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Mumsnet has not checked the qualifications of anyone posting here. If you need help urgently or expert advice, please see our domestic violence webguide and/or relationships webguide. Many Mumsnetters experiencing domestic abuse have found this thread helpful: Listen up, everybody

Advice on debt in joint name and who should have money from house

36 replies

luckybun · 21/03/2012 10:04

HI - right, just wondered if anybody has any advice for me. My husband and I are separating, he is moving out while house is sold. House is in joint name but about 2 yrs ago his father paid off lump sum of mortgage, actually all of mortgage. At the time it was a gift but I have now been told that he did this in good faith that we would stay married..... ! He now wants his money when the house sells. Where do I stand??

On another note and actually far more serious in my eyes is that when we initially bought the house we got a loan out on top of mortgage for £28k for works to the house unsecured in both our names - I thought that H was paying this off, but it now appears that this is in serious arrears of £9k - ie we now owe £37K on this loan!!! He has been in touch with the loan company all along and so we have no ccjs etc just a vvvvv bad debt which I knew nothing about! I am furious with myself for not opening the mail from them but I honestly believed that H was looking after that and he certainly never let on to me that he hadn't been able to keep up with the payments. My concern now is that when we sell how on earth am I going to be able to rent something for myself and my DD if my credit rating has been shot to pieces by my STUPID ex?????

OP posts:
JustHecate · 21/03/2012 11:25

My first thought is he is saying that to screw you, and he'll probably give all that money to his son.

I am not a lawyer so I can't give you advice on it, but - as a layman - I'm not quite sure how his father would go about getting that money without your agreement - I'm assuming there's nothing in writing about paying it back if the house is sold?

I think you should see a solicitor, because I suspect they are trying to screw you over.

Loan company - just going to have to be paid from the proceeds from the sale of the house. 50/50. I think. Don't see what else can be done if the debt is in joint names. You don't want that hanging over your heads!

Re renting - you will probably find someone who will take you on if you are able to give them a larger deposit.

We have terrible credit (due to business collapse) and when we were looking into private rental, several landlords were happy to take us - as long as we paid 6 months rent in advance! Shock

Again - please get some good legal advice!

luckybun · 21/03/2012 11:41

Thanks, I think you are right though h says that his father is being fair and he will not get it! I think that is a) bollocks! And b) bonkers!

I suppose no need for me to be overly helpful in house sale - as lOng as I'm there I'm not having to pay rent!

Really don't want this to get nasty but it does seem to have that potential and I've got up think of my dd. I still feel guilty as I was the one that instigated our split - it was over him not being grown up and responsible and that was before I found out about the loan!!!

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JustHecate · 21/03/2012 11:45

Yeah. I don't believe that for a second. Daddy's going to have the money back. Right. Hmm He must think you're thick. Sounds like someone's trying to 'punish' you.

If he wants to repay his dad, he can always do so. You just stick to entitlements by law.

luckybun · 21/03/2012 11:57

Thanks - think u are right - sad that it's got to this - never imagined it :(

OP posts:
crestico · 21/03/2012 12:11

sorry to say i have experience in this
if this was done via a gift, can be proven as a gift, or was written legally as a deed of gift, it is his father's money (not yours, jointly or otherwise) until 7yrs have passed, unless his father files for bankruptcy.

also, shoot me down - but you really have no right to that money.
neither you nor your husband earnt it, and regardless what his father is going to do with it afterwards (yeah, will probably go straight to your ex) - he did give it in good faith, and courts are more than likely to agree that, if the marriage is to dissolve, his father is entitled to it back.

really sorry to say this, but i'd just give up on it.

the joint debt however you can do something about
especially if HE was the one who arranged it in both your names
you can very easily claim that you had no knowledge of the loan's debt and point to him as the culprit for it problems.

that being said, you must have signed something, so half of the original debt, less half of any of the repayments if you contributed to them, will still be yours.

long and short of it, it is looking financially painful for you. sorry

luckybun · 21/03/2012 12:33

Thanks - I rather fear you are right Crestico. However nothing was ever written about this payment by his father. initially we were paying him back (rent) but then a couple of years ago he told us that he had given it to us as a gift. Again - I've never seen anything on paper - certainly never signed any type of agreement for the money he paid. As far as I was concerned it was paid on our behalf. Does this change things?

OP posts:
JustHecate · 21/03/2012 12:38

cor, that's an absolute bitch of a situation, crestico.

OP - please get legal advice. that is the only way you can know what you can do about the situation you are in.

crestico · 21/03/2012 12:44

wow that confuses things!
as long as the word loan was never mentioned and no formal gift documents were setup ... you might have a slim chance of getting something out of this but again I honestly don't think you should bother - it really isn't your money and most courts will more than likely see it that way.

look at it this way:
if his father hadn't given you that money you'd owe more on your mortgage, you'd have lost more money in interest paying that off, and when the house sold and you split the proceeds, there'd be less to share.

I'd focus my efforts on only picking up 14k max of the 28k loan.

crestico · 21/03/2012 12:45

oh and just to mention - i went through the EXACT same thing, and this was the legal advice i was given

Shmumty · 21/03/2012 12:48

I think that legally you might well be entitled to half of the money your FIL gave his son who was then married to you. However morally I think you don't have a right to it.

