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Divorce with huge debt problem

(43 Posts)
PAmummy Sat 24-Nov-12 15:59:57

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?

RedHelenB Sat 24-Nov-12 17:11:44

Need the financials sorted out asap & it will probably mean losing the house by the sound of things. Would exw be able to afford a 2 bed rental on her salary? Difficulty with IVA is that your partners credit rating will be screwed as well.

PAmummy Sat 24-Nov-12 18:20:07

Thank you RedHelenB. We have had our credit rating checked, and the IVA has not had an affect on my partners credit rating - but that is due to the fact that it is just in her name. She told us that he is liable to half because the money she spent was on things they needed, such as holidays, bits for the house etc. My partner was always under the impression that holidays etc were paid for from her salary, as she never used credit cards when out with him, and she hid all of the letters that came in.
We do need to get them sorted, but we are struggling to find the money to pay for legal fees. We want to know if it is worth persuing the legal route - we don't want to fork out money we don't have, only to find out that we have to pay her.
Selling the house may be an option, the interest rates are low at the moment, but if they go up, we could not afford to pay it.

wheredidiputit Sat 24-Nov-12 18:35:53

I think you need to check whether he is responsible for half the IVA as it her name only. Surely he would have to have it in either joint or his name.

PAmummy Sat 24-Nov-12 18:48:34

Thank you Wehredidiputit. Yes we thought so too, but because she claims the money was spent on the family home he is responsible, and we can not find anyone at the moment who can offer free advice. If it is found that we are not responsible for the payments, then we will pay for legal assistance in getting a court order for payments...however, we can't find any presidence of this anywhere. We are struggling so much, that I can't afford to pay for someone to tell us we have to carrying on paying!

scarlettsmummy2 Sat 24-Nov-12 18:50:36

I don't see why he would be responsible for her credit cards. I would want detailed statements from her showing exactly what she purchased on them that was for both their benefit.

scarlettsmummy2 Sat 24-Nov-12 18:52:09

You know what- I would just stop paying, and put the onus on her to prove that you have to.

Leithlurker Sat 24-Nov-12 19:08:05

Anything that was in joint names can and will be held against your DP, unless he can show that fraud was the means by which name was associated with the means of credit. This is not negotiable, in terms of the creditor will come after your DP even if he was ignorant of the spending. Once the IVA has been issued and this I would imagine will only cover the ex wife's sole liable debts, as again unless she has done so fraudulently he would need to be involved in the process of obtaining the IVA for joint debts it is highly likely that any outstanding debts not covered by the IVA are likely to be considered a priority recovery action by the creditors.

I think the part of the home that is being bought will have to be sold. This is a complicated process though as it involves other interested parties, so sooner that is got started the better. Stop paying her rent or at least stop paying it all. Sell any assests including cars, and household goods to pay off debts and give all of you some wiggle room. Go and seek urgent legal advice.

ginmakesitallok Sat 24-Nov-12 19:15:55

i'm with Scarlett - rather than you paying to prove you don't have to pay the IVA. let her pay to prove you do.

PAmummy Sat 24-Nov-12 19:18:54

Thank you all so much. The ex-wife has admitted it was her debt, the IVA is only in her name, the mortgage is in both their names.
We were told by her that the IVA, although only in her name, should be paid in half by him because it was for items for the house during their marriage. Other than the house, they have no other assets. With respect to the £16k debt on the joint credit card, he offered to pay half of this. Whilst he was not responsible for spending, he was aware that as his name is on the card, he is responsible - but as she lumped this in with her own debts he is unable to do so. I don't know how he would get hold of old statements for the joint card - He can not even remember the bank it was issued by, as he never used the card.
I think selling the house may be our only option, but we are worried for the child. Gosh this is such a nightmare.

Leithlurker Sat 24-Nov-12 19:54:07

I am not sure how as a joint debt she could get an IVA for her half, I hope someone with more knowledge can answer that. To me it means that she has either left your new DP high and dry with 8K worth of debt at least. Or she has managed to convince the credit card people to forget the debt entirely. I would sit tight with that one and see if someone comes knocking. Unfortunately what ever the card was used and who ever used the card is not relevant. It was in joint names so both are liable. Her point about the things being for the house and enjoyed by them both is also immaterial.

What might be useful to think through is moving assets, cars, houses, savings whatever in to your name or the name of someone else so that he has no assets.

