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ops30
Starting Member
3 Posts |
 Posted - 06 February 2009 : 22:46:23
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| I was divorced 10 years ago, and soon after, took a loan against a joint life policy. The policy is in both names, the loan in mine. What will happen to that debt when I go BR? I no longer pay any premiums on the policy which matures in 2011, my ex does. Loan was about 30% terminal value (now 50%, easy for assurance companies to loose millions without going BR!) |
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RHB
Senior Member
1159 Posts |
Posted - 07 February 2009 : 07:55:10
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| If a loan is in both names your ex should have agreed it. |
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John
New Member
United Kingdom
73 Posts |
Posted - 07 February 2009 : 08:13:16
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quote:
Originally posted by John
Hi ops
presumably you were only allowed to borrow against your interest in the policy?
This looks like a secured borrowing and is therefore not included in bankruptcy.
However, when it matures if your debt to the secured lender can be settled from your interest in the policy and there is any balance interest the OR will claim it. Your ex wife's interest should remain unaffected.
timendi causa est nescire
timendi causa est nescire
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ops30
Starting Member
3 Posts |
Posted - 07 February 2009 : 08:42:54
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Thanks for the responses. Yes, my wife did agree to it (she suggested it, which retrospectively, was a bad move on my part - took my debts to another level).
The loan was against my interest, and the way the fund is performing, it is likely to be equal to or less than the loan. However, a part of the loan's terms states that if no payments are made, the fund manager may deduct the outstanding amount from the fund. Better for me as the loan is devaluing every day that passes and the interest rate that was a snip at the time is now sky high!
I have to say, finding this site has been the most positive thing to happen to me this year. Thanks again.
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John
New Member
United Kingdom
73 Posts |
Posted - 07 February 2009 : 08:53:57
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Hi ops
in that case, you must enter the details of this debt in section 4 (secured) of your SoA.
You should then enter the details again in section 4 (unsecured). The exact amount of any shortfall on the debt when the policy matures is unknown so enter "unknown" in the amount column and the date incurred column. In the reason for debt column just enter "possible shortfall".
In this way you will ensure that if there is any shortfall later the balance owed will be written off in your bankruptcy.
timendi causa est nescire
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ops30
Starting Member
3 Posts |
Posted - 07 February 2009 : 09:01:38
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Hi John,
I think I will be using some help to complete the form, and have saved your advice for that purpose.
Humble gratitude! Nice to know there are those that don't have money as their god, although with the recent events, there are sure to be many more.
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I was divorced 10 years ago
