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DH huge mortgage shortfall - bank want to know about MY earnings to pay it back?

(222 Posts)
quickMoneyQuestion Wed 06-Jan-16 06:05:34

Long story short - before he even met me, DH bought a house with someone else (not an ex!). He hasn't lived there for years and the other person has been paying the mortgage as they have been living there.

About 2 years ago that person starting having problems, we tried to help pay the mortgage but we can't really afford it now and nor can they.

So - they are selling. There is negative equity of about £50k and it looks like DH and the other party will have to go bankrupt as it is an impossible amount to pay off.

Before we get to that stage however, the sale is going through and the bank want to know how DH is intending to pay off the arrears. To the extent that they have asked him about MY income and salary. Well, I don't want to give this information, and nor do I want a penny of my income going to pay off these arrears - we have discussed it and would rather him go bankrupt.

My question is - am I legally liable for any of this? Do they have a legal right to ask about MY money and to expect me to pay some of it towards the arrears? None of this mess is to do with me at all and I already deeply resent the situation DH has put me in without having to pay any of MY money towards the mess!

WipsGlitter Wed 06-Jan-16 06:28:44

I think because you are married they can do this. DP is an accountant and he mentioned something about someone we know going bankrupt and how his wife would now be liable for some of the debts even though it was her husbands business.

Absolute disclaimer - I wasn't listening properly so might have got it wrong!

fidel1ne Wed 06-Jan-16 06:34:29

Do you jointly own your home or other assets?

annandale Wed 06-Jan-16 06:40:09

What a nightmare. Yes I think you might be liable. You need proper legal advice - do you have any legal cover via house insurance or bank account or something?

quickMoneyQuestion Wed 06-Jan-16 06:46:54

Hi all and thanks for the replies so early in the morning!

We are currently renting, we own nothing, no assets. No legal cover or insurance.

This house was bought before we even met, so it really is nothing to do with me at all. And for the past two years I've thought to myself, "well, if DH has to go bankrupt then so be it, at least I'm not affected because this whole thing is nothing to do with me", and I got quite pissed off that the bank are asking for information about MY financials, such as my income and savings.

Surely, surely, I can't be liable for any of this shortfall - my name isn't on anything! - simply by virtue of being married to him??

JE1234 Wed 06-Jan-16 06:46:54

You need to speak to an insolvency specialist as it's a complex area. No, you are not liable for his debts but they do have to assess whether there are any joint assets and whether any savings you hold etc may have been contributed to by him. They also may be calculating how much he could afford for an IPO.

SisterViktorine Wed 06-Jan-16 06:47:08

Would it not be better to let the house out to tenants until the mortgage is paid off?

StealthPolarBear Wed 06-Jan-16 06:49:49

I may be being pathetic and sentimental but is this not part of being married? I'm sure I said all I have I share with you.
Anyway, hope the law is on your side and you're both ok soon.

quickMoneyQuestion Wed 06-Jan-16 06:50:47

Yes - once DH gets to the stage of having to go bankrupt (well assuming that's what he'll have to do), then obviously we will get advice from the debt charities and so on. But before it gets to that, the house has to be sold. And this is the point at which the bank are asking about my details. They are asking how DH and I are proposing to repay the shortfall, and asking DH to state my income and savings, and I just think that is exceptionally cheeky of them.

I'm wondering if I/DH refuses to give that information, do they have a leg to stand on if they then refuse a 'shortfall sale' as a result?

Catsize Wed 06-Jan-16 06:52:55

Sounds like you will and should be liable, sadly.

Had the house not been in negative equity, sold at a great profit and your DH divorced you/passed away (sorry), you would be entitled to some of the profit, and may even argue you should be.

quickMoneyQuestion Wed 06-Jan-16 06:53:04

Sister, the bank wouldn't agree to turning it into a BTL mortgage, sadly. We did go to them with many proposals, before it got this bad, and they turned them all down.

Stealth, oh absolutely. I am supporting him in every way and it is taking a huge emotional and physical toll on me. But it still rankles that our lives are being so massively affected by something that I wasn't even a part of.

