Separation, bankruptcy, divorce.... (long alert)

[LittenTree]

Sounds like a real bad movie, doesn't it?!

My friend is lovely but foolish.

Briefly: After 20 years of happy marriage, her DH turned weird (and 50...) and left. He now lives locally with another woman (who happens to be a solicitor..). Friend is still in disbelief nearly 5 years later ('I still love him, so I won't divorce him, in sickness and in health, this isn't the real DH' etc). She had to go back to work FT and was fortunately able to. Her youngest is now 15.

She is still in the family house with something like a £100k mortgage outstanding. They have made no financial arrangements whatsoever. He is in financial difficulty, because his 'finance-related' job has universally been a victim of The Crash. He is also a spendthrift as several of his mates are jack-the-lad local-boy-made-good and he feels a need to keep up appearances. I don't think they have any bank accounts in common any more. Gradually she has had to take over the household bills in their entirety, only discovering he'd reached a stage where he wasn't paying the mortgage on their joint tenancy home when she got a letter saying a payment had been missed. She was able to pay, though money is very tight.

She is obviously very upset and very angry and pretty confused (and breathtakingly inert about her predicament!) BUT, recently, after a lot of alcohol and a scene with us (me and another mate) she realised that she actually has to do something to protect herself when her DS reaches 18, under 3 years time. She is now planning on divorce in DS's 17th year (!!)- i.e. is seen to be making a decision but one that is far enough off that she doesn't have to 'own' it yet. And she is going to fight his assertion, made soon after they separated, that they'd sell up and he'd take 'his 50%'... she could probably get more than 50%.

ANYWAY (still with me?!), last weekend he came to her in a bit of a mess and told her that she needs to protect herself from him financially pdq as he thinks he will have to declare himself bankrupt very soon! (I am pleased that he, from his recent indifference and verbal aggression actually salvaged enough of his old self to have the decency to warn her, actually!).

What should she do?

Would instigating divorce proceedings been necessary to show they're no longer acting as a couple? Her only 'proof' of not being together is she has a grant for her DDs at uni based on her being a lone parent and the school sends out 2 school reports!

Might she lose the house, if not now but the day DS turns 18?

How can she protect herself from the fallout of his bankruptcy? Does she need to at all?

Any thoughts would be very welcome.

She, of course, could do this stuff herself but she's tech phobic (I know, I know) and hasn't set foot in a solicitor's office re her separation as 'she doesn't want to air her dirty laundry in public' etc etc. And it'll cost £ she doesn't have. But I feel I would like to advise her as best as I can, not that she's taken a great deal of notice of what we've said so far, mind! However, the fact HE has instigated this 'warning' may have girded her to action!

[cestlavielife]

just march her to a solicitors office and leave her there - get her to take a pack of documents paperwork related to finances with her assets bank details pensions value of house outstanding mortgage etcetc. her cincome, her purchase power to buy a house on her own etc etc.
she needs proper legal advice. urgently.

the only advice you can give her is to spend the money a fe whundred pounds no proper legal advice right now and get ball rolling re divorce.

[cestlavielife]

solicitor isnt public - between her and solicitor and teh court

[Rangirl]

She needs urgent specialist legal advice Get on to the law society and get a list of solicitors in your area specialising in insolvency If there is equity in the house which it sounds like there is and her husband is bankrupt the trustee will look to claim his share in the house assuming house in joint names She might be able to do a deal to buy his half from the trustee The divorce side of things is a red herring at this stage What she must not do is bury her head in the sand Sorry of that sounds harsh

[LittenTree]

Oh, I know that what happens between her and the solicitor is entirely confidential- she's, I'd say, ridiculously old school, feeling shame that her marriage didn't work out (because her DH had a mid-life breakdown, just like his own father did before him, actually!...). Me and the other mate had to make her ask the boss for more hours at work (she was doing 20 a week). Her reluctance was due to 'I don't want the (similarly aged, female) boss knowing my business'. Though we are a smallish outfit, 60 of us and public service, I was, tbh, a little bit taken aback at my friend's- well, arrogance, really in a) thinking our boss would actually give a judgey toss about why her marriage had failed, and b) making the assumption she'd have to tell the boss the real reason, rather than 'DS is now at secondary, do you have more hours for me to work?'- maybe unable to recognise that her personal catastrophe wasn't actually tearing the fabric of the universe!

Her pride could be her downfall, actually.

