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!

It is true that your DH going bankrupt will affect your credit rating.

I used to do credit references and lend money for a Credit Union so I saw many similar cases.

No disposable income i.e. after essential outgoings

My brother spent years paying off his wife's debts once they married - all the debts were incurred by her before they married - but once you marry you are financially "joined" in the eyes of banks and credit agencies and one person's debts affect the other.

31.7.71 Income received from spouse/civil partner/partner

It is reasonable to expect that within the household of the bankrupt and his/her family, the income received by a working spouse/civil partner/partner (all referred to as "partner" for the remainder of this section) or a partner who receives income from other independent means, will be used to contribute to the household expenditure in some way, for example by purchasing food, clothing for him/herself and any children, etc. The bankrupt may genuinely not know his/her partner’s income and/or the partner may not be willing to disclose it to the official receiver as they are not personally subject to the proceedings. Legal advice has been received that it is not a proper use of section 366 [note 6] to have a partner privately examined for the purpose of obtaining details of his/her income to establish whether an IPA/IPO may be obtained.

31.7.72 Ascertaining partner’s income where bankrupt does not co-operate

Where resistance to the disclosure of the partner's income is encountered, in the absence of any information to the contrary, it is appropriate for the official receiver to assume that the working partner pays for 50% of all household expenditure. This will enable an income payments calculation to be completed to ascertain whether there is any surplus, and the bankrupt’s share of that surplus, against which an IPA/IPO can be sought. It is likely that an assumption of this nature will provoke a response from the bankrupt and/or their partner and if the required information concerning the exact amount of the partner’s income is then received, the official receiver may re-calculate the income and expenditure of the bankrupt taking in to account this new information.

www.insolvencydirect.bis.gov.uk/technicalmanual/Ch25-36/Chapter31/part7/part3/part_3.htm#S.i

Be very very careful. You may be being persuaded to in effect take on joint and several liability for your husbands debts.

^ this x100

Don't give this bank your financial data unless you have clear legal advice (from a solicitor acting on your behalf, not your husband's) that this is a legal requirement.

Banks play really dirty when it comes to reclaiming debts. If they know his plan is to go bankrupt and not pay the debt, they are probably trying to line you up as someone who can and should pay.

Giving them access to your data helps them and hurts you.

It is not an unproblematic admin thing, although they might pretend it is.

I don't know how many people refuse to provide the spouse's or partner's financial information. I'm sure you have more practical experience here than I do fidel.

I only deal with general debt issues, i.e. before they file their petitions. Most SOAs I have seen are done on a 'separate finances, 50% costs split' basis. But only a small majority.

My posts were not intended to give detailed financial/bankruptcy advice they were intended to give a basic outline to urge the OP to take proper advice.

No I know, I'm probably being a bit pedantic

It's just that so many people go the BR route much later than would be wise, so it hangs over them longer. It's a viable option for large debts. (And yes, it's hard to summarise complex things in small posts here, before breakfast ).

Well OP, there is one thing you can learn from this thread- that many other people and their friends and family have been poorly advised! Good luck finding a specialist, it's a complex topic but they will be able to clarify things for you. There are a few bits of accurate advice on this thread but it is overwhelmingly incorrect.

I should say there are LOTS of good options and emphasise I'm ranting in a private, porridge-spattered, capacity, before I leave the thread I think

There seems to be a common misconception around here that wives are responsible for husbands' debts, and obviously that isn't the case. That's why this isn't the place to come for advice on financial matters - go to a specialist.

I've always been led to believe that regardless of whether you had any link or not to the property cause you are married you are jointly response able for his debt. I remember 2 cases when I worked at a high street bank. 1 being husband went bankrupt and the wife thought she would be ok but could never get a single thing on credit again, it was awful as they had to be evicted from they property so they could go on the council list as soon as they applied for a rented house the credit search come back and they was declined

That's not true at all doggy! You're not liable for someone's debt solely by virtue of being their spouse. With the couple you mention, their problem will have been that the wife and bankrupt husband were financially linked: maybe joint mortgage, account, joint debts etc. But it's possible to be married and not be financially linked at all.

