Spectator N0 2651 By Fieldfare
Crosswords6 mins ago
Property Ownership - Joint Names - Bankruptcy
13 Answers
Is anyone able to offer some advice on the following scenario:
My ex Husband and my family home was owned in our joint names
We obtained a legal separation in Dec 2009 and I moved out of the family home a few days after that. I let him have the house, and I am renting accommodation. I take sole financial reponsibility for our two children and receive nothing from him for their upkeep.
My ex is unemployed and has been since the separation
Although I work full time, I was forced to declare myself bankrupt in Nov 2010 due to being a director in my ex's failed business venture, which left us both financially exposed.
My bankruptcy has now ended, but the mortgage company is still in the process of trying to take possession of the house. I am quite happy to hand back the keys and would have done this 2 years ago, but my hands are tied as my ex does not want to leave.
I am trying to rebuild my life and start afresh, trying to build a credit rating etc, but my name is still on the title deeds of the house which is being taken through the courts by the mortgage company.
I was under the impression that after bankruptcy, I would be able to start again. Can anyone offer some advice as to how I can go about clearing my name off the property in which my ex still lives???
My ex Husband and my family home was owned in our joint names
We obtained a legal separation in Dec 2009 and I moved out of the family home a few days after that. I let him have the house, and I am renting accommodation. I take sole financial reponsibility for our two children and receive nothing from him for their upkeep.
My ex is unemployed and has been since the separation
Although I work full time, I was forced to declare myself bankrupt in Nov 2010 due to being a director in my ex's failed business venture, which left us both financially exposed.
My bankruptcy has now ended, but the mortgage company is still in the process of trying to take possession of the house. I am quite happy to hand back the keys and would have done this 2 years ago, but my hands are tied as my ex does not want to leave.
I am trying to rebuild my life and start afresh, trying to build a credit rating etc, but my name is still on the title deeds of the house which is being taken through the courts by the mortgage company.
I was under the impression that after bankruptcy, I would be able to start again. Can anyone offer some advice as to how I can go about clearing my name off the property in which my ex still lives???
Answers
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They have been less than helpful to be honest!! I have actually emailed them today and will phone later to see if I can get to the bottom of it. But no, in short, I am actually none the wiser as to why I keep getting letters about the property when, as far as I am concerned, the bankruptcy left me with no assets or liabilities??
I think there are two separate issues here:
1. I assume you declared your part ownership when you became bankrupt. The Official Receiver (OR) should then have investigated whether you had any equity interest in the property. If there was, the OR should have made arrangements for this equity interest to be realised for your creditors. This could have meant getting the property sold, or putting a charge on it so money could be taken when it is later sold. If you didn't have an equity interest (i.e. if the outstanding mortgage was equal to, or more than, the property value) then the OR would either arrange to disclaim his interest or wait for about 2 years 3 months after you became bankrupt to see if there was then any equity - i.e. if the property value had increased. The OR should be able to tell you what of the above has been done;
2. You say the mortgage lender is trying to get possession. This does not necessarily have anything to do with your bankruptcy. The lender is presumably doing this because mortgage payments are in arrears. I don't see why you need to do anything about it. You will be named on any Court papers because you are a part owner but it is up to the Court to make the decision. Your ex's wish to remain in the property is a matter between him & the lender - if he can get the mortgage up to date, or agree a schedule with the lender to repay the arrears over a period, then the lender may withdraw the Court claim & let him remain. Otherwise, they are most likely to get a Court order, take possession & sell the property. It is important for you to realise that if this happens - either now or at any time in the future - you will NOT have any liability to the mortgage lender yourself. Normally, if a property is repossessed by the lender & then sold for less than the outstanding mortgage, the borrower(s) are liable to repay the shortfall. However, any liability you may have for that is covered by your bankruptcy & you will not have to pay anything if this situation arises.
