Unsecured debts

[Rosysky]

I’m writing this for my friend as she wasn’t sure how to work it. 5 years ago my friend and husband changed their house ownership to joint ownership from tenants in common. Her husband has some unsecured debts such as a loan and credit card in his name. They got legal advice and the solicitor said if anything happened to the husband the house couldn’t be classed as an asset if they are joint tenants and the debts would be written off. My friend has been doing some research and she’s worried because many sites talk about an insolvency administration order where they could force a sale of the house to pay his debts. This wasn’t mentioned by the solicitor and she’s worried she may need to sell the house after all if anything happened to her husband. Is it likely this could happen?

Possible yes. Likely? Probably not.

How much debt does the husband have? Is he struggling to pay it?

Makes not a jot of difference whether held as joint tenants or tenants in common, unless pre-change the husband owned more than 50%. On his insolvency the trustee in bankruptcy can still force a sale, and any creditors can still get charging orders.

Also if held as joint tenants you cannot take his half share by survivorship with his creditors missing out.

@ApocalypseNowt

Possible yes. Likely? Probably not.

How much debt does the husband have? Is he struggling to pay it?

He isn’t struggling to pay it but there’s a few years left on the loan and he uses the credit card for certain every day expenses.

@Collaborate

Also if held as joint tenants you cannot take his half share by survivorship with his creditors missing out.

Thank you, they have been told that would happen with tenants in common. But if you are joint tenants my friend will own the whole house instantly if her husband passed away. She is receiving lots of different information and getting confused and worried.

If that's what they've been advised then they've been missold and should complain (they ought to get a refund). The work was utterly unnecessary.

This is a handy explanation (you have no way of knowing I'm a qualified solicitor) - it's by the NI government but the rule applies UK-wide. www.nidirect.gov.uk/articles/debt-when-someone-dies

I’ve never known that to happen, the debts are normally written off. Especially if they’re not secured against the property and it’s just a few thousand pounds on a credit card and loan. Websites say it could happen but websites also say how rare it is.