a large amount of debt

[nw_]

Hi Guys,

My wife and I separated about 5 years ago and in that time I have now discovered that she has accumalated a large amount of debt which is all in her name.

The debt is as follows:-

Mortgage - 105k (£725 per month)25 years left to run

Secured loan on house - 35k (£450 pm) 25 years to run

Hire purchase agreement - £3k (£120 pm) 4 years left to run

Credit cards - £12k over about 3 creditors

My wifes net pay is approx. £1100 per month

She is currently selling her house for about £130k. When the sale goes through she will be able to clear the mortgage and part of the secured loan. My questions therefore are:-

1) When the house is sold will the secured loan automatically then become unsecured?
2) Will she qualify for an IVA?
3) If my wife moves back in with me in my house, will I and my address also be credit black listed and will my finances/earnings then be scrutinised in order for her IVA monthly repayment to be calculated?
My net pay is approx. £1200 per month. I have no debts but very little disposable income. My mortgage is around £285 per month.

Thanks for any advice you can provide.

[mikebdomain]

Hi nw_

I read your post with interest – how is your wife selling her property without paying off all of the secured. In my experience your wife will need to find the shortfall of the secured loan prior to being able to sell the house.


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[MelanieGiles]

If your wife is insolvent, and she sells her house, then the balance of the secured loan will become unsecured in her estate, but she will need to persuade the secured lender to remove their charge in order to give good title to the purchaser.

Your wife may qualify for an IVA, however she is best to wait until the house is sold when the secured loan postion is more certain. In the meantime pro-rata payments to her creditors ought to keep the wolf from the door on a temporary basis.

Your wife will be linked to you for credit searching purposes, but there is really no way round this.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[nw_]

Thanks for the replies guys. So is it likely that the secured lender will block the house sale unless the outstanding balance is repaid in full to them first?

Sorry for being naive but all this is new to me.

[mikebdomain]

It will depend if it is a charge or restriction – IF it is a charge the acting solicitor will not release funds to clear your existing mortgage, unless there is enough capital to pay off all the secured charges.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[nw_]

Thanks again for the reply.

If my separated wife goes down the bankruptcy route and then moves back in with me, will the receiver then ask me to sell my house even though my mortgage is in my name only or will only her house be sold? Also, would any of my other assets be scrutinised and forced to be sold by the receiver. As I said earlier, none of the debts are in my name.

[mikebdomain]

As far as your property is concerned:

Unless she has contributed to your mortgage, or has any other beneficial interest in your property - unlikely.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Soulgrowth]

Your wife is a lucky lady to have such an understanding ex-husband to bail her out. I wish I could find one of those! [:)]

Debbie

www.babynamings.co.uk

www.soulgrowth.co.uk

[nw_]

No, she has not contributed to the mortgage but does the fact that we are still legally married mean that she has a beneficial interest in my property?

[MelanieGiles]

Not necessarily, but as with all important transactions do take proper legal advice with regard to your position.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp