What are the implications of having a joint mortgage with my ex partner who is entering an IVA ?

[Sarah.63]

Hello, I currently have a joint mortgage with my ex partner, with whom i have been separated from for 2 years. I no longer live at the property, he does, and takes full responsibility of the mortgage payments. We have no joint debts other than the mortgage.
He has recently contracted me as he is entering into an IVA - and he wants me to sign 2 forms, 1 form to stop any sale of the house, and another form which states that if there is any equity in the property in 5 years, that we will remortgage to release it.
I have done a bit of reading up on this and from my understanding there will need to be £5000 worth of equity (his share) for them to ask him to go ahead and remortgage.
My only concern is - will i have to remortgage as well? Or can he attempt to re mortgage in his own name. I have not seen the forms yet, so I have no idea what I'm expected to sign - but I really do not want to be financially tying myself to that property in 5 years time. I would try and force the sale now so I can disassociate myself financially from him but I'm just not in a position to pay the legal costs involved with doing this.

Thank you for any advice

[lifenoteasy]

The 2 of you need to seek legal advice and draw up an agreement stating what can and cannot happen plus who is responsible for the mortgage (you are still jointly liable).

Additionally if you do not have wills get one and state who benefits from the estate (plus who is excluded).

A remortgage is almost unheard of so he will struggle but at the end of the IVA a secured loan may be possible.

You also need to understand the impact on yourself should you wish to get another mortgage at any stage. It would almost be better if he could sign some form of tenancy agreement.

[longslog101]

personally, in addition to what lifenotsoeasy has said.....

1. You are financially associated by the mortgage, so your credit rating/score could in effect drop to zero, that means you very likely wont be able to get any credit, that means things like a new gas/electric contract, mobile phone contract, sky contract, credit card, card loan etc etc - even monthly payment plans on things like car insurance - you might find you no longer qualify for them, or if you do at possibly silly high interest rates. [all that needs to be confirmed by one of the reputable IP firm reps that post here, or the mortgage guys]

This will have a marked affect on you financially over the coming years, likewise if you decided you want a mortgage of your own or to even rent a new property you may fail the credit check (may=probably) and wont be able to rent a new place etc etc. You wont be able to sell the property while he is in the IVA.

This is all worst case scenario, because you are financially associated, so hopefully it demonstrates the requirement to get some legal advice. I would suggest that if he wants you to sign the forms then he pays for your legal advice and then you go and get some from your own solicitor.

Come the end of the IVA if he hasn't repaid all the debt plus fees plus interest and he has more than £5k his share (highly likely in 5 years time of property market rises) in the property he must release that, this is normally on the paperwork via a remortgage, most in an IVA fail re-mortgage credit check (as mentioned above) so, if he is about to take out an IVA, depending on the company he is with the terms may say he is required to instead get a loan to release his share of equity in the house, once he has done this if they agree the IVA will be closed and then the house belongs to the both of you again to do what you want with it.

Of course he might not like the terms of the secured loan at the end and could say no, so instead that could breach the IVA agreement and then they come after the equity in the house by whatever means possible, if his IVA breached he could be made bankrupt and then they come after all his assets, half being the house.

It is a messy solution, and for you it will mean you cant move on with your life for 6+ years in terms of being associated financially, Personally I would not be interested in such a thing, I would be more inclined to say I'm sorry its not for me as it will mess my life up too much, I think we should sell the house, if you do that then you split the equity, disassociate yourself financially and then he can do what he wants going forward perhaps even use his share of the equity to pay off some of his debts, or you buy him out, you could probably be quite fair with him because if he disagrees and you don't sign the forms he is faced with bankruptcy which possibly sells the house anyway. If you can transfer mortgage into your name, you could then rent the house to him. While all this is going on he could use someone like step change to setup a debt management plan (DMP) which is where they write to creditors ask them to freeze interest, setup manageable payments each month for him, then once that is in place and the house sale done or transferred into your name then life goes forward and he can make financial decisions that do not impact you. The transfer into your name would have to be at a sensible price because one of the questions on an IVA application is have you disposed of any assets below market value in the last X years.