ShotgunNotDoingThePans · 21/03/2012 12:56

I know that when a couple separate, any gifts are considered to be the property of the person in receipt of them.
Not sure if the same would apply in this instance - maybe a visit or phOnecall to cab?

luckybun · 21/03/2012 13:51

If his father hadn't have paid the money we would have sold the house and bought something cheaper that we could afford the mortgage payments on. I was always adverse to his father paying as I didn't want to feel indebted to him for ever but it sort of was just suddenly done - against my will.

I do understand that morally it's a tricky one as its not money I earned etc but if I had had my way we wouldn't be in this situation.

Going to see mediator to try to sort this but do u think I should see a solicitor independently first?

OP posts:
people · 21/03/2012 14:11

How did you manage to jointly buy a house you couldn't afford against your will?

I do think you need to take legal advice, but agree that you probably need to consider that you have been lucky to have had the benefit of the money while it lasted.

peugotgringo · 21/03/2012 14:43

Hi

Can't advise regarding the 'loan' from the FIL but I can regards the joint debt.

Although it is a joint debt you are in fact liable for the FULL debt until it is all paid off. You could come to an agreement that you'll pay half each but if he doesn't stick to that and you pay your half the company can still chase you for the rest of it.

Speak to whomever you owe the house loan on, explain what is going on, and offer an amount you can comfortably afford each month. Do not let them bully you into paying more than you can afford and do not ignore it.

luckybun · 21/03/2012 15:15

People - I didn't buy the house against my will, we could afford the repayments when we bought it! And I realise we have been very lucky BUT we wouldn't have been in this situation if h has not had his way and I wasn't really regarded during the arrangement between FIL and H.

I only want what's fair. I have suggested that FIL becomes my landlord and I pay him v v minimal rent for a long lease of say 16 yrs by which time DD will be 18 - am waiting to hear response

OP posts:
luckybun · 21/03/2012 15:16

I might add that FIL has no money concerns and was not expecting money back if we hadn't split!

OP posts:
people · 21/03/2012 15:17

OK, sorry, but you said:

"If his father hadn't have paid the money we would have sold the house and bought something cheaper that we could afford the mortgage payments on. I was always adverse to his father paying as I didn't want to feel indebted to him for ever but it sort of was just suddenly done - against my will. "

luckybun · 21/03/2012 15:19

Sorry for confusion people Confused

OP posts:
peugotgringo · 21/03/2012 15:20

I think the OP means that they could afford the house when initially bought, then they couldn't but FIL stepped in to pay the mortgage off so they could continue to stay there. However the OP would have preferred to sell and get a mortage that was more manageable without her FIL paying off the previous mortgage.

That's how I read it anyway Smile

luckybun · 21/03/2012 15:21

Peugotgringo - omg I HAD not realised that! Yikes what a sodding mess I am such a fool

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luckybun · 21/03/2012 15:22

PG yep to got it - thanks

OP posts:
izzyizin · 21/03/2012 15:27

It would seem to me that, in the absence of any deed or written agreement to the contrary, when your fil paid off the mortgage on your martial home he gave this sum of money as an outright gift without condition to both you and your h and you are therefore entitled to your fair share when the house is sold.

You didn't earn the money other than by virtue of being his son's wife but neither did you h earn the money other than by being your fil's son. This being the case, there is no moral issue that prohibits you from sharing in the proceeds of sale of the marital home and, furthermore, any such sale will leave you in the position of having to provide a roof over the head of your fil's dgc.

To my mind, any moral issue rests with the giver who, it would seem, is belatedly attempting to attach strings to what was given freely. If it was your fil's intention to exclude you from his largesse should his sons marriage come to an untimely end, he was at liberty to dictate terms impose legally binding conditions before he put his hand in his wallet.

With regard to the loan, I take it that by 'unsecured' you mean that, in event of default, the loan company cannot force the sale of the marital home in order to recover the debt?

As it is in joint names you will need to scrutinise the small print to see what liability either of you have to pay any outstanding amount in full should one of you default.

In the normal course of events, I would expect a debt counsellor to be able to negotiate a substantial reduction in the amount of interest that has accrued and a reapportionate of the original sum advanced plus agreed interest to date which may require separate agreements for repayment to be drawn up in each of your names .

Before entering into any mediation process, I would strongly suggest that you source a solicitor who specialises in divorce and family law and who offers a free intial half an hour consultation.

peugotgringo · 21/03/2012 15:29

Lucky, you are not a fool, just trusting.

Do you have any joint accounts? If so, these really need to be frozen immediately regardless of whether they are in credit or whose money it actually is in there. If they are in credit you may want to spend it all which of course you can do (I would never do this myself, freak) but I think this would cause potential problems for you in the future.

Additionally - call any creditors you may have (store, credit cards etc) explain that you are now in financial hardship and that you would like them to freeze any interest on your accounts.

luckybun · 21/03/2012 15:34

Izyizin thank you, you make alot of sense - wish you could be the words in my head when I'm trying to talk about it to h - I always loose my track!

I don't really trust FIL - apart from anything he is an accountant - no offense meant to any other accountant but all I mean is that he is much more experienced in dealing with money matters!! Wink

OP posts:
ameliagrey · 21/03/2012 15:35

But if the money was used to buy a house in joint names then the money is both of yours surely?

If his father gave him money the moment it hit the bank account, legally, it was 50% yours as you are married.

I can't see how it can work any other way.