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

What is your partner suggesting? Would he try and go after his 50% or do you think he'd feel that was morally wrong?

I'm not an expert but surely if you sell the house now then you can split the proceeds however you choose? This may be sensible before things proceed further but either way get to a solicitor ASAP

As PP have said, you need to sever financial ties ASAP.

So sorry you’re in this mess, but if you think he’s going to run up more debt you really need to mitigate your losses. It’s not that he’s on the mortgage that means he’s entitled to half the equity.

it’s the fact he’s on the deeds as 50% owner.

You haven’t secured your deposit so can’t protect it at the moment

Get proper advice, a solicitor may be your best first port of call. It’s advice on property law You want. Family Law not relevant here

Severing the joint tenancy may help, Joint tenancy means you both own the property on a “joint and several basis” but it’s not my area so my knowledge is vague . From memory the process is straight forward.

He’s a duty to maintain the children but he can’t give what he does not have

You need to extrricate yourself asap and mitigate the damage Good luck

He’s also been told that with a debt management plan, it will take him 29 years to pay off his debt!

Once debts default they get passed to a debt collection company. In the vast majority of cases, they accept settlement figure. Discounting the original balance by up to 80% is not uncommon.

Whoever advised it would take 29 years to pay it all doesn't sound very experienced tbh. He wouldn't need to pay it all, nowhere close.

In his position I'd agree an amount that he can afford to pay with each individual creditor rather than an IVA.

This way your house won't be at risk. They have a duty of care to make sure your priority debts, such as mortgage and house bills are paid off, they then take all other expenses into account and come up with a figure. Interest will be freezes also. Most debts are then passed to a debt mgmt company who, after a period of time, will offer reduced settlement figures. His credit rating will be buggered for at least 6 years tho.

If the partner goes into an IVA it wouldn’t be him going after 50% of the property, it wouldn’t be the insolvency practitioner. The IP is duty-bound to maximise the pot for the creditors. To do this they’ll monitor income and force the sale of any assets such as houses and even cars, as well as taking any savings. I believe the only thing that’s off limits is his pension.

At this stage it could be seen as defrauding his creditors. OP really does need to see a solicitor and then put as much time as possible between taking action and her partner going into an IVA.

Be very careful with an IVA. I knew someone who took one out to protect her house without noticing in the small print that in year 4 she had to re-mortgage or sell her house.

How long do you have on your current mortgage deal? If he goes down the IVA route, he’ll likely be unmortgageable, so you’d either need to pass affordability yourself anyway (seems unlikely with £210k owing and 29k salary), or you’d be forced onto a hugely expensive SVR and would struggle with the repayments. So you’d be at risk of losing the house at that point anyway.

Take legal advice on selling asap and recouping as much as you can. He’s going to ruin your life, and you don’t owe him a bail out.

you need legal advice

in an ideal world, just get him the hell off the mortgage asap.

I don’t think this is accurate though due to the business position and the PG that the OPs partner have.

Sorry OP - the property is at risk due to the personal guarantee given. I work for administrators and whilst sometimes creditors can be reasonable, they will be. Concerned that they can recover their investment, or as much of it as possible. If things are not looking favourable they will take best price they can get from the business and seek the remainder from the other assets. They may register a notice against your property to give themselves priority for repayment over other unsecured debts.

I think you need to speak to a solicitor asap and discuss options for severing the joint ownership and protecting your half of the assets (it sound like it may well be took late to register deed of gift as the person agreeing to sign - your partner - needs to declare within the deed that they are solvent and don’t expect to be made bankrupt etc so that the court can ensure this isn’t a way of hiding/minimising assets - and it seems like that ship is about to set sail.

Deep breaths - speak to someone as soon as possible. Tell him not to sign anything just yet.

OP I have an IVA. It's not soemthing im proofs of at all, but maybe I can share some insight.

Having an IVA should be absolutely last resort. You have to complete yearly budgets which leave absolutely no spare money for things outside the budget. Any over time or bonus have to be reported to them and if they exceed a certain amount you have to pay into your IVA.
It can feel very controlling. It feels like I can't do anything to earn more money for myself.
It's ofc recorded on your credit file, and it's important to remember how far your credit file goes. Phone contracts, home and car insurance etc....
No little credit options like klarna try before you buy etc. no credit whatsoever for at least 5 years.
Certain jobs won't allow someone who has an IVA to work for them, particularly those in finance sector.

Joining the IVA overall was an extremely positive move for me. I do feel very controlled, but it has given me the chance to move on from my debt which controlled me even further. The 5 years is giving me some breathing space and chance to work on my spending issues.

It sounds like a good option for your partner but I would be concerned about you being brought into the agreeement and suffering the implications of an IVA!

