Partners debts putting our house at risk of repossession

[Lorcee123]

Hi,
just looking for some advice really as I’m very stressed out.

I own a 3 bed house with my partner (together 9 years, not married) and we have 3 very young children together.
I put in all of the deposit when we bought the house (over 100k due to my previous house sale/equity). I stupidly didn’t sign anything to show this when buying the property. We have now signed the relevant document (3 months ago) but unfortunately it’s not legal for 5 years .This document would protect the house from being reposed due debt.

My partner has got into huge amounts of debt behind my back (totalling around 80k) due to a break down of his business and some very silly financial decisions.

we’ve been trying to pay things off but more and more came out that I didn’t know about and financially it’s just impossible. We’ve looked into an IVA (as this is the only option that protects the house from repossession and he has started the process.

Our relationship is not in a good place as you ca know probably imagine. Lots of lies/deceit and I just don’t feel like he’s the person I first met. He’s really let his family down. My initial thought process was to get through the financial nightmare that we’re in and then see how I feel about things going forward.

Here is my worry- if he goes through with the IVA, he’s tied in for 6 years. No decisions can be made either way the house during this time (I can’t take over myself or we can’t sell) or IVA will be stopped and the debts will be paid off with the equity in the house.

Hes keen to sign it but I’m worried that I will be stuck. If the relationship continues like this I won’t want to stay with him but what will I do? My money will be tied up in a house that can’t be sold and I won’t be able to afford to rent by myself and bring up my 3 children.
I feel like my only option is to take over the mortgage myself so it’s in my name and let him go bankrupt instead rather than sign the IVA. But I’m not in a position to take over the mortgage currently due to my low wage/childcare so where does this leave me?

what would you do in this situation?

i’d appreciate any advice x

How much is the property worth, how much is owed on the mortgage and how much unsecured debt?

Is the house in both names? If not can he move out and you be together apart until this is sorted and put it in your name alone whilst it gets sorted, you'll have to get a job to up your income. He can stay with family or lodge somewhere.

Speak to a solicitor regarding your options before DP signs anything. However I don't think it's wise to tie yourself to someone you no longer like, especially since it will be longer than six years (because he will do other stupid stuff in that time, you can guarantee it).

Your best course might be to sell the house, hope he honours the legal agreement (but he might not) and get as far away from him as possible. Otherwise I suspect you will have no hope and no future.

It’s worth £390k (Bucks area) Mortgage of £210k. He’s got 80k worth of debt made up of unsecured loans/credit cards but mainly large materials companies that he owes due to his construction company going into liquidation and having signed a personal guarantor on these accounts so the debts moved over to him personally.

Yes both our names. It’s worth noting he’s also been diagnosed with BPD recently and is extremely impulsive and always seems to make terrible decisions. My worry of him being out of the house physically but still on the mortgage is that he’ll just continue to build up debt away from me and the house will be repossessed a lot quicker. This is what I originally wanted but it’s clear I have to control this situation in order to not lose the house.
I’m currently a teacher and not sure what id do to up my income any more- I’ve been looking but it would be a complete career change and I’d have to work my way up, it wouldn’t be a quick process.

Yes I agree that he will continue to make stupid decisions, this is my worry.

unfortunately the legal agreement won’t be in place for 5 years (even though it’s been signed now) that’s just the process of it apparently. He’s got a few CCJ’s now and the other debts aren’t far behind the court stage either so they would demand the money with the sale of the house.

I’d also have no where to go with my children as I can’t afford rent alone or take on a mortgage myself just yet. I don’t have time on my side x

I would seek legal advice (from a family solicitor) asap before doing anything. Many offer free / reduced price initial consultations. You need to ask them how you can best protect the equity you put in. Based on your updates it seems like you really need to consider walking away from the relationship.

One thing that I was advised to do (upon starting divorce proceedings) was sever the joint tenancy. This changed the way we owned the house such that the other would not automatically inherit from the other. I’m wondering if this may be a way to ring fence at least half of the equity due to his debts. I’d definitely ask a solicitor if this would help you at all.

Honestly, I'd sell the house and use my share of the equity as a deposit on somewhere else. You say your income is low- are you working full time? If so, couldn't you get another mortgage?

An IVA is a legally binding agreement and if he doesn't make the payments, you could still lose the house. There's no way I'd spend every month for the next 5/6 years worrying that might happen.

