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How can we save our jointly owned house? |
Submitted on: 16th May 2009 by Non-Member | Total Answers: 2
My husband has recently started a debt management plan for his business which is £80000 in debt. None of the debts are secured and I have nothing to do with the business. 18 months ago I added his name to my mortgage as we have been together for 11 years. I was told by the debt management company if I had not done this they could not have laid a claim to the house. If my husband survives paying off the debt for the next year and I return the house to my name only can they still lay a claim to it if he signs an agreement not to have any claim on the house?
The reason I ask is because a lot of the creditors are not being very helpful in reducing the payments or cancelling the interest so the debts continue to build.
How can we save our jointly owned house?
First of all, by a debt management plan I assume you mean an informal arrangement between your husband and his business creditors and he is liable personally on the debts. Also, you say the debts are not secured on anything which is also good news.
The bad news is, if your husband does default on the debts and then is made bankrupt, his slice of the house is also up for grabs to pay off the creditors.
The really good news is there are still options available should the debt management plan in place fail and there is still a long road to go down before bankruptcy or even having to fend off creditors after the house. You can consider an Insolvency Voluntary Arrangement or IVA which is a formal agreement between your husband and his creditors and which will result in a write-off of much of the debt as well as setting a realistic repayment plan which will last for a restricted period of time. As long as he sticks to those payments then you will be free and clear.
Even in the event of bankruptcy, the fact you are joint-owners of the property though you are not the debtor is going to create some issues for any creditor coming after the home to repay your husband’s debts. This is by no means certain however, and the debt management company is correct to advise you that if you had not placed your husband on the mortgage his creditors would not be able to look to the home in the event of default but they will definitely need a court order to do anything.
The best way of handling this situation is for you to consult with a debt professional that will provide you with objective advice in your own personal interests. The sooner you take this step then the sooner you will be able to put your own mind at rest and protect your own position before it spirals out of your control.
Re: How can we save our jointly owned house?
Further to the first answer.
Firstly is the company limited? Is it the company in the DMP or is it your partner? I assume it is actually a personal debt management plan dealing with his liability for those business debts?
You must not transfer your house from one name to another if your husband is currently in debt difficulty, if he does decide to go for an IVA that would seriously jeopardise it - and would be on record at the land registry. Being married for 11 years does mean he would have a claim on the equity in divorce for example so it also means there is a technical claim on the equity in insolvency which neeeds to be dealt with - he can't just give it away.
£80,000 is a lot of debt to be dealing with in a DMP, how long is it going to last for?
He is paying for a professional service from his DMP provider so if he is not happy he should be complaining to them.
Your husband really should speak to an insolvency practitioner who will be able to give definitive answers based on facts and figures. By all means speak to several and see what they say. They will usually give you a free consultation.
If you are unable to find one locally click on my name and email me at Debt Advice Foundation.
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