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mark.6
Starting Member
1 Posts |
 Posted - 17 April 2010 : 14:01:29
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Hi, I am very stressed about my self inflicted situation and would really appreciate some advice.
I have significant unsecured debt all in my name (married)and would like to consider bankruptcy. My wife has no debts and even has significant savings from an inheritance.
We have our home and buy to let property in joint names. Does she have a legal right to purchase my share of the equity in our residential home? (there will be very little, if any). Also, we have no interest in keeping our btl as it has caused us nothing but grief. i originally bought the flat for myself before we met, but then remortgaged it into joint names in order to increase the income and qualify for a better mortgage product. It is probably about £20k in negative equity. Is there any way I can surrender the flat and add the shortfall to my bankruptcy? I alone pay the mortgage on it and benefit from the rent.
Any help would be greatly appreciated.
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 17 April 2010 : 14:13:57
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hi and welcome to the forum
any unsecured debt in your name will be removed by declaring BR
your wife can legally buy your share in the joint property as long as she pays market value for your share
if the mortgage on the BTL is in joint names , after your BR they would persue her for the mortgage and ultimately all of any shortfall after repossession and sale
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurhman)
RevivaUK and Paul Johns helped me through it all i can't recommend them enough!! |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 17 April 2010 : 14:18:35
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Hi Mark and welcome to the forum.
You raise a number of points and I will try to answer them as below:
If you petition as BR, the first thing the OR will do is "take" your interest in the two properties as Trustee. The OR will also take any interest you have jointly or soley in any other asset - say a car, boat, Picasso!!
If there is negative equity in your principal home, the OR will want to be satisfied of this and may arrange a "drive by" valuation or look on the Land Registry for completions of a similar property. They also look at portals such as RIghtmove, Find a Property etc.
Once it is established there is little or no equity, you will be offered the opportunity to arrange for the BI to be purchased.
Logically, if it is jointly owned, it would be your wife. This will cost her £1.00 plus TFTs fees (The ORs solicitor - based in Bristol)- these are currently £211.00.
As to your BTL, that may depend on the local office of the OR. We have a BTL (I am BR and my wife is not), both properties are in joint names and Sue purchased the BI in the principal home and the BI in the BTL is with TFT at the moment. There was a positive value (equity) in that so Sue has had to pay the OR some funds - we had a valuation done and so did the OR and we "met in the middle."
I am told that this is rare and that often the OR will take the rental and not pay the mortgage and the property eventually disapears - either by a forced sale or repossession.
I would think first about giving up on the BTL without first of all, seeking a valuation from a local independent estate agent.
Then you can see what is best - although, as I have said, the OR may simply retain his/her interest as Trustee.
I hope this assists and please come back and I will try to answer any further question.
You may get the benefit of other posts too - who are sharing their experise and/or experience.
I wish you and yours well. Richard
"There are no problems - only solutions" |
Edited by - Housing on 17 April 2010 14:22:39 |
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OutOfLuck
Starting Member
United Kingdom
3 Posts |
Posted - 17 April 2010 : 15:10:41
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Thank you Dave and Richard for your help.
Do you guys know of anyway to minimise the exposure to my wife for the shortfall in the BTL, i.e. Buy out her share of the property prior to BR? Just don't want to inflict her with any more pain or wreck her credit rating as well. I am hoping I can go through with this process without ruining our marriage. Mark |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 17 April 2010 : 15:51:03
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I wouldn't buy out her share now as the OR will look extremely closely at you finances during the previous 12 months to BR. If the property is in negative equity it won't make any difference as someone would still have to buy the BI.
Once you have been declared BR you can mention to the OR that your wife wants to buy the BI. As Housing says it will cost her £1 + £211 fees for the BI. This will not affect your wife's credit rating in any way.
BR only affects the credit rating of the person who is declared BR and no-one else regardless of whether they are living at the same address, married to the person, related to the person, etc. who is being declared BR. |
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OutOfLuck
Starting Member
United Kingdom
3 Posts |
Posted - 17 April 2010 : 16:00:21
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Thank you gettingoutofdebt for your reply,
My wife doesnt want anything to do with the BTL either, she only put her name on it to help with the remortgage. Is there any way of getting rid of it and adding the shortfall to my BR without dragging her into it? Selling it will be almost impossible as have £20k negativie equity and now is an unmortgageable property. Plus the neighbours upstairs and downstairs are a nightmare. If I bought her share out and did this through a solicitor, then waited for it to be repossessed, what would be the worst case scenario?