[Rangirl]

Posted to soon Meant to say I am rushing so just wanted to get the basics down Most solicitors will give her a basic chat on the phone for free

[LittenTree]

x with you, Rang, and nothing whatsoever harsh about that advice! Is is entirely what she needs to do! There might not be heaps of equity in the house but there'd be some. She appears to have done some maths that showed that 'her half' might buy her a small house in a cheap area.. well, that won't happen if his creditors grab it, will it?! Does having an under 18 in the house carry any weight do you think?

I was looking for the sort of information where I can tell her, 'Yes, your house is at risk, protect yourself'. I'm glad the divorce is a red herring as that's a real stumbling block. She sees it as 'final'- not that him living with another woman for nearly 5 years and not showing the slightest contrition for the appalling un-explained way he walked out seems to have encouraged her to understand that he ain't coming back! Even she says she wouldn't have him back!

[Rangirl]

His creditors cannot get her share of the equity in the house The under 18 son will buy her some time but will not stop things indefinitely (that is the case in Scotland ) to keep the house she would have to get the mortgage co to agree to let her take over the mortgage (which will be tricky) and buy out his share from the trustee (normally at a bit of a discount )

[LittenTree]

OK!- Can you tell me how does 'share of equity' work? As in will it automatically be 50/50 seeing as no 'spilt' has been negotiated? (NOTHING has been negotiated!). If she can't take over the mortgage alone (presumably her DH would have to agree to that! And she possibly doesn't earn enough even though she is paying it!) is she stuffed?

When you say 'trustee', sorry for being a numpty, but who's that? Is that someone post-bankruptcy who's administering DH's finances thus would oversee DH's share of teh equity?

OOI, if they'd legally agreed a 60/40 split in her favour, does that hold water in a bankruptcy situation, as in the creditors can only 'get' 40% of the equity?

I'm sorry to be dense (and am appreciating your time!) but a bit confused- if her 'share' in the equity is 'safe' why does she need to worry about getting the mortgage in her name and buying him out? Do you mean 'to ensure she keeps the house' she has to effectively buy it outright?

I don't think she's worried about keeping a 4 bedroom house once her DS is 'of age' (her DDs are young adults) but she wants 'her share' of it and is finally talking about getting more than half of it 'though wouldn't see him penniless' (said after the drunken 'to do' a couple of weeks ago!, pre-bankruptcy bombshell)

[Rangirl]

The trustee is the person appointed to manage the bankrupts affairs (in Scotland might be called something else in England) the trustee will look at the position as it is now per the titles ie who owns the house Assuming it is jointly owned the trustee will say ok house worth 200k mortgage of 100k. 100k of equity split 50/50
That give 50k to go to creditors He will want to sell the house to get the 50k Or he might agree to sell it to wife (or someone else say her parents ) at a discount to save the hassle If the house is sold wife will get her 1/2 share I think it will be very difficult to get the trustee to accept the title is held other than the way is actually is but she would need to take proper advice The mortgage co would have to agree (if they are told) and if her income does not stack up they wont Her husband won't have a say if he is sequestrated

[LittenTree]

I'm sure my friend would love to see her 'D'H sequestrated !

So would I be right in thinking that if, as seems likely, she cannot buy DH's share of the property from him/the Trustee, she will have to sell it anyway, though maybe not before DS reaches 18?

[Rangirl]

Indeed !
Yes it looks like the house will have to be sold In Scotland the fact there are children would not allow person to stay in house but I don't know about England

[LittenTree]

Blimey! We are in England but that certainly needs looking at further! I may post another OP to see if any English legal people know more, too. Thanks for your help!

[Rangirl]

I agree she needs proper specialist legal advice Some of the debts may be looked at as joint even though he ran them up if it's a joint account they were run up on if you tell me where you are I might be able to recommend someonez

[LittenTree]

Eastleigh, nr Southampton, Rangirl

I don't think the debts would necessarily be 'joint' inasmuch that when he walked out 4 odd years ago, he was in an OK financial position but I believe fear about his future prospects, working as he does/did in the financial services industry didn't help his precarious emotional position.

Frankly, though I didn't know him much at the time, I am amazed that he's managed to hold it all together this long! But it sounds as if the house of cards is about to come tumbling down. The only good thing is that he, uncharacteristically, did choose to actually pre-warn my friend of the impending tsunami and advise her to separate herself from him as much as possible.