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

lindens

PasturesNew wrote: »

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.

.

I was going to ask about that
When OH and I bought our house, 25% deposit came from my trust fund. There was then a second charge put on the property that if we sold the house 25% had to go back in the trust fund. Luckily we sold in 2005 and made quite some equity (unluckily we were divorcing). We sold the house, mortgage got paid off, and then what was supposed to happen was this - say there was then £60K left, 25% of purchase price went back to the trust, whatever was left got split 50/50 between us. We each had high debts in our own names which by pure chance came to about the same amout each. But the amount left over at the end was not enough for each of us to pay off our debts.
I then took a decision, because throughout the marriage my Oh had rubbed my nose in this trust fund, i decided that I would split the £60K between us, and THEN my trust fund money would just come out of my £30K ( luckily it was just enough), leaving my OH £30K - enough to pay off his debts.
It wasn't nearly enough to pay off mine as you can see below I am still paying them off, but I was so emotionally scarred by the whole experience that money and "stuff" took a back seat, my priorities in life changed.
Like this
house sold 100K
mortgage - 40K = 60K
split 60/2 = 30K each
trust fund 25% of 100K = 25K
Oh has 30K
I have 30K-25K=5K

Thats a bit rambling and complicated sorry, what I am warning you is

1. Make sure its the original £80K thats to be paid off and not a percentage
2. Make sure there's no charge on the house

If neither then you are very lucky in a way and that relative was very trusting! he has made no profit on his £80K investment

AMILLIONDOLLARS

I'd tell the mother-in-law, as ultimately its her Son and his Trust Fund when all is said and done he is responsible for half the £25k, why not get her to settle his debt out of the fund and the rest can go back in. Why should he not suffer the consequence of his actions. Besides in a couple of years time the interest generated from the trust fund will wipe out the £12,500 not paid in and your ex will have a nice tidy sum for the future.

Tell the mother-in-law and get it sorted!!

AMD

cwp500

Is there a way as part of the final divorce settlement agreement that the outstanding debt could be covered? For example you each get 50% of the final sale price but, in turn, £12500 is taken from each of your shares to clear the debt?

Get a lawyer. It will cost you in the short term but reward you eventually as at present you cant think clearly with being so close to the problem.

gauly

What would have happened if you had managed to get the larger mortgage you had wanted? There would then have not been enough equity left in the house to repay the trust fund? That would have been great for you - you could then both owe the trust fund half the debt which would be fairer (and I imagine it would be better owing the money to the trust fund rather than a bank.)

Ideally you want to get back into this situation where the trust fund is the last debt to be paid and you both owe it money equally. Is there any way of securing your debts against the house - maybe you can request that the credit cards secure the debts against the house and thus jump the queue ahead of the trust fund? Or get a secured loan of some kind?

lindens

gauly wrote: »

Ideally you want to get back into this situation where the trust fund is the last debt to be paid and you both owe it money equally. Is there any way of securing your debts against the house - maybe you can request that the credit cards secure the debts against the house and thus jump the queue ahead of the trust fund? Or get a secured loan of some kind?

But that wouldn't work would it?
The mortgage has 1st charge, presumably the trust has 2nd charge and any other secured loan that comes along will then have 3rd charge??

If the trust is more of a gentlemens agreement with no charge, then yes it would work.

Op needs to find this out really.

gauly

I assumed the trust didn't have a charge on the house otherwise the OP wouldn't have been able to get her debts put on the mortgage (at least not without gettting one of those Northern Rock style 125% thingies) and also she had to sign a legal document saying she would repay the debt to the trust (which would not be necessary if the debt was secured I would have thought).

ler01kjh

Definitely get the legal advice. But my thoughts are.... although you are legally the debtor for the credit cards, they are in reality joint debts. The 'reasonable person' might say you are equally liable for them (not just you!).

So you are not stuffed! In ordinary circumstances, you share equally the procedes and debt from the marriage. In your case, you have a strange £80k legal document. This is in effect a 'charge' against your ownership of the house, and is simply a joint debt to a third person (although I assume it is not a real charge on the property deeds?). I assume your husband signed this agreement too, and it was witnessed by a solicitor?

So the divorce settlement should include the £20k credit card debt plus any other liabilities you have, as well as divi out other assets, such as his and your pensions.

lea

Wow thanks for all your replies. I have contacted a local solicitor to get some legal advice.

The way I understand it all is there is no charge on the property and that the £80k belongs to the Trust, not my husband. Now the relative has died, my mother in law is the Trustee and once the legalities are sorted from the relatives death, mother in law is in charge of it all.

The £80k was never to be repaid if we stayed together, and it was done to basically prevent me running off with their families hard earned money! Which is fair enough, apart from my husband is the one who has left me, and also most of the debt is from his being unable to work for a year (he suffers from severe depression).

My understanding is that, if we sell the house for £195,000 for example, the mortgage has to be repaid first (approx £102,000 now), sale/solicitors fees, then the £80k out of whatevers left. Presumably if house prices dropped dramatically and there wasnt £80k left, we personally wouldnt have to pay it back, the rest would be written off (although I need to check that!)

The reason we had hoped to remortgage was that the debt would then be in joint names, and if there wasnt £80k equity left in the future when house was sold, we would just repay whatever we could from the equity and that would be that.

Does that make sense??

Thanks again for all your replies,
Lea
xxx