Bankruptcy and beneficial interest

queensland

hello, I’m in a bit of a mess, I owe £35,000 and am looking at options to get out of debt. I’m embarrassed to say that my husband does not know about the debt, and I don’t want him to. He owns the house, I’m not on the mortgage, and we have no shared debt or finances.

2 questions really, can I go bankrupt without my husband knowing? And what’s the deal with beneficial equity? Will this be something I’d need to pay? How would that work? I pay my share of the mortgage/bills but would not say that’s equity, I see it more like board/rent but I guess legally that’s not the case? I’m not sure.

I know I should tell him, but there are reasons why I’m choosing not to.

I’ve enquired about a DMP but the repayments are quite large, and i just want it all over with.

Thank you

RAS

I'm very confused as to why DMP payments would be quite large? Who have you talked to?

A DMP is a wholly informal arrangement. If you DIY, as many people do, you decide to how much to pay the creditors, based on what you can afford.

Whatever option you choose, you will struggle to make progress if your husband doesn't know about the debt. If he's used to you contributing an amount to household expenses and you can no longer do that, or you can't fund some special purchase, he's going to wonder what is going on.

There'll also be more mail to hide. It's much easier if he knows you've just got debt, rather wondering why you're behaviour has changed and making 2+2=47.

Keep_pedalling

The chances that your husband will find out is going to be very high and you really should come clean with him about your debt. Would I be correct in saying that the reason your home is in your husband’s name is because of the financial difficulty you were in 10 years ago and that he was aware of the situation back then?

You certainly have a beneficial interest in your home both because you are contributing to the mortgage and it is the marital home. That would certainly come into play in the event of a divorce, but I am not so sure about bankruptcy.

queensland

Thank You. My debt repayments at the moment are about £800 a month now, when I spoke to Step Change, they did a budget with me and said that my repayments would be £800 a month based on my expendable income, so basically no different. But that the debt would be paid off in 3 years. But with a DMP it would take much longer to be able to rebuild my credit that with Bankruptcy.

At the moment a big chunk of the debt is on interest free credit cards, but it’s just not going down as I don’t have enough each month. Partly because of the fact my husband doesn’t know so I have to act like I can afford things I can’t.

I’m not on the mortgage because I was in debt previously, got out of it, then built it up again when I had a child and worked part time. I just know he would flip, and probably be the end of the marriage.

Thanks for taking the time to respond

ManyWays

Do you agree you can afford 800 a month? Or were the expenses you told Stepchange too low, you need a comfortable budget that allows for putting money aside for xmas, car costs, things needed round the house, entertainment, clothes etc

And what’s the deal with beneficial equity? Will this be something I’d need to pay?
If the OR decides you have beneficial equity, then that amount has to be paid. As you presumable don't have thousands sitting in a bank account to do this, it would usually mean your husband getting a remortgage to cover your equity. If the money can't be raised, the house has to be sold after three years.

If you want to say more about the house, it's possible to give some guidelines about beneficial equity. When did your husband buy the house, before you two met? Has any money from you gone into the deposit or paid for renovations to the house? How long have you been living together and how much do you pay a month to joint bills?

But unless he has owned the house from before he met you and earns a lot more than you, bankruptcy may be a very bad option for you.

Why not move over to the Debt Free Wannabee board https://forums.moneysavingexpert.com/categories/debt-free-wannabe

And post a Statement of Affairs there https://www.stoozing.com/soa.php

then we can look at your other options?

fatbelly

If Stepchange have determined that you have £800 per month spare and can repay your debtsvin 3 years then bankruptcy has no real advantage, because you wold get an IPA/IPO to pay that much over 3 years.

Bankruptcy may have disadvantages but forgive me if I don't launch into a lecture on beneficial interest or the tell-tale signs of bankruptcy at this point.

II agree with posting a soa on the dfw board. I suspect there are better options for you.

MEM62

can I go bankrupt without my husband knowing? 

Unlikely. He is very likely to find out one way or another.

I pay my share of the mortgage/bills but would not say that’s equity

The likely position of the Official Receiver is that gives you a beneficial interest in the house. Think about it - you have paid towards it's purchase.

I know I should tell him, but there are reasons why I’m choosing not to.

Ask yourself, it is better coming from you or your husband finding out from another source?

I’ve enquired about a DMP but the repayments are quite large, and i just want it all over with.

You pay what you can afford. Nobody dictates to you what payments you make.

Bankruptcy is the nuclear option. I cannot say whether it is right for you or not but is the most drastic solution. In a DMP you have more control.