I have another long OP open at the mo about this and have been getting good advice from a Scottish based person who tells me what applies up there.
Basically, separated couple (4+ years), still married, no legal or financial separation undertaken (they do have separate bank accounts). He stopped paying the mortgage and any bills recently; she's now doing it and struggling. Their 15 yr old DC is resident with her in the family home. DH has just told DW that he thinks he's about to be declared bankrupt. He's penniless.
House is as 'joint tenants', 100K owing in mortgage, some equity.
Q: when the creditors come calling, assuming DW can't afford to buy out DH, does she have to sell the house forthwith to free up DH's share of the equity for his creditors or is she 'safe' til DC is 18?
I'd advise her to get onto her council's website. Many offer free or low-cost solicitor's service for those experiencing financial breakdown, particularly in light of her relationship breakdown or see a Welfare Rights Adviser in her council.
Thanks. Is there any way the 'innocent' tenant can prevent this happening? Does having a DC under 18 hold any sway? I know that if they apply to be tenants in common now, the trustees look poorly upon this- though all she's doing is protecting the 'half' she owns which happens to be attached to the half he owns!
The person in Scotland suggested the trustee might off the bankrupt's half to the DW 'at a bit of a discount' for some reason. Might that be the case? Even so, I think the DW is up a poorly named creek without a visible means of propulsion...
Though there's no point crying over spilt milk, IF the DW had sought a divorce at the start and a financial settlement that probably saw her being awarded more than 50% of the house (caring for 3 DCs under 18 at the time) and paying the DH off, maybe in instalments, she'd be in a far better position right now? ie, her %age would be safe?
A song I have been singing, loudly, for four years....
I have wondered about 'what might have been' if only as a stab at 'see, we were right then, so why do you think our advice isn't correct now?' as a method of spurring her to act. She sings that lament of always 'putting the children first' yet is doing nothing to ensure they DCs have a solvent, homed mother to support them!
Well - and I know nothing about matters of separation, bankruptcy etc - to my mind the phrase 'about to be made bankrupt' means that she has a very short space of time to do anything positive she can do before 'about to be' becomes 'is'. Protect her assets or her stake in their assets.
When you say 'can take a while', do you mean the process of sending her the letter saying 'sorry, but sell up' might take ages to come through?
I think all she can do now is to wait and see when/if(?) he's declared BR then put the house on the market immediately so she can, as someone else suggested, at least not have her hand forced in a non-advantageous, shotgun deal.
Trouble is, I doubt she'll do anything as proactive as to demand he tells her the progress of the possible BR! Even though the door to that has been opened by him actually telling her of the possibility! The other OP tells the whole, sorry story.
Sorry - by 'take a while' I mean err well - how long is a piece of string.They didn't push it with my colleague after getting possession (while she continued to live there) for a couple of years, but she did have the house up for sale. But these people could decide to go for a very quick sale. She really is better off selling it under her own steam. Also, if they have a mortgage in common and he's bankrupt then they are financially linked, which could affect her ability to get credit or even another mortgage until they are financially dissociated.
How can they financially dissociate? I know if she arranged right now to change from 'joint tenants' to 'tenants in common', it takes a while, costs money and maybe is viewed dimly by the bankruptcy people? And would that even protect her?
I guess if he were declared BR and she had to sell the house and take her share, that would count as financially dissociated, wouldn't it?
I guess I'm a bit frustrated because I also have a similarly bury-her-head-in-the-sand friend. Though the situation is different in many ways, she is also in danger of losing her home due to actions of xh.
frank I see it more that she can't seem to get her head around the idea that the marriage is over. She's a ridiculously proud person- I mean, she wasn't as a newly single parent initially going to apply to get some financial assistance for her DD going to uni as she was ashamed of what the clerk in the finance office would think, ffs! Or extra hours at work because she didn't want the boss to know why. Us saying 'You don't actually have to tell her, you know!' cut no ice. She is an unfortunate combination of proud, with low-self esteem, yet egocentric.
I guess she will have financially disassociated herself with DH when the mortgage is cleared, so she should be able to get further finance in the future?