issues with doing it this way?

MattMattMattUK

I agree with Gizmo above, the lack of insurance will be a breach of your mortgage agreement, potentially adding even more issues to your situation. You said the insurance was expensive, is that because you have a pending case, have had a high value claim, have had a CIFAS marker? If your previous insurer is seeking to recover funds is there a suspicion of or have they proved a case of insurance fraud which is increasing your premiums? Your mortgage provider will usually offer insurance, it is never the cheapest for normal situations, but you might well find it can be added much easier than obtaining a policy with a separate organisation.

I think the next thing to do after that is to establish the exact amount they are seeking and where they are in the legal process as well as what they are going to do next. They may obtain a CCJ, at that level I imagine once they obtain the CCJ they would immediately have the collection moved to the High Court and involve HCEOs as well as attempting to force an asset sale of your property as you have the equity in that. The key will be that you avoid as much of that is possible, possibly being able to stop it at the CCJ level by agreeing repayment and cooperating with them, a re-mortgage to release equity for a lump sum would also be helpful. But keep in mind your negotiating position is weak, so play your cards carefully, but bluffing will not work.

MattMattMattUK

Hariba said:

I’m considering now putting partner in the mortgage and having a deed of trust drawn up so we are tenants in common and will hold unequal shares in the house. I can then set my share to 5 or 10%. 

Is this legal rather than transferring the house completely? Can anyone see any issues with doing it this way?

You can put those measures in place, a court can undo them. If the court deems that you took actions to hide assets from or attempt to move them out of reach of your creditors then they have the power to reverse transactions or annul/invalidate any agreements you have put in place. Whilst your partner should be on the mortgage and deeds as they are paying the mortgage, you can not legally hide assets from your debtors.

Hariba

The insurance is expensive because if the high value claim. There’s no CIFAS marker as far as I know. They say I misrepresented info and wouldn’t have offered insurance. I know the exact amount already but there’s no legal process been started. They have asked me how I intend to reimburse. I don’t know what they intend to do next. The letter just says that further action may be considered. 

MattMattMattUK

Hariba said:

The insurance is expensive because if the high value claim. There’s no CIFAS marker as far as I know. They say I misrepresented info and wouldn’t have offered insurance. I know the exact amount already but there’s no legal process been started. They have asked me how I intend to reimburse. I don’t know what they intend to do next. The letter just says that further action may be considered. 

On that basis get insurance ASAP, regardless of cost, you are in breach of your mortgage agreement by not insuring the property and you do not want to add more issues on top of those you already have. 

What they intend to do next will likely depend on your response, the first key point is to not ignore them, that will only encourage them to go legal and that will mean costs escalate significantly and quickly. I would first make contact with them and ask for a period to take stock of your available options and on what basis you might be able to replay, they will likely give you a month unless you have already been ignoring them for a while, that will take the immediate pressure off and allow you time to work out the best course of action. 

The next thing I would do is look at getting a job and how that could work with childcare, extra income will likely be very important in getting this resolved. You should also speak to a mortgage broker about your options in terms of a mortgage and releasing equity from the property, if you need a reason at this stage just say home improvements/ an extension, not debt repayment. You could use this as a quick and simple way to get your partner on the mortgage and deeds. 

I would also be requesting copies of my three credit files and a SAR to National Hunter to check for any CIFAS markers as if you are going to end up with a Cat. 8 marker you will want to be aware before it's effects start to be felt. 

Finally, at this stage, to not start doing things which have a material impact do things, do not agree any payments, do not make any commitments or legal changes until you have all the facts and then proper advice (probably from CAB) once you have the full picture. As you have the equity in the property they are not going to just go away, but they will likely only take the court and enforcement route if you refuse to cooperate so you might find being able to offer them £60-70k following a mortgage will be a figure they will settle on. They may also have a policy for fraud which means they pursue payment in full, in which case you should also be prepared for that. 

Hariba

Thanks for taking the time to write the detailed reply. There is a lot to think about there. I don’t know anything about CIFAS markers. I’ve already checked two of the credit file agencies and there’s none on there. Would they be on there already? Or not unless I’d already not agreed to pay? 

Shineyhappy

A bit of a long shot, but have you considered writing to any of the financial columnists in the newspapers, sometimes they seem to manage to get to the bottom of the issue and get companies to see sense.

Hariba

Hi all, just an update.
 I’ve received a pre action protocol letter of claim telling me I have 28 days to respond. It’s from a solicitor on behalf of the insurance company. 

Meanwhile I have added my partner to the mortgage and we have unequal shares.

However, I’m unsure what to do about the letter or how to respond. I cannot afford legal costs to help with this. The letter says that their preferred next step is ADR (alternative dispute resolution) in order to keep costs down. It also says I need to make an early admission of my legal liability and commit to take part in ADR otherwise continued evidence gathering will continue and this will lead to further costs.

Regarding costs - any settlement agreed will be subject to Part 8 proceedings and/or detailed assessment of proceedings unless agreed at the time.

The letter also says that if I intend to dispute any of it, I am required to disclose any documents or evidence in support of my denial.
It’s all jargon to me. I’m aware that I need to respond in the time frame or else further action will be taken but I don’t really understand it all. 

Any advice would be very welcome. 

fatbelly

It should be 30 days

https://debtcamel.co.uk/letter-before-claim-ccj/

That's a very bullying letter that they've sent. You might want to run this past National Debtline, who don't charge.