I think you need to see a solicitor specifically to protect yourself. It sounds like your legal advice to date might have been aimed at protecting him/you as a family. What you need to do is protect you as an individual

I agree: see a solicitor. But also move quickly to sever all tues with your partner. You never married so its not clear to me why you should consider yourself liable for his debts or poor decisions at all (in either a legal or moral sense). While you don’t control the legal end—like whether his creditors can come after his half of the house—you should try to sever that potential liability. Sell the house and divvy up what is left. Ask him to pay you child support now and try to secure the benefit of what money he does have for your children.

Another thing to consider is that your partner's creditors may not accept the IVA proposal. At present if he sells the house (or they make him bankrupt and it's sold), they could get back 100% of the amount owed (minus costs in the case of bankruptcy). However under the terms of an IVA, they're likely to see a much lower return. I know I wouldn't accept it.

It's a lot of debt...however, your fears of the house being repossessed are unlikely to materialise. With unsecured debt, banks are unlikely to do anything except default the debts and send the balance to a debt collection agent - who have even less desire to try and force house sales.

The main thing you/he needs to be concerned with is communication. Bad debts only usually go really bad if the debtor refuses to engage. Banks don't go directly to CCJ...if he has one/several CCJs it implies there's already been a significant lack of communication with creditors and what's important is that that stops.

If you're a teacher, are you in a union? They often offer financial and legal support (although you may need more specialised advice than they can give)

Years ago, a family member went bankrupt. He was married with children. To protect wife and home, they filed for legal separation before filing.They had a joint mortgage at the time. Stayed together and the legal separation eventually expired. I was young at the time so don't know the ins and outs or if treated the same as IVA. This was back in the 90s so things may have changed.

Yes Legal separation and protect it everything in your name - he signs it over to you and then he rents

You need to take independent legal advice.

Taking him off the mortgage just before he goes bankrupt may not work. It could look like he is deliberately trying to protect “his” assets and avoid repaying his debts. Plenty of couples try to do this.

His IP won’t be able to advise YOU as their interest is in getting the most money for his creditors.

Why go for a formal solution, just do a debt management plan and if you are,going to separate then he can use his share of the equity which will be about 35k to make full and final offers. Who did you sign the agreement with- was a solicitor involved?

We’ve been told a debt management plan doesn’t protect the house- so the large companies can still force bankruptcy if they want to. I put in 100% of the deposit and although on paper he’s entitled to half as he’s on the mortgage, there’s no way I’m handing that over to him as I’ve also covered all mortgage costs. He’s continued to half of the bills during this time but not the mortgage. I worked so hard for my first house deposit and made a decent amount renovating and selling my first home so I don’t want to just hand him money so he can pay these debts and run away. If I give him half, I’ll also not have enough to put down on a house myself. Feel so lost with it all

Is this just for married couples?

Yes thank you I’ll ask

Yes you’re right, we still don’t know if it would even be accepted. His own personal debt repayments each month total £1000! So without a lower payment option and all out regular bills/mortgage payment it’s very tight even with 2 of us working full time

That does make sense but as I mentioned in another comment reply, I put in 100% of a large deposit. I’ve paid all the mortgage payments even though he’s on the mortgage as we’d agreed that that deposit money was Mine. Although legally he’s entitled to half I just can’t hand over half of my money to him and leave myself with such a small amount that I can’t even buy my own place with the kids. In the area I live in, I’d struggle to even get a very small 2 bed needing complete renovation with all of my deposit + earnings (29k a year) let alone with half of the money for the deposit, I’d really struggle

Thank you, yes I think I’ll arrange to speak to someone. Would a mortgage advisor be best? Financial advisor? Are they the same thing?

No expert and legal advice is recommended, but you should sever all financial and personal links to him. Entering into an IVA agreement with him when you've no bad debt yourself is madness, even more so as it would tie you to eachother for years, and seriously limit your future financial and personal choices.
I think the best course of action would be to sell the house and split the proceeds. Ideally you'd get your £100k back, and more, but taking 50% each for a quick end to this mess might be the best option. Then split up as you won't ever trust him again. What he does with his share is not your concern if you're not together.
Don't try to 'help' him, you can't. Besides you owe him no loyalty. He did this to you, don't forget that.

He’s also been told that with a debt management plan, it will take him 29 years to pay off his debt! After 6 years what’s left of debt with the IVA is written off.
theres no way he’d be able to to manage child maintenance on top of either of these if we spilt which is another worry for me. At least 6 years is sooner than 29!