Thanks |
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RHB
Senior Member
1159 Posts |
Posted - 18 April 2010 : 08:47:17
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| EVEN if you bought her BI, she would still be on the mortgage & AS SUCH LIABLle for the shortfall |
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chester2005
Average Member
United Kingdom
786 Posts |
Posted - 18 April 2010 : 15:03:05
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if you could have her removed from the mortgage then the debt would be totally your resposibility but to do that close to BR could be seen as reason for a BRO as if your are insolvent now and "taking on new credit" ie. a new mortgage.
Dave
Don't worry or know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum.(Baz Lurhman)
RevivaUK and Paul Johns helped me through it all i can't recommend them enough!! |
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RHB
Senior Member
1159 Posts |
Posted - 19 April 2010 : 07:25:16
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| If your wife has a substancial inheritance is there no way you could use this to help your financial position? |
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OutOfLuck
Starting Member
United Kingdom
3 Posts |
Posted - 22 April 2010 : 17:20:52
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Thank you everyone for your replies.
My wife's inheritance is not enough to solve my problems anyway, and besides couldn't handle the guilt of using her late gran's hard earned money to pay for my own stupidity, even if my wife wanted to.
Probably didnt explain my situation very well. All the debts are in my name only, so my plan is to sell the BTL and use further borrowing, (which I can hopefully get on credit cards) to pay the shortfall to the mortgage lender, thus removing that joint liability. Then I may go bankrupt at some point in the future if i cant get well paid work and afford all the repayments. Our residential home will then be our only joint liability, which I am hoping, she would be entitled to purchase my interest in it. I am presuming that this will qualify me for a BRO, but at least it wouldnt affect my wife.
Thanks for reading. |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 22 April 2010 : 17:59:09
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stop OOL
speak to one of the experts before you dig an almighty hole.
They with experience may have other options, that will achieve the result that you desire but not allow you to make big errors of judgement.that may last a long long time
they may be able to use some of your wifes inheritance to negotiate your wife out of the equation.
Dont do as i did by my own bullish attitude i managed to pull my wife into Bankruptcy, that made very intersting conversation at meal times ! (pass the knife dear not throw it !)
I would recomend that you both speak to Paul at reviva, if you offer to get some biscuits to go with his cup of tea he may even arrange to visit you at home. It will be the best £1.40 you ever spend.
sorry ool trying to offer cyber advice that hurts but is upfront your best interests are in my mind
regards Richard |
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RHB
Senior Member
1159 Posts |
Posted - 22 April 2010 : 17:59:17
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| If it is unmortgagable, you may well not be able to sell it & your mortgage company may not allow you to. Why not borrow the money from your wife & pay her back??? |
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RHB
Senior Member
1159 Posts |
Posted - 22 April 2010 : 18:03:19
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| If it is unmortgagable, you may well not be able to sell it & your mortgage company may not allow you to. Why not borrow the money from your wife & pay her back??? |
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Housing
Senior Member
United Kingdom
1399 Posts |
Posted - 22 April 2010 : 21:02:32
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Hello,
Please do as Richard P says, stop and seek advice NOW - borrowing to get out of a hole will NOT help you!
Speak to Reviva UK - Ken will be able to guide you or speak to Melanine N at Jones Giles - either will be able to assist and guide you.
Good luck and take a step at a time and DO NOt even think about more borrowing!!
Regards, Richard
quote:
Originally posted by OutOfLuck
Thank you everyone for your replies.
My wife's inheritance is not enough to solve my problems anyway, and besides couldn't handle the guilt of using her late gran's hard earned money to pay for my own stupidity, even if my wife wanted to.
Probably didnt explain my situation very well. All the debts are in my name only, so my plan is to sell the BTL and use further borrowing, (which I can hopefully get on credit cards) to pay the shortfall to the mortgage lender, thus removing that joint liability. Then I may go bankrupt at some point in the future if i cant get well paid work and afford all the repayments. Our residential home will then be our only joint liability, which I am hoping, she would be entitled to purchase my interest in it. I am presuming that this will qualify me for a BRO, but at least it wouldnt affect my wife.
Thanks for reading.
"There are no problems - only solutions" |
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stressed about my self inflicted situation
