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How do you split debt and equity without savings or selling the house

(21 Posts)
AgedandConfused Sun 31-Mar-19 10:05:23

We have equity in the house, enough to pay off all debt (I think) with a little bit of cash left over. However we have 2 dc and I would like to keep the family home for them if at all possible.

But we don't have any savings or any way of either buying the other out or paying of debts. Is there a way of dividing up the debt?

I'm in the process of trying to find a solicitor, but wondering what other people have done or what is possible.

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Goldilocks3Bears Sun 31-Mar-19 11:19:55

Court.

NotSureThisIsWhatIWant Sun 31-Mar-19 11:26:50

If you are married, the debt and assets belong to the two of you and the court will try to ensure you both start in the same footing so you can provide similar standards of living to the kids now that you are apart.

Court will help, but will be costly (the bill can easily go into 5 figures) and there is no guarantee they will make him get all the debt and you all the assets.

I would try to arrange mediation to sort the division of assets/debt while there is good will. Can you increase the mortgage to buy him out/pay the debts? Can you downsize?

In our case the court ordered for the house to be sold to cover the debts (mostly court fees) and provide each of us with a deposit to buy 2 smaller properties.

AgedandConfused Sun 31-Mar-19 11:30:32

I'd rather avoid court and I want the kids to be able to stay in the family home, whichever one of us lives there.

In the short term could I split it and pay half of the debt? I don't think I could increase the mortgage on my salary alone. Selling the house wouldn't give us enough for paying off debt and a deposit each I don't think.

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AJPTaylor Sun 31-Mar-19 11:36:00

Is the debt secured on the house?

AgedandConfused Sun 31-Mar-19 11:38:25

No it's. A personal loan and two interest free credit cards.

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Goldilocks3Bears Sun 31-Mar-19 11:40:27

You may find the children are less attached to the house than you. Investigate and see if you can stay in the house but if you can’t afford to buy him out, let alone settle debts, how is he supposed to move on?!

AgedandConfused Sun 31-Mar-19 11:45:01

I'm happy to move out. I just wanted to make this the least upsetting possible for the dc. One of them has autism,bso is attached to the house in the sense of routine.

In the short we can afford for me to move out and rent and cover half the debt. But perhaps our only choice will be selling the house.

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AgedandConfused Sun 31-Mar-19 11:47:04

We also have pets, and nowhere will rent with pets. It would be added devastationbto the kids to lose the pets too.

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NotSureThisIsWhatIWant Sun 31-Mar-19 11:52:49

The problem of splitting up is that you need to keep 2 households with the same amount of money that was used for one.

Disruption to the kids will happen, more so if there is autism, but do not under estimate your autistic kid, he will be able to adapt after a while. I know that sounds difficult at this time but it is much easier to take the right (but dreaded) steps from the start than going into a prolonged period where finances get tighter and tighter until you have to move any way.

NeverTwerkNaked Sun 31-Mar-19 11:56:20

Your autistic child needs two stable places to stay now, even if that means short term change to get there.
DP ex hung on to her 5 bed house for their two kids using this argument. And all DP could afford was a 2 bed flat and DSD who is autistic hated sharing a room. Be mindful of making sure they have a nice life with both parents.

NeverTwerkNaked Sun 31-Mar-19 11:57:34

I think the only fair solution would be that one or you takes on the house and the debts, and the other starts again with no equity and no debts?

NotSureThisIsWhatIWant Sun 31-Mar-19 11:58:27

How on Earth would that be fair?

AgedandConfused Sun 31-Mar-19 13:13:25

OK so maybe selling the house is the only way. But in the short term I can move out and rent. I'm not trying to screw him over. I feel bad enough as it is.

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NotSureThisIsWhatIWant Sun 31-Mar-19 19:08:46

At the beginning there is a lot of good will, which tends to get eroded as life takes you in different directions that is why it is important to get to an agreement while there is good will and you still trust each other and want the other to be ok.

That doesn’t mean you need to stay in the house until the decisions are taken or the house is sold, just start working together towards clearing that debt and set up a plan on how to go forwards. If you can get to an agreement that you both are happy with try to formalise it by court, again, while there is good will.

mug2018 Sun 31-Mar-19 20:12:20

My STBXH ran up debts during the course of our marriage: around £100k over 10 yrs with nothing to show for it. As soon as I advised him that I had seen a solicitor & was seeking a divorce, he started taking out loans again- £10k in 2 months.... he thought I would have to take on half the debt !! Which I don't as it's all in his name
Bottom line : through mediation, if the debt is joint name, you share it. If not, it's the sole responsibility of the person who took out the credit.

AgedandConfused Sun 31-Mar-19 20:16:45

Well the credit cards are in his name, but they were to cover joint spending. It wouldn't be fair for him to have to take that on. Especially as he doesn't want to divorce.

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NeverTwerkNaked Sun 31-Mar-19 23:41:10

NotSureThisIsWhatIWant - fair based on her description of the equity being about the same amount as the debt...

AgedandConfused Mon 01-Apr-19 09:34:55

A big issue for me at the moment is trying to be able to see a solicitor, but get the money out of joint account without him noticing.

We are moving to paying off the debts, but it will be a year/s not months.

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AgedandConfused Mon 01-Apr-19 10:35:42

I've worked that I could afford to stay in house and take on all the debt. But that seems really unfair, seeing as I am instigating the split. He couldn't afford to do it, as he earns less that me.

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Changedyetagain Mon 01-Apr-19 11:15:04

AgedandConfused I'm in a pretty similar situation to you other then none of my DC having autism.

I was also thinking that keeping the family home was the best thing for DC but when things got a bit difficult and we had to go look at rented accommodation they were so excited, they were very young when we moved into our home so have never experienced a house move and they really did love the idea unfortunately we've had other issues stopping is moving so still in the family home but they are still excited at the prospect of a move at some point.

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