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Original poster

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

222 replies

quickMoneyQuestion · 06/01/2016 06:05

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!

OP posts:
TheSecondViola · 06/01/2016 11:32

She can bury her head in the sand if she wants. Her head, her sand. Whats it to you?

roundaboutthetown · 06/01/2016 11:35

She lives with him. His wealth or poverty have an effect on her whether they are financially linked or not. Did I say she should want to be dragged into it?? I think not... However, she lives with him and her quality of life is affected by his financial position, so she has to take an interest in it, for her own sake.

roundaboutthetown · 06/01/2016 11:35

She asked for advice. What's it to you, come to that?

DeoGratias · 06/01/2016 11:38

actually the person saying the only way to avoid this is to leave him - it's the other way round. As I said above if you divorce then and only then will his debts be deducted from your assets and then what is left split between you! So arguably you do worse divorcing than staying together although in either case the lender cannot come after her assets.

Walkingintheraindrops · 06/01/2016 11:41

Eh? She knows she's emotionally dragged into it and she knows it will affect her in the sense that a household bill will be associated with this debt (as in sure it is at the moment) but it doesn't affect her in the sense she needs to repay it or get involved in giving anyone her information. OP is clearly very involved. She doesn't have to be happy about it. I wouldn't either.

roundaboutthetown · 06/01/2016 11:42

Even more reason for seeking professional advice, then!

roundaboutthetown · 06/01/2016 11:43

And exactly where have I said she is involved in the sense of being legally liable for his debts?...

Walkingintheraindrops · 06/01/2016 11:56

You said she doesn't want to be involved. All she doesn't want to be involved in is repaying it

roundaboutthetown · 06/01/2016 12:13

His bankruptcy is going to affect what they can afford to do as a couple, so the reality is, she will be paying for his mistakes one way or the other. She just needs to ensure bankruptcy in their actual situation is the best option (which it may well be in the circumstances described), and if I were her, I would want to know the actual consequences of bankruptcy, rather than be surprised by them. Rather than following conflicting advice on mumsnet, I would want to know what he could continue to be able to afford post-bankruptcy, by getting professional advice. I wouldn't want to be surprised by the consequences and, eg, find out I had to move somewhere with cheaper rent, or buy my dh a car when I hadn't expected that.

TheSecondViola · 06/01/2016 12:15

Which is why what she needs is professional advice. Not your opinions.

Walkingintheraindrops · 06/01/2016 12:19

The sensible posters have said take advice from the beginning. With, in my case, the caveat that it's not as simple as that as there is a huge amount of poor quality and inaccurate/ insufficient advice out there. Things aren't as simple as MN posters would like to believe

Walkingintheraindrops · 06/01/2016 12:21

And it's not the bankruptcy per sae that's affecting their finances. It's the debt itself. The bankruptcy will in the most part relieve them I that burden. It is of course, not without its own problems but the implication here is that it would mean disaster. In fact, for many people, it's the best alternative.

PrimalLass · 06/01/2016 12:23

Have only skimmed through, but I take it you can't live there rather than paying rent elsewhere?

Fizrim · 06/01/2016 12:24

You say you are renting at the moment, if you rent a different property through an agent then the bankruptcy will show up then - you may need a guarantor.

Why did your DH not pay the mortgage for a few years? Was that with the agreement of the other owner, as you have been making a contribution for the last couple of years. Do the bank (I assume they are the mortgage lender) know that your DH didn't pay for a bit?

I would think it is standard practice for the bank to make enquiries when they realise that the mortgage will not be repaid in full by the sale of the property. Could they take out a smaller mortgage to cover the shortfall?

Walkingintheraindrops · 06/01/2016 12:54

Why would they take out a mortgage? Presumably if they could get a mortgage they'd get one for a house to live in together.

Bearbehind · 06/01/2016 12:57

Could they take out a smaller mortgage to cover the shortfall?

Ignoring the completely pointless 'why didn't your DH do this or that' fizrim, how on earth do you think the OP could secure a smaller mortgage?

They will have sold the problem house and have no other assets.

Fizrim · 06/01/2016 13:05

Not the OP, the DH and the other mortgagee! Will the bank block the sale if they are not repaid? We don't know much about the other mortgagee in this other than he covered the whole cost himself for a few years and has struggled for the last couple.

Bearbehind · 06/01/2016 13:12

Will the bank block the sale if they are not repaid?

FFS- some of these posts are beyond frightening.

Of course they will block the sale, they're hardly going to say 'ah, don't worry about that £50k, pay it back when you can' Hmm

The property is in negative equity.

The OP's DH has tried for 2 years to reach an agreement with the bank

Do you really think if remortgaging was an option they wouldn't have thought of that?

You certainly can't take out a mortgage on the property once it is sold in order to pay back the shortfall.

TheSecondViola · 06/01/2016 13:18

Could they take out a smaller mortgage to cover the shortfall?

Really? Bloody hell. With what for security?

roundaboutthetown · 06/01/2016 13:31

TheSecondViola - but my stated opinion is and always has been that she should get professional advice. Confused

DeoGratias · 06/01/2016 13:31

Some properties went up a lot in the last 2 years - £100k in London easily on small flats but sounds like that is not the case here and everything is just too late and no point crying over spilt milk. Yes take legal advice and ideally don't let him go bankrtupt if you can avoid it.

GruntledOne · 06/01/2016 13:36

you could get half an hours free legal advice from most solicitors

Please don't perpetuate this myth. You can get free legal advice from some solicitors if they choose to do so as a marketing tool; but no solicitor worth his salt would advise on this situation without seeing the mortgage documents.

GruntledOne · 06/01/2016 13:39

Anyway, isn't your DH liable only for half of that £50,000 debt?

Not if it's joint and several liability, which it probably is.

mrsnec · 06/01/2016 13:48

Hi,

Haven't read the entire thread but wanted to sympathise with op because I've been in a situation of having to make up a negative equity shortfall and we got some absolutely ridiculous advice from all sorts of people at the time.

My favourite being just hand the keys back and walk away!

Our building society weren't even prepared to discuss paying back the shortfall until the sale had completed but they did say they'd take the financial circumstances into consideration. We were joint owners and I was in financial difficulties owing a lot to my bank and I was in an iva and they said they wouldn't expect me to go bankrupt we'd just be paying smaller amounts for longer.

The rent on the place only just covered the mortgage. The sale with potentially the 50k shortfall fell through we bought ourselves some time and sold eventually with a smaller shortfall. We borrowed that from family and then I paid them back with money I got from an inheritance. It was one of the most stressful times of my life.

Fizrim · 06/01/2016 13:49

The OP said on the first page that she was concerned the bank may halt the sale - I was wondering if they'd actually said they would do that.

Yes, the OP and her DH said they have put various options to the bank in the preceeding years (all of which have been turned down) and it's a good time to remind the bank of that! They haven't ignored it by any means, they have put forward ideas and made efforts to maximise the bank's return.

The bank will have a set procedure to work through (remind them of your previous efforts ...) and I bet they are asking the same questions that you've already raised yourself in previous years, OP! You do have a buyer for the house which is good and I hope the sale goes through.