I am not qualified to give financial advice but hopefully the above give you an idea of possible hurdles and options.

But signing those forms in effect means you lose control of the property.

[longslog101]

p.s. you do hold all the cards, he cant enter the IVA without your signature, or he could borrow money from someone to buy you out the mortgage and have your name removed from it ?

Just be sure to make sure if you say no, that your signature, or one very similar to it doesn't suddenly appear on the forms, it might almost be worth letting him send the forms through, so you can see which firm it is with so you can explicitly let them know that you wont be agreeing to it and if they receive an application with your signature on it, its not your, also might be worth letting land registry know your new address for communications, once again, legal advice could help here - you might think he wouldn't do that but when people are in bad places they sometimes behave out of character just to make things better in the short term, there are posts on here from people asking what they can do as they have found out their joint house is now part of an IVA and they hadn't signed any paperwork !!

[Sarah.63]

Thank you for all the information, to be honest it's worse than I thought it would be.

I could kick myself for not trying to get off this mortgage sooner, I've asked him in the past to do a transfer of equity but he's refused which left me with the only option of forcing the sale, something that I just dont have the means to afford when I have my own/bills/debt and our 2 young children to look after.

Me and my partner have discussed the fact that I'd be tied in to the mortgage during the IVA agreement which for us is OK because we won't be in the position to get our own mortgage in that time anyway, we both have commitments during that time.

I just want to get through this with minimal damage and I dont really want to make things difficult for him either, although that seems insane because he's making things very difficult for me.
I have no interest in the property, including any equity.

He's basically said this to me about other options :

"Solicitor said its either this, i take you to court, or bankruptcy. She found joint loads and stuff with coop i didn’t even know you took out. They be included in plan. Other 2 options youll have pay. I pay ?140 a month for 5-6 years and clear it all, or i declare bankrupt, they chase you and i keep my shares but lose house..."

I should say that we have no joint loans - whatever they found was a joint bank account application during the time that we were together but wasn't accepted. We have absolutely no joint loans/credit cards, but he seems to be using these tactics to make me to worried to fight this IVA.

If I ask him to sell the house before he enters the IVA - Would that mean that he can't enter into it at all? What if it's on the market for a while?
He said he's had the house valued and there is only £500 equity in the house.

[lifenoteasy]

Even if you do not sign the forms the Insolvency Practitioner retains control.

The RX1 simply registers a note to say that they have an interest.

You are under no obligation to remortgage as you are not in the IVA and anyway any mortgage company would look at the situation and say that they cannot help.

I would say that one way and another control is with you - just make sure about what is/is not possible over the next few years because even if he goes into the IVA that does not mean that he stays in the house going forward.

Personally I would say force the issue and sell the house to get a clean break for both of you.

[Sarah.63]

He is not willing to agree to sell the house... at least not amicably. He's threatening me with taking me to court is I don't agree with all of this, for fraud of thousands? I don't know where he's getting all of this from but if he's claiming any of his debt is mine... Can he do this?

He's basically saying that if I go ahead and try and sell the house, then he will declare himself bankrupt and he is going to take me to court.. and then called me ungrateful as if he is doing me a favour?

[Michael Peoples]

If you refuse to sign his IVA will likely still be approved as he has tried to get the RX1 completed. However I do agree that you should think about legal opinion as there are issues regarding the equity. If he is paying the entire mortgage and upkeep of the property he may well bbe acquiring a larger equitable interest in the property and if his IVA fails and he is made bankrupt a Trustee would take that view.

[longslog101]

Base on the information provided I agree with lifeotsoeasy, don't take anyone else word for it on equity, get your own valuation, look on rightmove etc and see what other houses in the street are selling for. Then establish what equity is in the house and force the sale issue, either he buys you out or you sell it together.

He can still get an IVA with no property, many are in the situation (I was). Don't be bamboozled or take anyone elses word for it.

