Divorcing Bankrupt Husband trying to deal with Consent order

[IckleVivvy]

Help/Advice needed.... PLEASE!!!!

 

My soon to be ex husband was declared bankrupt in 2010. The OR has revested the property to him and I (jointly owned and negative equity). I have paid the mortgage and secured charge by my own means for nearly 3 years now. We are going through divorce and he has agreed for me to have the house as we have children. He wants a clean break and wants his name removed from the mortgage and secured charge. Neither company will do this and I would not be approved for refinance, despite paying it on time for 3 years! I dont know why they wont as they cant now go after him should any liability arise because of his bankruptcy.

 

I need to get a consent order for the divorce in relation to the house. Is there anything I can get put in the order to state he has no interest etc or am I between a rock and a hard place?

 

Just want an end to it all now. He has left me in debt with 2 children and pays pennies in maintenance cant even be bothered to see his children and has NEVER met his son. Just need shot of him for my peace of mind and to look forward to mine and my childrens future!!!

[unclebulgaria67]

Might not be the best time to sort the house situation out. If it is in negative equity, then you really want to be able to continue paying the current mortgage and hope that it returns to positive equity. What is the alternative at this moment. The mortgage company won't allow him to be removed and I am not sure you can take any court action to enable it.

 

Someone I know had a similar financial predicament and they waited a few years before doing the financial settlement. They then managed to get everything, when the house was in positive equity, leaving the ex with nothing.

[IckleVivvy]

Unfortunately the house is unlikely to ever be in equity as it has had to be underpinned

 

Thanks though

[unclebulgaria67]

I think you need some proper legal/financial advice and this is not possible on an online forum.

 

The problem with getting into a financial difficulty with a house in negative equity, is that if there was ever any repossession, the house would be sold by your mortgage company and the mortgage holders (you & your husband) would be responsible for any shortfall loss, plus any costs. So you don't really want to be making any short term decisions about who is responsible for the house, as putting the house in your sole name and taking on 100% of the burden, also means that you have 100% of the risk. You need proper legal advice to see what your best way forward is.

[IckleVivvy]

 

Thank you Unclebulgaria but I already am 100% liable for any shortfall, should it occur, due to his bakruptcy. He has never got to pay for any liability that may arise in the future as it would be classed as a contingent liability in his bankruptcy.

 

Will see if I can speak to a solicitor, pretty sure that I either take on the house or if I dont I am saddled with the debt and no house for myself and my two young children!!

[unclebulgaria67]

 

Thank you Unclebulgaria but I already am 100% liable for any shortfall, should it occur, due to his bakruptcy. He has never got to pay for any liability that may arise in the future as it would be classed as a contingent liability in his bankruptcy.

 

Will see if I can speak to a solicitor, pretty sure that I either take on the house or if I dont I am saddled with the debt and no house for myself and my two young children!!

 

Not sure it is correct about the husbands bankruptcy and him not sharing any mortgage shortfall loss. I am sure that I have read of some cases that have looked at this issue, as it would be unfair on the other mortgage holder to have 100% of a loss, due to spouse being bankrupt. This is where you need a solicitor who has knowledge of these matters.

[IckleVivvy]

I have taken that advice directly from the Insolvency Service so presume it is correct?

[IckleVivvy]

This is what the OR's office stated in an email 'I can confirm that even though Mr *** is still listed on both the mortgage and secured loan he is not and will not be liable for any liability that may arise in the future, as these debts are included within his bankruptcy. As both are in joint names, this means each of you are joint and severably liable, but as Mr *** are included with his bankruptcy and therefore he could not be pursued for them, you will be 100% liable.'

[unclebulgaria67]

This is what the OR's office stated in an email 'I can confirm that even though Mr *** is still listed on both the mortgage and secured loan he is not and will not be liable for any liability that may arise in the future, as these debts are included within his bankruptcy. As both are in joint names, this means each of you are joint and severably liable, but as Mr *** are included with his bankruptcy and therefore he could not be pursued for them, you will be 100% liable.'

 

 

Very unfair, as this may in future also leave you in a situation of needing to go bankrupt yourself, if you are subject to a large debt which you cannot pay. Definitely take legal advice about this situation, to see if there is anything you can do.

Edited January 27, 2013 by unclebulgaria67

[steampowered]

It is worth speaking to a specialist mortgage broker. They might be able to help. There is no particular reason why you would need to refinance with the same bank.

 

I guess an alternative might be to include a paragraph in the consent order stating that he has no equity interest in the house, you undertake to pay the mortgage yourself and he will promptly follow your reasonable directions in respect of any future sale of the property. If you can't refinance this is the closest thing possible to a clean break.

 

The OR's advice is correct. The mortgage company cannot pursue him personally for the debt. Their security is the house (I imagine he still jointly owns the house for now).

[IckleVivvy]

Thank you steampowered. Will be speaking to a Solicitor tomorrow so hoping this is the way forward (the paragraph you mentioned). Unfotunately due to the mess (financially) he has left me in re-financing with a new or even the same company is probably out of the window