1. I assume you declared your part ownership when you became bankrupt. The Official Receiver (OR) should then have investigated whether you had any equity interest in the property. If there was, the OR should have made arrangements for this equity interest to be realised for your creditors. This could have meant getting the property sold, or putting a charge on it so money could be taken when it is later sold. If you didn't have an equity interest (i.e. if the outstanding mortgage was equal to, or more than, the property value) then the OR would either arrange to disclaim his interest or wait for about 2 years 3 months after you became bankrupt to see if there was then any equity - i.e. if the property value had increased. The OR should be able to tell you what of the above has been done;
2. You say the mortgage lender is trying to get possession. This does not necessarily have anything to do with your bankruptcy. The lender is presumably doing this because mortgage payments are in arrears. I don't see why you need to do anything about it. You will be named on any Court papers because you are a part owner but it is up to the Court to make the decision. Your ex's wish to remain in the property is a matter between him & the lender - if he can get the mortgage up to date, or agree a schedule with the lender to repay the arrears over a period, then the lender may withdraw the Court claim & let him remain. Otherwise, they are most likely to get a Court order, take possession & sell the property. It is important for you to realise that if this happens - either now or at any time in the future - you will NOT have any liability to the mortgage lender yourself. Normally, if a property is repossessed by the lender & then sold for less than the outstanding mortgage, the borrower(s) are liable to repay the shortfall. However, any liability you may have for that is covered by your bankruptcy & you will not have to pay anything if this situation arises.
Are you sure about that, themas? A mortgage is a secured debt.
Secured Debts
The debt is enforceable only if it remains secured on that asset. If the asset was sold to provide funds towards the bankruptcy, but did not cover the amount owed, then that debt is no longer secured and therefore not enforceable.
http://www.abacusfina...schargeable-Debts.htm
Secured Debts
The debt is enforceable only if it remains secured on that asset. If the asset was sold to provide funds towards the bankruptcy, but did not cover the amount owed, then that debt is no longer secured and therefore not enforceable.
http://www.abacusfina...schargeable-Debts.htm
"I was under the impression that after bankruptcy, I would be able to start again"
Not strictly true. There are dependant factors
However, bankruptcy is definitely an easy option
If the mortgage co are in the process of repossessing you have nil chance of your name being removed and being cleared of the debt attached
Letting him have the house and actually being liable are 2 different things. As are being financially responsible for your children and their continued upkeep
Not strictly true. There are dependant factors
However, bankruptcy is definitely an easy option
If the mortgage co are in the process of repossessing you have nil chance of your name being removed and being cleared of the debt attached
Letting him have the house and actually being liable are 2 different things. As are being financially responsible for your children and their continued upkeep
The sale of a jointly owned property requires the consent of the co-owner or a court order.
After discharge all the bankruptcy debts become unenforceable except secured creditors and those listed below. A mortgage is a secured debt, if the mortgage provider decides to take court action to repossess the property and then sell it but insufficient equity was raised to pay the secured lender, that debt is no longer secured, but the unsecured part will remain unenforceable even if the property is not sold until after discharge; any jointly liable person will remain liable for the whole debt.
There are other debts, which do not become unenforceable, are:
Benefit and tax credit overpayments.
Council Tax.
Fines.
Student loans.
Maintenance and other family court orders.
Debts from personal injury claim.
Debts incurred through fraud.
Bankruptcy is not that easy an option.
After discharge all the bankruptcy debts become unenforceable except secured creditors and those listed below. A mortgage is a secured debt, if the mortgage provider decides to take court action to repossess the property and then sell it but insufficient equity was raised to pay the secured lender, that debt is no longer secured, but the unsecured part will remain unenforceable even if the property is not sold until after discharge; any jointly liable person will remain liable for the whole debt.
There are other debts, which do not become unenforceable, are:
Benefit and tax credit overpayments.
Council Tax.
Fines.
Student loans.
Maintenance and other family court orders.
Debts from personal injury claim.
Debts incurred through fraud.
Bankruptcy is not that easy an option.
hc4361
You say "Are you sure about that, themas? A mortgage is a secured debt." Yes, I am sure about what I wrote. I'm not sure exactly what you refer to, but the quote you give simply supports what I said - namely that any shortfall if the house is sold cannot be recovered from the bankrupt. Admittedly, the wording is not as clear as it might be, but "unenforceable" means it cannot be enforced against the bankrupt.
