Marriage breakdown-what to do with jointly owned house?!

lea

Hi

I'm in a tricky situation and wanted some advice.
Me and my husband bought our 3 bed house in January 2006. It cost £182,500 and his family member put down a large deposit, so we only had to get a mortgage for £105,000 which was over 25 years. However, I signed a legal document stating if the house is to be sold, the trust fund from which this deposit comes from has to be repaid the £80,000 (basically to stop me running away with their family's money!).

Anyhow, since then my husband has been suffering from depression and was unable to work for about a year. As a result, we now have a total of approx £25,000 personal debt on credit cards (which by the way are in my name because I had credit cards and he didnt). We started the process of additional borrowing from our mortgage lender about 3 months ago to put it on the mortgage, but then husband lost his job so we had to put it on hold.

Me and my husband have now split up

The options we can see are as follows:

1) Sell the house. We have had valuations from £190,000 to £200,000. After repaying the trust fund and our mortgage and fees, we are likely to be left with nothing. That means the £25,000 debt still stands and is in all my name

2) Carry on with the remortgage but on a buy to let and rent house out, and the debt will then be on our mortgage thus in both our names. However, to borrow £127,000 over 30 years on buy to let, we have been quoted approx £830 p/month. Rental value will only be approx £750 p/month so there will be a shortfall.

Can anyone offer any advice?? I feel I am in such a mess and with no light at the end of the tunnel

Thanks
Lea

Marker_2

You are married so half the 25,000 belongs to him, half the 80,000 belongs to him, so you are only responsible for 52 1/2 of the debt!

geoffky

First you need to get professional debt advice ie national debt helpline..These are the people you should be asking...

AMILLIONDOLLARS

You need a very good solicitor as it looks like you'll be taken to the cleaners!! Contact the Law Society's information dept and they will be able to give you a list of family solicitors in your area. In most cases an hour/ half hour consultation is free.

Good luck
AMD

lea

Thanks, will get some legal advice asap.

Is the general consensus that I'm stuffed?! I am feeling a bit done over, as husband was the one who left and helped me get into this financial mess

Agghhh, any other suggestions??

Thanks
Lea

Badger_Lady

I'm afraid it does look like that on the surface

I totally feel for you, having myself been financially screwed over by a partner who suffered from depression, but in my (completely amateur, non-legal) mind, it looks as though he gets to keep £80,000 of the equity while you repay £12,500 of the debt

All I can offer is virtual hugs and the best of luck when talking to your solicitor!

lea

I think the money has to go back to the Trust fund rather than him, so thats not so bad.

Have no idea how I'm going to afford to rent anywhere with that kind of debt....

Lea

zippygeorgeandben

I am thinking of purchasing a property with my partner but will be wanting a 'tenants in unison' agreement to be drawn up. As I'm the main breadwinner, it would mean that if we split up and had to sell the house, I would get a bigger chunk of the house price.
Does that make sense to people?

Sorry to hear about your situation Lea. Hugs coming your way also..

xx

silvercar

What happens to the 80,000 trust repayment if you aren't left with over 185,000 from the sale - after allowing for estate agents and legal costs of selling?

PasturesNew

I'd say the "fair and right" thing would be to sell the house, £80k goes back to the trust fund - if the house were now worth £380k you'd be pleased to only pay back £80k and not a proportion.

If we assume you each walk with £1 in your pocket from the sale of the house, then split the debt on the cards. The problem is how you get him to take on half the card debt as it's in your name. He'd have to borrow the money somehow, which might be a problem.

Buy to Let is a no-go. The figures don't stack up for starters. And with house prices falling it's most likely that every day you own the house you will get less and less for it.

lea

Thanks everyone

In an ideal world I would like to be able to sell the house, pay back mortgage, fees and trust fund, be able to clear the debt and just break even.

However, like said above, we may not even get enough to clear the mortgage, fees and repay the Trust Fund. Let alone the debt

Another complication is that the person who set up the Trust Fund sadly died last week. This means that my mother in law will now be 'Trustee' of this Fund. She is sympathetic to my situation as is aware that my husband has instigated the split. She doesnt however know about the debt.

I would much rather she didnt have to be told about the debt-its not her responsibility after all-however, neither me or my husband will be able to find alternative accommodation where we live on our wages with our debt. She will wonder why we can't afford to rent (and it may be that husband has to live with her!).

I am not sure what will happen if the equity isnt enough to repay the £80k, will have to re-read the document but I believe it says that the Trust is to be repaid AFTER the mortgage and fees etc. Presumably if house prices etc have gone down, we will just have to pay whatever we can from the equity??

Thanks again

Lea