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Divorce with huge debt problem(43 Posts)
My partner has recently divorced. This is rather complicated, so please bear with me, but you will understand why we need help!
Upon issuing the divorce papers to his now ex-wife, she informed him that she had £50,000 of debt. £16k was to a credit card which was in both their names (and therefore his responsibility even though he never used it), the rest is only in her name and relates to loans and credit cards.
My partner could not believe how she hid the debt from him, as she had a very good salary (as did he) and all of their outgoings were paid for by him, leaving the ex-wife with a large disposable income for nights out and holidays (shopping was paid for by my partner). The first we heard of the debt, was when she informed my partner that she had taken out an IVA and that he had to pay half of it.
They had a mortgage together which was a part rent/ part buy. He was paying all of these fees, along with child maintence and half of the IVA (outgoings of more than £900)
We could not afford to pay for the ex-wife's up keep, IVA and child maintenance, so she took on the 'rent' payments of the home. We tried to transfer the mortgate to her name as well, but the bank would not do so because she has an IVA.
We have recently had a child and I am now heading back to work, but with childcare costs, her mortgage, her IVA our own outgoings and my smaller salary, we are really struggling. I have a child from another relationship and I had to sit down with him and tell him that we could not afford to buy him anything for Christmas - after our outgoings, we only have £90 for the whole month.
The ex-wife, still has her salary, receives ctaxcredit and other help. My partner has joint custody of the child who is with us every weekend, half term and school holidays. the ex-wife will send the child to us with clothes that don't fit, so on top of child maintence, we buy new clothes on a weekly basis. What also is upsetting is that ex-wife talks openly of spending money and whilst I don't begrudge her for having a social life, but we are funding most of this, and it seems that we have no way out. Recently her brother moved in with her, but seems to make not contribution to the household. Can anyone offer help or advice here?
Hi PAmummy, I work for an IVA company.
In order for your partner to be responsible in any way to the IVA payments he needed to have signed an Authority to Act form and then the Proposal, both legal documents that allow the IVA company to act on your behalf when dealing with the creditors.
It doesn't matter what the debts were accumulated for (load of rubbish that as it was for the marital home etc!!) all that matters is who's name the IVA is in and which debts have been included (I bet my house on the 16k credit card being included, the more she can prove is "unaffordable" debt the more she will get written of, Yes written off! We write off over 60% of the debts of over 65% of our clients)
Admittedly I work in marketing but I know enough about the product to know this much. She's taking him for a ride. You can check if the details of the IVA via the Insolvency Service website. Because it goes through the courts it is published: http://www.bis.gov.uk/insolvency/personal-insolvency/individual-insolvency-register
You could then see exactly whose name is on it.
Hope this helps!
Oh dear. I suppose that shows couples should either have everything joint with total disclosure to the other person or else not marry with the risks that brings but just live together.
Also never treat wife's money as pin money perhaps and instead both pay 50% of all bills. Anyway it sounds very difficult. I suppose when choosing new partners aim to find one without previous commitments but it is no use my saying that now as you are with him. Just keep your finances as separate from his as possible.
It is certainly so that until a sealed consent order all the debts and cash etc of both whoever's name they are in are pooled and then split in any divorce.
Thank you again Xenia.
He does not mind paying the mortgage, nor does he mind supporting his child (he never would mind that) I think it is the fact that they both earnt the same amount, which was a decent and comfortable amount, and whilst married he paid all of the bills and her salary was the 'disposable income'. Holidays were to come from her salary, along with household goods and the like. He always said that if they could not afford it, don't buy it and naively assumed that the could. She took out loans and credit cards without telling him - she hid all of the letters from the her creditors and did not ever discuss with him the trouble she was in. All of the loans were in her name (bar the credit card perviously mentioned) and when the divorce papers were issued, signed and the decree absolute was confirmed than she took out an IVA and informed him that he was responsible for half of it. Prior to the decree absolute they discussed maintenance and mortgage.
If it is found that we need to continue to pay her, then we may need to seek help from National Debt Line for guidance in repayments.
In the short-term we will continue on this tough struggle to get through every month.
Clean breaks are lovely and the courts like them as neither adult can claim from the other. In our case I raised a big mortgage and bought out his capital claims. Most families cannot achieve that. In many cases of a non working wife and a husband on say £25k a year wife stays in home with child under child 18 anmd then equity in house split and until then husband pays support to wife and child (it is all very different if you are not married). In cases where his income is not enough to pay the mortgage and she cannot either and state benefits do not pay it then the property may have to be sold.