You say "Are you sure about that, themas? A mortgage is a secured debt." Yes, I am sure about what I wrote. I'm not sure exactly what you refer to, but the quote you give simply supports what I said - namely that any shortfall if the house is sold cannot be recovered from the bankrupt. Admittedly, the wording is not as clear as it might be, but "unenforceable" means it cannot be enforced against the bankrupt.
hc & oj
1. Yes, so long as the mortgage is secured on the house newleaf is liable for the payments - jointly with the ex. I did not say she is not.
2. What I did say is that if the house is repossessed & then sold for less than the outstanding mortgage newleaf will NOT be liable to pay any of the shortfall to the mortgage lender. This is because the shortfall is deemed to be covered by her bankruptcy. It does not matter that the repossession and sale take place after her discharge - the rules mean she is not liable.
1. Yes, so long as the mortgage is secured on the house newleaf is liable for the payments - jointly with the ex. I did not say she is not.
2. What I did say is that if the house is repossessed & then sold for less than the outstanding mortgage newleaf will NOT be liable to pay any of the shortfall to the mortgage lender. This is because the shortfall is deemed to be covered by her bankruptcy. It does not matter that the repossession and sale take place after her discharge - the rules mean she is not liable.
Thanks everyone!!
That is a little clearer and from what you are saying, I am still liable for the mortgage.
In answer to some of your questions: Yes, of course I declared my part-ownership in the property when I declared bankruptcy, so the OR is fully aware of details to do with the house.
No, the house wasn't sold to provide funds towards the bankruptcy. It is in negative equity so there would have been no point in doing that. The house is currently being repossessed by the mortgage company. My ex was not in a position to buy out my share.
From what some of you are saying, can I take it that because I have been discharged from my bankruptcy (as of mid Nov 2011), I am now liable again for any secured debt (ie the mortgage)?? That being the case, why go through all the grief/restrictions and problems associated with going bankrupt?
That is a little clearer and from what you are saying, I am still liable for the mortgage.
In answer to some of your questions: Yes, of course I declared my part-ownership in the property when I declared bankruptcy, so the OR is fully aware of details to do with the house.
No, the house wasn't sold to provide funds towards the bankruptcy. It is in negative equity so there would have been no point in doing that. The house is currently being repossessed by the mortgage company. My ex was not in a position to buy out my share.
From what some of you are saying, can I take it that because I have been discharged from my bankruptcy (as of mid Nov 2011), I am now liable again for any secured debt (ie the mortgage)?? That being the case, why go through all the grief/restrictions and problems associated with going bankrupt?
newleaf
Until the house is repossessed the mortgage lender can ask you & your ex for payments. But there is no point in you paying anything at all - they are going ahead with repossession anyway.
Once it is repossessed they will sell it & there will probably be a shortfall - i.e. it will fetch less than the outstanding mortgage + selling etc. costs. The lender will then attempt to recover that shortfall. You are NOT liable for any of it - it is covered by your bankruptcy even though the repossession and sale came after your discharge. If the mortgage lender tries to get any money from you (they should not do so, because they know you have been bankrupt) go back to the Insolvency Service and ask them to take it up with the lender. Do not get pressurised into paying anything - you do not owe it.
Until the house is repossessed the mortgage lender can ask you & your ex for payments. But there is no point in you paying anything at all - they are going ahead with repossession anyway.
Once it is repossessed they will sell it & there will probably be a shortfall - i.e. it will fetch less than the outstanding mortgage + selling etc. costs. The lender will then attempt to recover that shortfall. You are NOT liable for any of it - it is covered by your bankruptcy even though the repossession and sale came after your discharge. If the mortgage lender tries to get any money from you (they should not do so, because they know you have been bankrupt) go back to the Insolvency Service and ask them to take it up with the lender. Do not get pressurised into paying anything - you do not owe it.
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