As much as you don't want to be a pain for him, you have to put yourself and your family first. I think suggesting the sale or the property transferred into one parties name (your or his) once you have independently established what equity there is to buy the other out is the best route, you might not be able to afford this and he may not be able to get a mortgage based on current financial status or single person earnings

Suggesting he uses stepchange to setup a DMP with stepchange in the interim until the transfer/sale is a way to facilitate this. Don't be bullied into signing the paperwork, at some point you both have to become seperate entities, this seems like a good time !in my personal view.

[lifenoteasy]

Sometimes in a divorce you can only keep silent and let whoever is shouting the loudest either do the worse or see if it was just bluff.

His first priority should be the kids anyway and keeping a place that they know and are comfortable with (and I have been through a divorce and yes I am a man and that's my basic line to anyone going through a situation like this).

[longslog101]

pps check your own credit file on noodle to see what associations it shows

[Sarah.63]

Thank you.
The only associations it shows is the mortgage and some joint searches for credit cards etc when we were together.
It shows his searches on my file since we've broken up and most of them are pay day loans.

He turning threatening about it now, claiming I spent thousands on his cards and catalogues without his knowledge - Never have. We used eachothers accounts but never without permission. We weren't married. Those are debts in his own name. How on earth can he try and prove any sort of fraud, is this just scare tactics? I have no doubt he can prove that there will be stuff on his catalogues and cards will show stuff for me or the kids, but AGAIN - it would never have been without his permission or knowledge.

I've just received this from him (I have stopped replying now)

"LOL! you think i knowling let you spend thousands of pounds on my cards? Let you order £2,400 of stuff for you self on my catalogue?

the only reason I’m doing the iva is to keep the house and so my kids mother doesn’t have a conviction for fraud.. so she can work, get a mortgage and insurance etc. Ive been advised by 2 solicitors, 3 financial advisors and i have to sign a legal document saying ive been advised that the other 2 options are better for me but ive chosen to do the iva anyway.

renting/gas/electric/phone contract/car insurance without high interest rates?

This is rubbish, you don’t pay interest on this stuff and if you do its fixed for everyone.

Im not asking you to do me a favour im doing you one.... you are just too stupid to see it"

I am feeling so backed into a corner.

I was okay with just struggling with a mortgage but I cannot be put into a position where I can't get approved to rent, etc. I moved out 2 years ago and spent 2 years chipping away at over half my debt and getting myself into a decent position like I am now, I really made the effort to improve my position financially and now I'm faced with it being ruined. It just doesn't seem very fair.
I will get onto seeing a solicitor as soon as possible.

[Sarah.63]

"Lol, everyone seems to disagree... if you aren’t going to sign them there is no point. The need to be back by Tuesday. Ill cxx my direct debit to mortgage company and save myself some money"

He is now threatening to cancel the direct debit for the mortgage if i dont sign them.

Does his IP have to give me time to read the seek legal advice? Surely they cant demand that I just sign - TBH no one has even made an effort to contact me to explain what they even mean. It's all coming from him.

[lifenoteasy]

An IVA is individual to the person applying for it.

The really good companies will provide a lot of supporting information but as you are not in the IVA their obligation is not to you.

Do you have any idea who the company is that your ex is going with?

[longslog101]

just go and see someone at the citizens advice bureau, as mentioned before when people are in a bad place they act out of character. payday loans seem to be what has caused all of this. His word vs your word on debts in his name, at the end of they day they were in his name and of he has never brought this to your attention before seems like scare tactics.

Get your own advice and keep us updated, you might just have to bite the bullet and force the sale and be done with it, I you have done nothing wrong their is nothing to fear. Get your own valuations (online of property) and go see the CAB.

you're not being unreasonable in my humble opinion,you must protect yourself and your interests and your family interets first also a free half hour with a solicioe ffor another point of view, take everything with you for them to see.

forcing the sale may be the only way or they (cab/solicitors) might advise some other method, I would say if you want me to co wider this you transfer some money to me to pay for legal advice.