You are screwed, I think, but you were when you let sentiment make you foolish and you pledged half your fortune and had three children to a man you weren’t willing or able to marry.

I love how you always say what other people are afraid to. I think you’re right, at this stage it will be difficult to do anything to protect the house without “defrauding” the creditors. Legally if not morally he’d be depriving himself of a significant asset…the same asset he put up as a personal guarantee.

I agree it was foolish of OP not to protect her deposit from the off (though that’s hardly helpful for her to hear now) but how would her situation be better if they were married?! Surely that would only make it more difficult to extricate herself from this hopeless man.

I don’t think she should have married this absolute financial moron. But she shouldn’t have awarded a mere boyfriend with half her house. I don’t understand having such a massively financially improvident person as more than a boyfriend—certainly not the father of three children.

Can you increase your hours and get your wages up and he do the childcare. If you split you will need to do this Anyway.

that may make you able to afford the mortgage. Figure out how much you need and see if it’s doable for you alone with an increased salary

I apologize if I seem to be advising OP to get into a time machine. I know that is impossible snd therefore quite unfair. Mh original point is that though it is very unfair that her house may be subsumed into his crisis that ship sailed when she put him on the deeds snd permitted him to act as co owner without any protection.

can you go up to a head of department or associate head for a salary bump OP.

see if he’ll agree to a house sale so you get your deposit back then split the equity.

you need to financiallly extricate yourself from this person asap. Do not enter into anything that will further tie you to him.

OP, get legal advice, you are receiving some bad advice on here about what IVAs do and don’t do, what creditors do and don’t do etc.

I would also recommend you ask the solicitor or lawyer about beneficial interest, especially if your partner considers bankruptcy.

It would be very unlikely that a court would order a repossession for unsecured debt and most of these debts will probably be sold to a debt collection company. The 29 years is nonsense. The defaults will stay on his record for 6 years and it doesn't matter how long they take to repay although most debt collection companies will accept discounts. I would suggest a DMP which is more flexible than an IVA. Protect your stake in the house by all means but I don't think you are at risk of losing it and I don't advise selling to pay off his debts. Is he now working?

I don’t think this is accurate though due to the business position and the PG that the OPs partner have. Sorry OP - the property is at risk due to the personal guarantee given

No, @LetsRedecorate. A Personal Guarantee is an unsecured liability. It is no more a risk to the op's home than an unpaid credit card. Credit-wise they're actually better as they are generally not reported to credit reference agencies after the Guarantor becomes personally liable.

Seeking a CCJ is usually a last resort in debt collection. Seeking a charging order, which is what would put a property at risk, is a step further again - and this is not common at all, despite what many of the previous posts are (incorrectly) suggesting.

There are thousands of people walking around with defaulted unsecured debt and mortgages and in the majority of cases it never affects an owned property (beyond poor mortgage renewal rates due to impacted credit scores).

Most of the 'info' on this thread about lenders 'going after the house as they want their money' (paraphrasing) is absolute nonsense and not how debt collection works in practice. Op (anyone) would be absolutely crazy to sell a house purely to repay unsecured debt because unsecured creditors do not expect OR pursue that in the vast, vast majority of cases.

Thank you for all of the advice. I’m definitely going to call around some financial/mortgage advisors today and then look into getting some support from a solicitor/lawyer too.

He is working and takes home around £3000 per month (self employed for can be up and down).

lots of these suggestions make a lot of sense but as I mentioned before my partner really cannot be trusted. He regularly doesn’t pay his bills as he’s not organised/stupid and has ignored these creditors for a long time before I found out which is why he’s already got a ccj and the others aren’t far behind.

I’m tempted to sell and just give him the money to pay these off and separate from
him, however I really don’t know where I would go with my children. Half of my equity just wouldn’t get me anything with my current salary and I’ve been looking for other jobs but nothing anywhere near the salary I would need has come up- I’ve also got childcare to think about/pay for as I currently get school holidays off and have my kids with me from 3.30pm which is unheard of in other roles.

My god this is stressful, I’m such a fool!

I put in 100% of the deposit and although on paper he’s entitled to half as he’s on the mortgage,

That isn’t how it works.

Is it the Deed that protects your deposit that isn’t valid for 5 years? That sounds odd. You can own a property as Tenants in Common and own different shares of the property. You paid £100k on a £290k property and also own half the mortgaged part. See a solicitor, get that in writing.

As a pp said, you need legal advice that is just for YOU. From a solicitor.

I don't understand why you think you can't afford to rent or buy on your own if you paid the whole deposit and have covered the whole mortgage? It doesn't sound like he's been contributing very much anyway.

Is his name on the actual deeds to the house or just the mortgage?