Ilovemydoggy you are not liable for your husband's debts!!! I can assure you, I have been through debt management with my husband, and as long as the debt was not joint initially (like a joint mortgage or joint credit card), the debt is between the debtor and the original company (or whoever took over the loan). He is responsible for his debts and can go bankrupt or into an IVA without me being involved (you can involve the other person in terms of including their income to assess your spare capacity to pay, but they are not liable for the debt whatsoever!)

Now, this doesn't mean that you get a free pass to offload all your assets onto your spouse and then declare bankruptcy, and there are laws in place which prevent you doing this up to a few years before declaring, and if they think you have done this you can be prosecuted.

Please please seek financial advice from one of the debt agencies mentioned here run by government or the financial services sector (the ones where you don't pay charges) and get some proper advice.

Banks and other creditors often don't follow the law ilivemydoggy. If the person in question just rolls over and does as the bank request they will find themselves in a terrible position. There are no ethics

You are not liable and as you have no joint assets they can run and jump for it.

However, they may ask for details of your income to assess how much your DH can pay back. E.g. his income is X his outgoings are Y, but if you pay for half of Y they know how much of X is left to go towards repayments. However, they can not demand you give them this info. DH could just state you pay a % of Y and they can work from that, but don't give them your full details if you don't want to.

Get good advice, there is free advice out there. Avoid anything like a DMP, they are vultures. If you can afford to pay for advice see someone, but AVOID those DMP people.

Amazed at how many people are providing obviously ridiculously advice on this thread. I don't know anything about finance, so have no idea either way. If you don't have professional or personal expertise, why on earth would you think you can give complex debt advice to somebody in potentially dire financial straits? Step away from the keyboard!

Surely bankruptcy of the dh is just going to cause huge problems for a couple going into the future, with a dh who can't get credit, doesn't have his own car because it was sold to pay off debts, can't even have a normal bank account (if employed, where will his salary be paid into???), can't get rental agreements unless his spouse signs up for them in her name alone?

It seems very naive to me to think that letting your dh go bankrupt won't have an extremely negative effect on both your futures. I can't help thinking avoiding bankruptcy might be the better long term option. Definitely worth paying for legal advice!

Round about the town those things won't happen and the couple that do there are ways around

How would you suggest a person with no assets repays £50,000??

This is what bankruptcy is for, to stop people drowning under debt too large to repay (and why repay it? It's a loan against a house you don't even own?)

There is of course also jointly liable third party who may well have more assets to grab than the OP's DH (or might have less).

TAKE ADVICE!

round bankruptcy is a last resort and there are consequences to it, in terms of not being able to be a company director and possible liability in the future, but if you have to pay back £50,000 then you may just have to go bankrupt!

The alternative is to try to pay it back, but that then means the family as a whole will have to pay that out of salaries for many years to come. If you owe £50,000 and have to pay it back, then your credit rating will be shot for many years anyway!

There is no good scenario here where the family finances are unaffected or where credit ratings are unaffected.

The best case scenario is if the spouse keeps their good credit rating, has a good salary and so forth. That can then be used in the meantime until the other spouse eventually pays back/writes off the debts through bankruptcy, and their credit rating goes back up again.

But- rental agreements, other credit etc are always going to be problematic for a person who owes a large amount of money and can't pay!

'Second one still makes me want to cry a husband had all single products when he passed away the bank turned to the wife and started sending out threatening letters asking for the money back she used to come in everyday crying. '

I bet she did and how absolutely awful of the bank because she was under NO obligation to pay the money back - been there, got the t shirt!

The only information I have about joint liable debts is via my friends stressful case.

She had a joint mortgage with her ex BF it was in both their names. They never sorted this out when they broke up and she carried on paying, 14 years later he went bankrupt and as it was a joint asset they wanted some of that joint asset. They got about 20k and she did have legal advice which she paid a few hundred for, it did save her a few thousand though as the amount was negotiated.She almost lost her house, it took months to sort out.

This is not a joint debt between the op and her dh

I wouldn't go to CAB about bankruptcy. They don't have specialist financial advisors since their budget was cut and they are notoriously bad at bankruptcy advise anyway.

Advice, dammit. Blimmin autocorrect.

No bankruptcy does not mean te end of life.

Barclays will give an undischarged br an account. After approx one year he will be discharged and will be able to be a company director again.

Many people give bankrupts a bank account. They have to be offered a basic account by law. Bankruptcy is not life long. Many misconceptions on this thread. I agree CAB are rubbish at this.