Debts when divorcing.

[Pleasance]

Please can anyone advise.
Step Son and his wife will divorce.

Mortgaged house, little capital in it. One young DC.

HP on a new car £25,000

Whilst married they ran up debts which my DH paid (£4,000) with a payback of £50.00 per month to start when SDIL returned to work following her maternity leave. Payments never started.

Marriage has ended. SS leased a flat as he needed somewhere to live. All costs (bonds, first rent) payed by DH. SS also took out payday loans which were racking up massive amounts of interest. DH has cleared these. Totals £10,000. Arrangement being a £130 a month payback. This has happened once

When divorce proceedings are started, can SS claim his debts against the marriage in order to pay DH back? ( through the financial statement).

Will this been seen a a 'gift' - both amounts loaned ( £4,000 during the marriage, £10,000 during the separation) by a family member so no chance of getting any of it back...except by agreement with SS after divorce.

Would it be more appropriate for SS to take out a loan for his debts, pay DH the lump sum, keeping DH out of it completely. There would then be 'official' debts rather than loans of family money.

Any advice much appreciated.

He needs to see a solicitor who will be able to advise once they have all the relevant facts. It may be that some or all of the loans will be taken into account in determining how much he and his wife each get in the financial settlement. It may be that some or all of the loans are viewed as entirely his and won't affect the settlement at all.

Thank you! And how does DH ensure the loan is repaid, if SS is left with little to pay it with?

Would it be more secure for SS to have a loan or credit card debts in terms of being recognized in the financial statement, than a loan to be repaid to a family member.

SS is in a mess mentally at the moment. Seeing a solicitor will happen but not just yet.

I am worried for our DIL too, if he keeps running up debts that she doesn't know about, will she have to give up the house to settle them on divorce.

It may be that post separation debts will be regarded as his debts, particularly if he is not being financially responsible. He needs to see a solicitor.

Yes, he does need to see a solicitor but can't/won't at the moment.

I think I hoped for some legal advice on here regarding the money owed back to us as family. Would this be regarded as a gift and therefore do we need him to take out a loan, repay us as a lump sum, so that he has an 'official' debt which will be part of any financial statement.

Maybe it doesn't make a difference whether the loan is from family or from an official source.

Scared that DH loses the loaned money because it is taken as a gift.

Scared that DH loses the loaned money because it is taken as a gift.

He might. It's hard to say! Is there proper documentation for the loans? Was DIL aware of them?

I don't think you realistically have the option of getting SS to take out a loan and pay it to your DH. For a start, that would look quite dodgy when they go through finances. Secondly, the new loan would be taken out after separation, so could very well be counted as stepsons rather than a marriage debt.

You really need legal advice. You can get some even if stepson isn't ready, although really, he doesn't have the option of not being ready to do that yet.

I think I hoped for some legal advice on here regarding the money owed back to us as family

I'm afraid you aren't going to get definitive answers on here. You need proper legal advice. The post separation debts may be regarded as his debts. The debts incurred during the marriage are more likely to be regarded as a joint debt.

Whether the court will view the money as a loan or a gift depends on the facts of the case. If all parties are agreed it is a loan it will be regarded as a loan. If DIL says it was a gift the court will decide on the balance of probabilities.

Thank you all for taking time to explain in a little more detail.

Lots of issues all happening at once, I thought this might be one we could solve.
I think DH should have stayed out of it all completely and made SS accountable but that's another story.

We will seek legal advice and continue to tell SS to do the same.

On the positive DH cleared SS's 'payday' loans and credit cards, so there will be a paper trail.

Thanks again!