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

If you wanted to stay with him, I would make it conditional on him giving you full control of his finances. But of he's self employed that's trickier than just having his full salary paid into your joint account and you sorting out the bills and his debt repayments and then just giving him weekly pocket money. And do you really want to live like that in the long run?

As others have said, you really need to speak to a solicitor and find out what you can do to protect YOUR interests. You have to be selfish and not care about his. He doesn't care about you or your children; if he did he wouldn't have risked the roof over your head.

I really think you should leave him, but in the way which protects your financial interests the most.

The Trustee of the IVA should be able to answer all your queries, have you been to any meetings with your partner, if not I would.

A DMP is informal so can be cancelled at any time. It’s unlikely all creditors will agree as the debts are so high, but if you can get a DMP it may give you a few years to think of a more permanent debt solution.

He has a beneficial interest in the house whether he’s on the mortgage or not, so this will be taken into account for bankruptcy proceedings.

It is likely creditors with CCJ’s against him may attempt to put a charging order on the house. You definitely need financial advice I’m afraid.

@Lorcee123 Who has he taken advice from re the Iva? What is known as an iva factory in the industry who just give you a bog standard 7 year plan or an insolvency practitioner who specialises in bespoke IVAs for business owners. I used to work in insolvency (not doing ivas) and now do more general work. FYI and I appreciate it’s a bit late but it might help others - you can get insurance to cover personal guarantees.

it is totally possible for the Iva to cover off both your issues, if you can prove the deposit was yours, the IP can ring fence this. You can also have an iva that lasts 12 months where the liabilities are paid with a lump sum (ive seen both in the last 12 months approved by creditors). I am not an IP, but I would be trying to get the following approved: 12 month IVA with a lump sum of 50% of the equity after the original deposit is ring-fenced. This way it would be over sooner, he would be using his growth in value and 50% of the mortgage payments (which I appreciate you paid, but I’m guessing he covered other household bills etc whilst you were on mat leave).

A mortgage broker will be no help to you other than telling you whether it is possible to release the equity. You need an insolvency practitioner and go to the meetings with him.

I currently pay £800 a month for my mortgage which has recently gone up from £500. Rent on a 3 bed in my area is £1400 a month and I won’t be accepted on a mortgage currently due to my low wage. My partner is on the mortgage meaning his higher wage brings up what we could borrow. As much as I know I could afford the current mortgage myself, the mortgage lenders don’t seem to think so x

We’ve used a company recommended on hmrc, money saving expert etc. they are government backed rather than a random company from Google. He doesn’t have a company anymore so I’m assuming an independent IP couldn’t help?

what you’re saying makes sense but it means selling the house? my worry is that I have no options and no where to go. If I have 50% equity in my bank account with is not enough to buy another property myself, I also can’t get any help from universal credit should I find myself on my own with 3 kids because I’m expected to use the equity to live until there’s nothing left.
I could re train and find a higher paying job within a few years hopefully but where do I live in that time and who looks after my children whilst I train and have no money?

so many good suggestions but a low wage and 3 children with no support and potentially no home makes a bad situation so much worse.
I’m definitely going to try and look for some support today. Thanks.

It is likely creditors with CCJ’s against him may attempt to put a charging order on the house

No, it's not likely AT ALL @MoonieDoo .

In fact, it's incredibly unlikely, very uncommon and is the absolute last resort of a small group of creditors. MOST DCA's don't touch charging orders with a ten foot barge pole - they're messy, expensive, time-consuming and unless the debt is especially large, don't make good business sense.

Of the tiny percentage of cases where a charging order is even pursued, in the majority of those cases it will only be pursued when court ordered CCJ payments are already in significant arrears and the debtor is not engaging at all.