Removing your name from a mortgage after being discharged from bankruptcy

My wife’s name is still on the mortgage of a property she owned with an ex-partner. She went bankrupt, and has since been discharged, over the issue when they split up, he kept the flat on but now wants to have my wife’s name removed from the mortgage. If we go ahead and have the name removed does this have any legal/financial implications on her as the property is in negative equity?

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  • exlews
    exlews Posts: 12 Forumite
    Hi..Interested in your thread as your wife situation seems similar to mine. I am on my exs mortgage. We split up 10 years ago and I never paid into the house. Ever. I only lived in it 6 months. He lives there now with his wife. I m worried they migh view his house as an asset if I go bankrupt. There IS equity in it. Did your wife not have to sell because of the negative equity?
  • National_Debtline
    National_Debtline Posts: 7,998
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    Organisation Representative
    Nealet01 wrote: »
    My wife’s name is still on the mortgage of a property she owned with an ex-partner. She went bankrupt, and has since been discharged, over the issue when they split up, he kept the flat on but now wants to have my wife’s name removed from the mortgage. If we go ahead and have the name removed does this have any legal/financial implications on her as the property is in negative equity?


    Hi Nealet01 and welcome to the forum


    The issue may be persuading the mortgage lender to agree to remove your partner's name. If they issued the mortgage on the basis of 2 people being liable they usually like to keep it that way. However if the ex partner can show he can afford the mortgage on his own and has been doing that for a reasonable period of time they may be open to agreeing.


    As it currently stands if the house was sold or repossessed and there was a mortgage shortfall debt your partner could not be pursued as the debt would then be written off as part of her bankruptcy (it can only be included once the mortgage becomes unsecure).


    Best wishes


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • National_Debtline
    National_Debtline Posts: 7,998
    First Post First Anniversary Combo Breaker
    Organisation Representative
    exlews wrote: »
    Hi..Interested in your thread as your wife situation seems similar to mine. I am on my exs mortgage. We split up 10 years ago and I never paid into the house. Ever. I only lived in it 6 months. He lives there now with his wife. I m worried they migh view his house as an asset if I go bankrupt. There IS equity in it. Did your wife not have to sell because of the negative equity?


    Hi exlews


    When you are made bankrupt the OR will look to see whether you have any assets that can be sold to help pay off your debts. With a joint property they usually assume a 50/50 split of equity, however where you have evidence that this is not the case the OR can consider a different split.


    If you can show that you have never contributed towards the mortgage or household bills, and you only lived there for 6 months (10 years ago), then you may have a strong argument to say you have no interest in the property. If it could be argued you have some interest (which may be very small) there is an option for a third party, like your ex partner, to buy the interest to protect the property.


    Before applying for bankruptcy you may want to seek a legal opinion on the likelihood of being considered to have an interest in the property.


    Best wishes


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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