My partner has debt problems

[jill.a]

My partner has debt problems and I believe an IVA would be the best solution for him. Will my mortgage/property ownership be affected if we get married after he goes down this route?

[Andrew Graveson]

Hello jill.a,

Are you the sole owner of your property?

Does your partner occupy the property with you? If so does your partner contribute towards the mortgage or upkeep of the home?

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[JulianSampson]

Hi Jill

Andrew's questions are spot on- the key to your enquiry is whether you are sole owner of the property or not? Your marriage is irrelevant to the question and really only has tax implications.

Be warned- a partner in debt problems can impose those on your property even if you are a sole owner by allowing his creditors to get charging orders against them. Keep on top of these!


Julian Sampson
Solicitor
Wright & Wright LLP
www.wrightandwright.com
See my article in Clean Slate magazine

[jill.a]

Thankyou for your replies.

I am the sole owner of the property and I pay the mortgage, all bills, council tax etc. He is however living there at the moment.
What are charging orders?

Jill

[JulianSampson]

A charging order is a type of charge (loosely a mortgage) registered against your deeds following a CCJ. I have seen (although the Courts do try to prevent this) them registered on a property owned by the poor partner.

Your mortgage is safe (they rely on your house for their security) as long as you maintain your payments. Similarly as your partner has no legal interest in the property he cannot bring its equity to bear on any IVA or even on bankruptcy.

He will be deemed to have contributed to the property (even if you pay the bills!) but his interest should be minimal and he would have to pro actively claim this (or his Trustee might but would easily get shown the door I suspect).

You do have to be careful if you are going to be part of his commitment to the IVA- take advice wisely before doing so. There seem to be plenty of excellent experts on this site.


Julian Sampson
Solicitor
Wright & Wright LLP
www.wrightandwright.com
See my article in Clean Slate magazine

[jill.a]

So, even if my own finances are completely separate from his, I could still get stung myself?

[JulianSampson]

I am probably being a little dramatic but only because, in my position, I usually see what happens when things don't work. I don't mean to worry you unnecessarily.

You are only likely to get stung if you are persuaded to take joint liability for anything. If you retain separate finances then the risk of this is minimal. In contacting the forum you are already showing an awareness (on behalf of your partner) which will no doubt help you both.


Julian Sampson
Solicitor
Wright & Wright LLP
www.wrightandwright.com
See my article in Clean Slate magazine

[Andrew Graveson]

Hello,

I think the point is that if any of your partners creditors were to get a County Court Judgment against him and then seek a Charging Order that you object to it as he does not own the house. If that's clear to the creditor and, if necessary, the Court, I cannot see how there could be a Charging Order.

Be careful that your partner does not pay the mortgage, or for home improvements and the like and you should be fine.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[MelanieGiles]

Julian

Surely the Court CANNOT grant an order against a property where the debtor has not legal title? What caselaw allows 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

[JulianSampson]

I agree it is unlikely (and I did realise with horror that I might be worrying Jill unduly) but there have been circumstances where the creditor has argued that the owner has received a clear benefit from the loan/ credit and that, notwithstanding the home owner is not the contracting party they have found that a charging order would be equitable.

I agree that this seems a tenuous argument at first but when we have explored deeper we have often found that the home owner has (perhaps naively or I dread to say, by fraud of the debtor) invited this route because they believe that with security the creditor is more likely to go away!

Julian Sampson
Solicitor
Wright & Wright LLP
www.wrightandwright.com
See my article in Clean Slate magazine

[MelanieGiles]

Yes - I can see that this might be the case, but how can Land Registry register the Order if there is no joint title? Is this covered in the actual Order made by the Court?

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

[JulianSampson]

absolutely- it is very simple to register- HMLR will not assess the merits if the Court has so ordered

Julian Sampson
Solicitor
Wright & Wright LLP
www.wrightandwright.com
See my article in Clean Slate magazine

[MelanieGiles]

Scary - and something I did not know until today. Thank you very much for the advice, and I will look out for this in the future.

Goes to show how valuable this forum is - for the professionals as well!

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

[johnz]

I wish the same applied AFTER marriage. My husband and I have separate finances (I pay him rent which includes all bills and rates) and I have no legal interest in his property (had to sign something when he took out the mortgage to that effect), and he has nothing to do with my debt and hasn't benefited in any way from it, but I can't get an IVA cos he earns too much money.

Sorry Melanie. I know you did your best, but it still makes me cross that the creditors can make him pay for my mistake just cos we have a marriage certificate. I know I sound like a broken record. I'll shut up now. [:I]

Johnz

[MelanieGiles]

You bang on about this as much as you like Johnz - I agree with you that it is unfair, especially when you consider that under bankruptcy proceedings his income would not be taken into account at all.

But also the OR would not allow you to pay rent to him at a rate higher than the value of your share of the mortgage and shared bills, which you have actually agreed to do, in consideration for previous loans he had made to you.

If it is any consolation, and it probably isn't, this would be the same for life and civil partners as well as married couples.

Glad to see that the wheels of your DMP are starting to turn - you seem so much stronger now than your original posts indicated. In a few weeks this will all have settled down, and you will be able to put debt repayment into a little compartment in your life which is manageable.

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