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

[quickMoneyQuestion]

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!

You are not liable and your husband's bankruptcy will absolve him off this debt - of course the bank would like you to agree to pay it!

I'm a CPA here in the US. The rules are somewhat similar but the US has better rules that protect a spouse IMO.

Here in the US without a prenup that precludes you to any gain or loss of the property the loss would fall onto you. In the UK prenup agreements are not valid so if this property was purchased before you married your DH then only his assets should be used to repay the debts.

I would be contact the CAB now as they should have access to specialists who can help you, as the wife, ensure you are not tangled up in this. Insolvency people are expensive so I would try the CAB first.

Good luck. I'm really happy I live in the US and have a prenup that protects DH and I from this plus a clause that protects both of us against the other talking out credit card debt in single name without the other spouse knowing about it. As DH earns far more than me I am so happy we have this clause. His one business credit card has a limit that is higher than my salary.

Having gone through divorce myself with my now ex dh having run up huge debts in his name alone (£50k plus) I think unfortunately you will be involved by purely being married unforunately. That's the nature of marriage - it also works the other way round in that if you wanted to claim a share of the sale of the property (if there was huge equity in it) you'd probably be able to by virtue of being married regardless of whether your name is on the deeds or not.

In the governments eyes when you are married you are counted as "one" - that's why your joint income is taken into consideration for tax credit and benefit purposes etc. They expect you to pool all your finances together and use the funds as one- I think the bank is expecting you to do the same in this circumstance to see if your dh has any means to avoid bankruptcy.

Really dodgy advice on here and I second the get proper advice.

Your money cannot be made to pay back the loan. It can be taken into account when looking at how much free money your dh has - say your rent is £600 then they could look at your money and say you are able to cover half of that rent so your dh is only required to pay half too.

You are NOT liable for a spouse's debts.

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

And in that^ case, if he DOES petition for BR, you have no issue with his half of joint assets being claimed by the Official Receiver. So far so good.

Just proceed on the basis that you are happy to have it assumed that you cover 50% of rent, bills etc. He can include his half of the outgoings in the Statement of Affairs (essentially a personal budget statement) he prepares for negotiations with the Bank and/or any debt solution or insolvency he enters into.

Quick as they are already in the process now is the time to get legal advice as the solicitor is going to want to know what is going to happen on redemption of the mortgage. This may or may not affect the sale.
Without legal advice you may refuse something that the bank are entitled to or equally give them something they are not entitled to and put yourself in a tricky position.

I think there is confusion on this thread between what happens on divorce when assets and debts have to be divided up and the position when a couple remain married.

100% I know for a fact DH has no other loans or debts taken out, and certainly not anything in my name. I can't really say how I know this without things becoming too identifiable(!), but I know for a fact that this is not the case. In fact, if it weren't for this shitty situation then life would be good.

I think it is clear that proper advice is the way forward for me, so I will look into that, thanks for the CAB suggestion as I hasn't thought of them. Thanks for all your advice.

Interesting about the posts to look at it from the other side - if it had been sold for a profit then funnily enough I wouldn't expect to receive anything - because it was an investment of DH's from before we were married (or had even met!). So no, I still wouldn't see that I had anything to do with it - whether it ended badly or well!

Hi OP, what an awful situation and a reminder that house prices have not being rapidly increasing recently in all parts of the country - there are people still in negative equity .

You will do well to repost your question on the Moneysavingexpert Bankruptcy forum where there will be knowledgeable people to advise you.

I suspect that they are trying to work out how much disposable income your DH has left after paying his share of your household costs - ie checking that he isn't paying all your household costs, you saving all your income and he claiming he has no money to be able to pay back his debt on his former property.

But I do think that legally you aren't responsible for his sole debts, even though it does feel like they are trying to get you to pay them back, albeit indirectly. But you do right to keep your accounts separate until the bankruptcy falls off his credit record. And BK is probably the best way to go unless you have a lot of disposable income, but obviously get advice before taking the plunge.

Having gone through divorce myself with my now ex dh having run up huge debts in his name alone (£50k plus) I think unfortunately you will be involved by purely being married unforunately. That's the nature of marriage

Please can people stop posting this . It is not accurate, although it's an understandable mistake.

I think the misconception arises because a debtor's creditors CAN seek to collect debts by pursuing the debtor's share of joint assets such as a house, thereby putting joint assets at risk.

I think there is a lot of 'confusion' about liability for debts and folk saying that once married you are liable in that definite way internet experts do!

As someone said the bank may like you to think you are liable but you are NOT

fidel1ne "And in that^ case, if he DOES petition for BR, you have no issue with his half of joint assets being claimed by the Official Receiver. So far so good."