Anyway I didn't mean to be so negative about it all and it is worth paying a really good .awyer for even just one hour of practical advice even if you then go away and agree with the ex wife a consent order which I suspect will involve your ex paying her sums each month ideally direct to the mortgage company and to the IFA creditors rather than to her as if he pays just to her she may drink it all or buy clothes or whatever although I suspect a court would say she gets the money and chooses how to spend it. He might pay a little more if he knows it is going direct to a mortgage lender and he will get some of the equity eventually.
Thank you Xenia, this has been the most informative post, and really has been of great help.
I think we have no choice but to seek legal advice from now. To be honest, I just want it over, with no comeback on her part.
Yes, it is only a sealed consent order agreed between them and sealed by the court or a court order about finances which finalises an English divorce.
However in a sense it is nothing to do with you and you do not take on those liabilities. It is for your partner to sort out and pay. He should manage it and sort it out.
The bank willn ot come to you. You are not even married to him. If the mortgage part of the part ownership home is not paid the bank will come to him, yes as it is a joint debt between the couple. He presumably wants his child with her housed so will want to ensure that child is housed so not just paying because a court tells him but because of his moral responsibilty to his child although as you say the child is with you a fair bit too.
The court will look at how much money there is and who can afford what and what she and what he earns. It is not necessarily a fair split but whatever will ensure the child is housed in this case with its mother. So if it is going to be impossible for her and him to pay the rent/mortgage then she may have to sell and if there is a loss on the sale that will be his liability as much as hers.
I think there are some advantages in not finalising the decree absolute until the court consent order is in plaec but that's all over now so just get on with agreeing with her in writing the terms of this final court order. In an ideal world he and she would have what I had - a "clean break" - divide capital and neither adult supports the other. That only works if there is enough capital and they both can support themselves. If not the court order will be dividing capital (in the flat if any) which may well mean she gets it all until the child is 18 to ensure the child is housed and awarding the lower earner (her? in my case it was him of course - gender neutral and plenty of men have an ex who earns heaps more than they do) some on going payments she can use towards her mortgage and rent and food of the child and her and his childcare costs if she works.
Oh gosh this really is worrying.
The divorce has gone thought and they have been divorced now for 2 years, but I did not know she could still claim from us
If the mortgage is not paid, then the bank will come to us - Although it is both names, they do not recognise her, because of the IVA and as such will come to us.
Trust me , if we had known the trouble she was in before the divorce went through we would have out a financial order in place. We are just worried that we will have paid all this money for a solicitor and then find out we are still liable for the repayments. However the information that courts can determine a fair split is encouraging.
Also unless and until he can get off the mortgage he will never be able to buy a home with you.
Perhaps the best advise is never marry him as he will have financial claims on you and if you buy a house buy it in your name - but always take legal advice.
As people are saying the divorce was in effect done wrong. You hould get a court order - a consent order - which sets out in writing a full final settlement and all the financial terms. You can get an decree absolute without that but it is very unwise.
So in my view everythnign is up for grabs and they are in effect starting again with finances on divorce (never get involved with men still at this stage or have babies with them they cannot afford when they still have a first family to be responsible for - lesson for other posters),....
So 1. they need to tell each other about what money etc they have.
2. The basic rule will be add up all these debts in whoever's names and all their liabilities. If they have loads of money - unlikely - then split in half and go away into the sunset with just chidl support to pay. if here hardly enough money to get by then we will start with ensuring his child with her is protected - the rest of you are adults and knew what you were getting into.
3, So 15% of his net after tax income for his child with her. I cannot remember if the ex wife works or not. Let us assume your partner earns more than she does - he may have to pay her some support too which is why she is thinking he might pay part of her mortgage to house his child and part of her IVA. Let us assume his net income is 3 times hers then he may well have to pay her and her child, her mortgage on which document he still is and her IVA or part of it.
prh's advice is right. If he and she cannot agree these thigns in a document sealed by the court - a consent order - then the court has to decide how much . I think there is a shared ownership/part ownership part rent property she and the child live in. He may well have to keep paying towards that . She is paying the rent part. It may be that you, she and he all have to take on second jobs to make all this work and ensure all the children involved in this are properly supported by this complicated mix of parents and step parents who seem to have rushed into things and conceived new chidlren without even finalising their divorce in his case - not at all responsible.
Your partner needs to sort out the finances. It is a shame this didn't happen at the time of the divorce. Until a financial order has been made it is possible for his ex to make a claim against him. If, for example, he wins the lottery or receives a substantial inheritance she could claim a share.