PAmummy Sat 24-Nov-12 22:52:11

I don't know how it is a joint debt either. The IVA is all of her debts, and include the £16k. None of the IVA debt is in his name, and as the IVA has paid the creditors, we should not have anyone coming to our home. By law, the IVA is in her name and is therefore her responsiblity to pay (or so you would think) But she is saying that a court would ask him to pay half of the IVA (which is for £50k) even thought he did not ask for it, cause it, contribute to it, sign for it or agree to it.
As their child is living with the ex-wife, we also worry that he will be asked to continue to pay the mortgage - Don't know if we would be allowed to sell it. We had asked for her to take the mortgage herself, but the banks said no, because she took out the IVA.
They have no other assets, no cars, savings etc. Only the house.

We just need advice as to whether she is correct in saying that legally he has to pay half of the IVA (£50k) even though it is in her name.
We need to know whether we should sell the house or have to keep paying the mortgage until the child is 18.

Everywhere we look, we find inconclusive answers, and before deciding to instruct a lawyer, we need to know what we are legally bound to pay. We also need to know if having a new family will be taken into consideration with IVA payments and Mortgage payments, if we are forced to pay for them.

Leithlurker Sat 24-Nov-12 23:17:49

There seems no easy answers, apart from one. Your DP is not liable for any money due under the IVA, as you said she has made the arrangements for her debts, only her debts in her name should be covered by the Iva. Ok so this is restating what we agree. I do not see and here I am clearly saying I do not have enough knowledge and so you must go and see a solicitor or get advice from cab, or welfare rights agency, how the 16k worth of debt in you DP's name can be written off or set aside. I am warning you that this would be a specific thing i would look in to as quickly as possible if I were in your shoes.

Now the point you raise about who would take what in to account is not so easy. I cannot see how your DP can be forced to make payments for her IVA, but lets assume this happens. Your income and outgoings will be listed and a payment proposal of a nominal amount would be accepted, it has to be fair mind but if we said based on your info so far 10-20 pounds a month they would accept it as long as they could see your in come and outgoings. In fact they would be forced to accept it. Or less if you can only afford less.

The mortgage although the exact same process would be gone through and a reasonable offer is made to either reduce the payments, suspend the payments for a while, or only pay the interest, the mortgage company are NOT under any obligation to accept and could if they wished ignore you or at very least be unhelpful.

Till monday you can do nothing, and that will be very hard on you and your dp, try and get some good quality time together, get some sleep if you can, and for as much as possible try not to think about it, remember if you can do nothing then neither can anyone else. Monday morning get an appointment with cab and or a solicitor and a welfare rights/housing officer.

PAmummy Sun 25-Nov-12 08:13:01

Thank you Leithlurker, sometimes it is so hard to see the wood for the trees, that the possibility of paying less than the amount we are currently paying, had never crossed our mind. That is worth looking into.thank you. Looks like either way we are going to need to find the money for a solicitor sad

Chandon Sun 25-Nov-12 08:23:33

Yes, you do.

Nightmare for you!

RedHelenB Sun 25-Nov-12 12:46:39

I think it likely the house would be sold and debts cleared & each start with a clean sheet. Debts & assets are considered joint in a divorce court.

prh47bridge Sun 25-Nov-12 13:04:08

Did the court make an order regarding finances? If so what does the order have to say about the IVA?

PAmummy Sun 25-Nov-12 18:10:33

Did the court make an order regarding finances? If so what does the order have to say about the IVA? Answer, No and no.

She took out the IVA, after being given the divorce papers. She went to see a solicitor, who advised her to get the IVA and she said that her solicitor told her that DP is liable for half as the money used was for items during the marriage (forget the actual terminology). We have tried to get free advice as to whether we can fight this, but so far, the only advice we have been given is, if you pay us we can try and fight it for you... Which is not very promising. No one is able to tell us if we can sell the home and / or if her information of DP having to pay the IVA is acurate.

RedHelenB Sun 25-Nov-12 18:30:55

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.

PAmummy Sun 25-Nov-12 18:53:17

Thank you Red, that is advice we have not had before, but worth pursing. Thank you

SorrelForbes Sun 25-Nov-12 19:11:02

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.

PAmummy Sun 25-Nov-12 21:02:40

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.

RedHelenB Mon 26-Nov-12 08:04:56

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.

Bossybritches22 Mon 26-Nov-12 08:25:12

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.

prh47bridge Mon 26-Nov-12 11:23:56

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.

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