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Divorce and Bankruptcy

(10 Posts)
Joy5 Wed 07-Nov-12 21:08:09

I've been separated from my H for a year now, finances still not sorted though not for want of trying. History is a few years ago we were in a mess financially so we agreed a Debt Man't Plan through Payplan, which H has continued to pay for the past year. I'm earning well under 10k, H about 40k. Was contacted by Payplan early this week, H now wants to transfer half of debts into my name, legally hes allowed to as their joint debts. Financially theres no way i can manage a payment, i'm getting tax credits but i'm only just managing to pay the household bills and buy food. Theres no money for extras, i'm talking a few Aldi sweets in my trolley each week just to save for christmas so my sons have something to upwrap. Payplans solution is for me to declare myself bankrupt. H's answer is we'll both declare ourselves bankrupt, he'll then not have to pay as much out each month to us. He doesn't give us a penny directly, he pays the mortgage direct to the building society. Hes already moved from a small flat, to a rented house, telling me his outgoings had now increased so he'd have to reduce the amount he was paying, hes also changed his car, how hes managed it financially i'm not sure as we're not supposed to take out any more loans. He has the spare money each money to afford it to do this, hes spending money socially too, hes still lives locally so i'm finding out. If he was seriously struggling for money i'd understand, except it just seems hes only doing it with the intention of hurting me yet again. He just seems to spend his time, working out new ways to avoid paying the mortgage for us. He has missed a few payments already this year, using the money to pay his bond on his house.
Has anyone any experience of H's deliberately declaring themselves bankrupt to avoid paying so much maintenance. I just don't know what to do anymore, i've picked myself up so many times in the last year, however hard its been, but this just seems too big for me to cope with.

CogitoErgoSometimes Thu 08-Nov-12 08:46:40

You need to talk either to CAB, a solicitor or both. If he has cash and isn't declaring it, that's a serious matter. If you have no hope of meeting any payments & Payplan are recommending you go that route, get a second opinion As there is a house in the mix, you're going to have to get your head round the idea that it may need to be sold as part of any finance/bankruptcy deal which means that you'd be looking at renting. Even if he did declare himself bankrupt, if he is still earning £40k p.a, he'd still be liable for maintenance. In the meantime, are you claiming all the state support you possibly can such as Tax Credits, CTC and so on? The Benefits Checker is a good one.

Joy5 Thu 08-Nov-12 11:41:45

Hi thanks for your reply, spoke to CAB on Monday, got an appointment in 3 weeks, earliest i could get. I'm on tax credits, which means i'm not eleigible for legal aid, i don't have the money to pay a solicitor. The debt is not linked to the house, so think thats safe. I did try and rent earlier this year, when my H missed a few mortgage payments, to get us away from that situation, i was turned down on my credit rating. I met with the housing authority at the council, i'm looking at a 10-15 year wait minimum for a council house. I'm speaking to Payplan again later this week, i think if i offer to make a minimum payment, and its accepted i may avoid bankruptcy. But that means it will stay on my credit rating for the next few years, meaning i'll still struggle to get somewhere else for us to live, whether renting or buying. Theres barely any equity in the house, even with a share after the finances are sorted out, it will be just a few thousand, not even enough to pay off my share of the loan.

Just seems so unfair my H is renting a friends house, has a new car, his income compared to mine, yet he can still decide that we have to somehow do without more, while he has the free income to enjoy single life.

Lougle Thu 08-Nov-12 12:00:42

Firstly, if you declare bankruptcy, it doesn't matter what debts you have, or how you got them, the house will be regarded as an asset which can be liquidised to meet your obligations. What usually happens one of two things:

1) You forfeit the house. The house is sold, and the proceeds go towards your debt.

2) You offer to buy the 'beneficial interest', which is basically the equity, and then continue to pay the mortgage. Technically, it can't be you who does this, so you have to have a trusted third party on board who will purchase the BI, but then transfer it to you.

Secondly, I don't know how much debt you are talking about here, but your DH can only become Bankrupt if a Judge in the Court adjudges him Bankrupt. In other words, if his assets or income are sufficient to meet his obligations, then he won't be able to declare bankruptcy.

Thirdly, if you declare bankruptcy, they will chase him for the whole debt. Also, vice versa. So if he declares himself Bankrupt, you will almost inevitably have to do the same.

Are your debts more than £15k?

CogitoErgoSometimes Thu 08-Nov-12 12:23:38

As said above, your house will be regarded as an asset and would be sold in the event of bankruptcy. Glad you're seeing CAB. Make full use of the time you get with them and keep notes. Who is doing your divorce for you if you haven't got a solicitor?

Joy5 Thu 08-Nov-12 13:43:53

H has filed for divorce, hes doing it himself, i saw a solicitor when i received the legal papers, a relative lent me the money to do so and i'm too pay it back when i can afford, but i don't want to ask for any more money, i didn't feel confident to sign them myself, especially the one relating to child access.
The debts are over 15k.
My husband has managed to pay his own outgoings, purchase a new car, pay the mortgage on the family home, and the loan for the past 12 months, and still have money left for a social life. I hope your right Lougle on him not being able to declare himself bankrupt, its me being pushed into to i'm worried about, and the long term consequences for our family home. I will need to downsize in a few years time, when i'm financially better off (i've been told i can work FT in the next academic year (i work in HE) so i should be able to do so, as long as i can keep my credit rating ok.

CogitoErgoSometimes Thu 08-Nov-12 13:59:10

You can always go back to your solicitor and ask for any subsequent fees to be deducted from your part of the settlement.

Polecat2011 Thu 08-Nov-12 14:36:25

You need good legal advice NOW. No doubt the debts are " joint and several" and the firms owed the debt (the creditors)can demand the full sums from you or him or both, but because he is a high earner they will demand the money owing from him not you. If they are in his sole name, leave them in his sole name. ON NO Account let him put any of the debts into your sole name. Very probably the firms owed the debts (creditors) would not accept this change anyway as you are unable to make repayments whereas your ex can make repayments. I doubt the creditors or a judge would accept you being responsible and unable to pay and would refuse to accept such a change. You need an ancillary relief application and soon. You need the judge to seek and undertaking from your ex to take on all the debt. If he were to declare himself bankrupt the judge could be persuaded that he did it on purpose to avoid repayment of the debt and could set aside the bankruptcy so that he would have to continue with the repayments. There is always the risk that he will give up his job or move to work overseas thereby avoiding his creditors. You need a solicitor and barrister with expertise in ancillary relief.

wheredidiputit Thu 08-Nov-12 14:47:43

And make sure the debt were run up during your marriage, not any he has accurred since he left.

Joy5 Mon 12-Nov-12 12:42:25

Thanks for everyones help, think the ancillary relief is the way to go, and really don't think exH will give up his job or work overseas. Or i hope not anyway Debts are in joint names, i don't want to not be responsible for them, but when the loan was taken out i was earning as little as i am now then, my exH was earning 40k. We can't continue to live in the family home indefinately, its a 5 bedroom house, i am responsible for paying the household bills on it, and i'm struggling to pay for heating. EH did originally agree to re-mortgage for us, and we had it agreed from the building society, but he then changed his mind about doing it as he thought he could get us to move into rented accommodation, and in turn it would reduce his maintenance. So i want to be in a position to re-mortgage myself, when i earn enough too, and want my credit rating to be ok so i can manage it.

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