Catsize Wed 06-Jan-16 06:54:24

And of course, even if applying for a credit card, husband's income/credit history would be considered. Sadly, him going bankrupt will massively affect your credit history too.

quickMoneyQuestion Wed 06-Jan-16 06:54:38

"Sounds like you will and should be liable, sadly."

Why should I be liable for a mortgage agreement for a house sale that was purchased by my DH before we even met?

quickMoneyQuestion Wed 06-Jan-16 06:55:31

Hopefully my credit history won't be too affected (or even affected at all) as we have no financials in common... everything is separate.

annandale Wed 06-Jan-16 06:55:51

Really sorry to keep banging on but you need legal advice. I've seen some great advice on this forum but unless you already know the law or know the poster is qualified it's impossible to tell if it's accurate or not.

My father once went bankrupt and my mother didn't despite his huge debts, but a) this was years ago and b) I don't know how it worked. It has affected the rest of their lives though. You MUST get proper advice today, or at least book an appointment.

JE1234 Wed 06-Jan-16 06:56:39

Sorry, that makes more sense now. Them asking about your earnings is them trying to avoid the bankruptcy. It's reasonable for all involved to try to find another solution if possible. Bankruptcy is a last resort. With your earnings taken in to account could the shortfall be paid off over an extended period? If so, that is likely to be the next suggestion.

JE1234 Wed 06-Jan-16 06:57:39

To echo a PP and my first post yes, you do need proper advice. You and your partner shouldn't enter into any of these talks without advice.

TTTatty Wed 06-Jan-16 06:58:37

I don't think you would be liable. I expect your income and savings are of interest to the bank as what you have 'frees up' some if your dh money iyswim.
The same as maintenance.

I don't think you are actually liable to repay the debt as as you say it is your husbands debt and you are not jointly liable even though married.
Obviously you need to take proper advice but, for example, if heaven forbid your husband died you would NOT be liable for his debts so I don't you are when he is alive!

SisterViktorine Wed 06-Jan-16 06:58:57

If you don't own any other property it doesn't count as a BTL does it? We let our only property- the bank are well aware of this and it has never been questioned. We didn't change the mortgage.

Snoopadoop Wed 06-Jan-16 06:59:29

I'm not an expert but as you are married I think they can ask to see your income and earnings. You state that none of this mess is down to you but legally you may find you share financial responsibility on account of being married.

FlyByNightSky Wed 06-Jan-16 07:00:12

That's what being married means though confused

It's a legal contract not just a day in in a dress followed by a holiday.

You have legally tied your finances together and this is why they want your information. It would infuriate me too but that's one of the reasons I will never marry!

TTTatty Wed 06-Jan-16 07:01:08

No it does not mean that. Debts belong to the person who took them out and are not shared on marriage

toastyarmadillo Wed 06-Jan-16 07:02:08

Your married, you will be affected. Try looking at it from the other side of the coin, say the property actually sold for loads more than the mortgage, you would be entitled to a share of the proceeded, therefore a loss is equally yours to bare. If you got divorced the property would be included in any financial breakdown of assets, and you would quite rightly, have a right to claim a share. Therefore yes you are liable, doesn't matter that it was purchased prior to your relationship or even that your name isn't on it.

Also if dh goes bankrupt, even with no shared finances you will definately have your credit rating adversely effected, sorry!

JE1234 Wed 06-Jan-16 07:03:35

OP, some of the advice you are getting on here is plain wrong. Yes, it makes logical sense but it isn't correct in your situation. Please, please, please seek out a debt and insolvency specialist.

Mistigri Wed 06-Jan-16 07:05:54

Get advice. The loan itself, if in your DH's name, is his liability. But you must have some financial connection if the bank is asking about you. Could your partner have taken out a joint loan without telling you? I would also be looking for advice on how to protect your own credit record.

It's possible for one partner to go bankrupt, you should keep be able to keep assets as long as they are in your own name.
www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/partners-and-bankruptcy/liability-for-joint-debts-if-your-partner-is-bankrupt/

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