Do you mean, I'd be happy with this, because we have no joint assets, so half of nothing is zero?! In which case, yes, I agree!

I second, or third the fact that there's a lot of very poor advice on this thread.

This, for example, just isn't true

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

If you have no financial link your credit rating will not be affected if he goes bankrupt. Obviously if you become financially linked in the future for whatever reason then that changes. Also, him being bankrupt may well adversely affect your lives very much but not your actual credit rating.

I'm no expert on this but I suspect the bank are trying to prevent people like your DH putting all their assets in the wife's name or bank account so it looks like they can't afford to pay back the negative equity which probably happens quite a lot.

You definitely need to get professional advice.

Exactly

Start here for CAB information;

www.citizensadvice.org.uk/debt-and-money/help-with-debt/options-for-getting-out-of-debt/

You really need legal advice. I know of someone who went bankrupt to avoid paying an order. His wife was not asked to pay it though she is losing a joint asset to do so.

Thank you Barbara - I am not sure I'm strong enough for the MSE forum yet, they all seem a little brusque to the point and I know it's friendlier here - but I must summon up the courage at some point!

And thanks Fidel1ne - no, divorce is definitely not on the cards, we just need to get through this particularly stressful stage then we can begin to rebuild our lives. I never, ever imagined being in this situation and it makes me quite angry.

Sadly, him going bankrupt will massively affect your credit history too

That isn't necessarily true. My DH lost a business and had to go bankrupt. My credit rating has remained excellent and I havent had a problem at all when seeking credit eg credit cards and car leasing.

Second the advice to see a professional.

This is complex but I don't think you will be liable. It's very, very hard to get advice for complex areas like this without paying a lot of money but do try CAB. Otherwise someone like shelter may help. Tbh neither are good for this sort of thing.

Although you are unlikely to be liable THEY WILL TRY. There is nothing to prevent them trying to persuade you to pay the debt and nothing to stop them taking your money if you agree. All your Hs creditors will try this. Don't expect them to follow what they are technically entitled to by law. They won't even look at that.

Good luck OP, do not give them
Any information or a penny. You don't sound like you're the type to cave anyway - good for you.

By the way your credit rating won't be affected by your Hs bankruptcy. Maintain yours so you can deal with future Rentals etc.

quickMoneyQuestion The Bankruptcy board probably is more friendly and sympathetic than other sections and you will get a 'please be nice to newbies' badge if you post .

Although I agree with you about other sections. If you posted in the Debt free wannabe section they would tell you how irresponsible you had been and how you should sit in the cold and dark and live on beans for however long it takes you to pay the debt back or in the 'discuss the economy' section they would say how stupid your DH had been to buy a property at the peak of the market and expect to make a fortune and how he deserves all he gets.

Sorry just saw there are no other creditors

I'm really happy I live in the US and have a prenup that protects DH and I from this plus a clause that protects both of us against the other talking out credit card debt in single name without the other spouse knowing about it

Yes, having legal prenups makes having gun laws that enable the slaughter of innocent people seem petty .

ExH acquired a significant amount of debt after the split and said I was liable for it as it was acquired before we got officially divorced (the bastard!). I had to go to court and spend a lot of money in solicitors to shake off this responsibility confered by marriage. So I would say that yes, you might also be liable for it.

Having said that... At some point he and his business partners were applying for a loan, and he put all his savings in my account to ensure the bank didn't take them into consideration. So I would say that you need legal/insolvency advice as I cannot get to understand how, as a wife, you are liable for already acquired debts but not when it comes to get more in debt.

Thanks Barbara and Walking. Think I have got something in my eye that you're all taking the time out to type me a message at silly o clock. It's really appreciated.

I will try the MSE forum soon. And no, I don't intend to pay them a penny. And yes, DH was silly and the first stage of this I was very angry at him for being so silly, even though there wasn't much he could do about it then! I then realised I had to switch from being angry to being supportive. It's flipping horrible waking up every day and thinking about it though. It's been two years now, in fact a bit longer, every day waking u with 'the dread'. We tried to make sure it didn't come to this, but now it has. It has affected everything, even TTC plans.

TBH I am half expecting the buyer to pull out and then the bank have said they will repossess. 50k, to a likely 80k... when it gets to silly figures like this then who's counting

If you check noddle.co.uk, it's free, it will show you if you are linked financially. Legally you can only check your own, dh can check his. Have you ever had a joint credit search done? For a bank account, savings account in some instances, historic loan, tenancy agreement? This would cause you to be linked financially - unless you are splitting up its extremely hard to get disassociated because you are obviously associated - most partners would help each other out if one was struggling and this effects money left for creditors.

TBH op, I'm surprised you didn't find out a bit more about this when you agreed to be married.