He and his ex will both need to make a full financial disclosure. If they cannot agree a settlement between them the courts will determine a fair split. It may be possible to persuade the courts to treat the debts as wholly or mainly hers but that depends on the evidence.
assuming the rent part is still being paid?
I really think it would be worth the cost of a solicitor consultation - they are not truly divorced until the consent order is sorted - if your partner wins the lottery tomorrow she could have a claim on it. Out of interest, if he stops paying the mortgage what would happen to the house?
They have a part rent/ part buy scheme. The Rent is £575 and Mortgage is £278. He was paying both of these, but could not afford it on top of the IVA, so now only pays the £278 (with the added worry that interst rates my rise)
The IVA is £260
Child Maintenance is £204
Total is £742.
We don't have a mortgage, only renting
What % of his net income is your partner paying re the mortgage, maintenance & half the IVA payments? Do you have a mortgage of your own?
There is no court order regarding the finances. The divorce was a DIY case as DP thought it would be a straight forward split. It was only after he issued her with the papers, that she informed him of the debt. She signed the divorce papers, took out the IVA and told him that he had to pay half the debt.
We are already struggling with childcare costs, our own bills and household payments - Along with her IVA, her mortgage and child maintenance we are left with £50.43 for the rest of the month. We will need to take out a loan to pay for a solicitor - which is why we don't want to go ahead with solicitors etc if they are going to tell us that we are liable for the payments -one debt would be enough.
I have spent most of my maternity leave crying and worrying about how we are going to make ends meet. I have only been entitled to SMP, so it has already been a struggle - I am so totally fed up with living like this. This is now my last week of maternity leave and I feel like I have wasted my time worrying about her debt.
If we are liable, then the worry will not go away until it is all paid off, but if there is away or a reason, which means we don't pay, then I want to go for it. We just can't afford to take the risk of finding out and them saying we have to pay it. My eldest son, was so understanding of the fact that we are totally broke. His father and I split when he was very young, but he is still in contact with him. I am trying to arrange for him to spend Christmas day with him, because I can't bring myself watch my child wake on Christmas morning with no presents - I know that sounds so materialistic, but I feel like a failure as a mum and I really have had enough.
Sorry but did you read the top line - the answer was 'no and no'.
I have seen that post. It doesn't answer the question. It tells us that the ex took out the IVA after being given the divorce papers but does not say whether or not there was a court order regarding finances nor, if there was, does it tell us what that order had to say about the IVA.
You haven't actually answered the question as to whether or not there is a court order regarding finances. It is usual for an order to be made before the decree absolute. If there has been no order regarding finances your partner really needs to get that sorted.
Go and get a free half hour with a good sol to start with & take it from there.
If you are paying out all this money on the say so of the ex there is a strong possibilty she is exaggerating the truth ( to be diplomatic) so get it sorted. It may cost to get the legal advice but if it saves you in the long run its money well spent.
Your DP is obviously keen to do the right thing whic is a credit to him but at the same time he needs to balance the needs of his current situation and ALL the children concerned.
It will definitely need legal assistance. Any debt during the marriage or due to the separation (eg money for a deposit cos one partner needed to live elsewhere) will be seen as joint, buying luxury items after separation won't. But the sooner it is resolved the sooner your partner can gain financial independence.
Thank you SorrelForbes, That is the closest we have got to good news! It looks like the courts are the only option, but it is really good to hear the stories of others, in order to help us find the best solution - I am just worried because she never gave him the option of clearing half of the £16k (despite it not being his debt, but in his name) that this will go against him.
But from the information I have read so far, it is going to need legal assistance, which is going to make our financial situation even more difficult.
DH and I were in a very similar situation with his ex. They had some joint debt (overdraft, loan and credit card) which he transferred solely into his name when they separated. This has now been cleared.
At the time of separation, his ex also had two loans and a credit card, all solely in her name. She has not cleared this debt and has actually added to it over the last two years. She now has an IVA for those debts.
During the divorce process DH was advised by his solicitor that he would not be held liable for his ex's debt. At the court hearing following the financial disclosure, DH's ex tried to claim against DH for half her debt but the judge pointed out that DH had already taken on amounts far in excess of what she had owed at the time of separation.
Thank you Red, that is advice we have not had before, but worth pursing. Thank you
Your partner will only be able to resolve this by getting a consent order agreed regarding the financial side of the marriage which may or may not involve selling the house.
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