Author Topic: Help with Insolvency related to Divorce!!!  (Read 2247 times)


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Help with Insolvency related to Divorce!!!
« on: Nov 02, 2009, 10:23:10 AM »

I'd be very grateful for your thoughts on the following insolvency/matrimonial matter, I’ll try to be as specific as possible so you have a good idea of the situation in order to provide advice:

My husband (of 4 years, no children) and I are in the process of getting a divorce (I am the Petitioner) on the grounds of adultery. I have received the Affidavit to sign and return in order to apply for Decree Nisi. The only major problem is in relation to obtaining a clean break in our finances as we have a mortgage which has a £358K and the property is probably worth anything between £30K and £5k below that. We are on a Fixed Rate mortgage until 2012 and the penalty charge for cancellation is roughly £17K. The monthly payments on the mortgage are £1771. My husband is self-employed and his business is on the verge of going under, he will also personally be filing for bankruptcy in the very near future and therefore there he has no money to speak of and I can't afford the monthly payments on my own as well as all the bills etc. I also couldn’t have the mortgage transferred in to my sole name as my salary is only £48K a year and to be honest I also have no interest in retaining the house in my own name even if it was possible as I don’t want to be tied in for a further 2 years with all the financial burdens placed solely on me. We hold the property as joint tenants and someone has suggested we sever the tenancy so we become tenants in common so that it is clear that his liability is against his interest only, not mine, but I’m not sure if this is even significant as my understanding is that this is only ever relevant in the event of one of us dying while holding the mortgage.

To complicate things further my husband owes me roughly £40K (which is made up of some credit card debt and a loan which I took out in my name for him as well as cash that I have lent to him over our 7 year relationship which has never been repaid!) which was going to be dealt with by way of a Consent Order setting out monthly payments he would pay to me for the next 3 years, it was to be stamped by the Court once Decree Nisi was pronounced, but that was before he  decided to become insolvent and so I’m now not sure where I stand now in terms of the mortgage and these monies or what my options are…. My divorce solicitor says she can’t advise me because she has no experience with incol

I have contacted the mortgage company (Mortgage Express (underwritten by Bradley & Bingley, i.e. the Govt) to enquire about handing the keys back but before I do something as drastic as this I just wanted some independent advice and I’m not sure where to start.

I do have some credit card debt of my own (roughly £10K) and the house-hold bills are starting to pile up as I am trying to cover the mortgage payments on my own at the moment but I’m not able to stretch to the bills. So I’m wondering, do I try to go down the route of handing the keys back on the property (and trying to get Mortgage Express to agree to not pursue me/us for any shortfall in the sale price (I assume at auction it will go for even less than if it was sold privately) as well as the early repayment charge (not sure how likely this is); OR to put the house on the market anyway and see what we get (and again hope that the repayment charge is waived!!); OR finally do I just file for bankruptcy myself simply so I can draw a line under this entirely.

After the divorce I am planning on spending some time outside of the country as my family is from Africa but at some point I’m sure I’ll need to return to the UK so will undoubtedly be effected by a bankruptcy at some point but I just don’t know what the lesser of two evils is.

Any advice you’re able to give would be greatly appreciated.

Many thanks.