Ask the Experts

Debt problems

Date: 25 Sep 2006 Answered by: Mark Keenan, Editor, Divorce-Online
Q.	Hi, I'm about to move in with my boyfriend, who is divorced with two children. He has a successful career with interests in several companies, but the divorce left him crippled financially and each month sends him further into debt. His ex-wife has the family home and doesn't work and receives more money than I take home each month on a full time salary! She is constantly pushing for more money and is getting really quite nasty. Can she claim money from my salary when I move in with my partner and is there any way we can protect this? Your help is appreciated! K
A.	Katie No your salary and assets have nothing to do with her and cannot be taken into account at all.
Date: 21 Jul 2003 Answered by: Mark Keenan, Editor, Divorce-Online
Q.	I left my husband 2 years ago. My legal adviser and my husband solicitor came to an agreement in December 2002, saying that he owed me £7,500 which a loan taken out in my sole name, due to his bad credit history, this paid for some of the wedding, but most of the loan paid for a car, that my husband drove (I don’t drive) and he was going to repay the car fees. His solicitor said that I would get the proceeds from the sale of the house and he would then pay £5,000 to the loan, that way he would have no dealings with me. My legal advisor confirmed this in January 2003, when I also asked again for a divorce. I received a letter in July 2003 saying that he will not consent to a divorce until the money is sorted out; they also said that they have no evidence of the money owed to me. My legal adviser sent his solicitor all the paper work listing all the money owed which his solicitor does have on record. My husband has now gone back on his word and says that as the loan is in my sole name he will not pay anything towards it. My legal adviser is not a divorce lawyer so is unsure about what action I can use to get a divorced. My husband has recently had a child with someone else, so is there any way that I can start divorce proceedings without his consent. Any help in this matter would be appreciated.
A.	Laura You can divorce him on the grounds of his continuing unreasonable behaviour as evidenced by his failure to abide by agreements freely made with the benefit of legal advice. You can then once the divorce is underway ask the court for financial relief, including that he pay the loan until it is finished in accordance with your agreement reached. As the agreement was reached with the benefit of legal advice my view is the court will uphold it. He would then have to pay the loan or face financial sanctions and he will have to pay the costs of the divorce and financial application. You can do the divorce part yourself, but will need to hire a Solicitor to undertake the financial application. We can deal with the divorce part for £85.00 + court fees
Date: 27 Feb 2003 Answered by: Hilary Bowles, Solicitor, Fullagarbrooks
Q.	i am currently going through a settlement of assets however my wife took out a 8,000 pound loan in her name although we where together at the time just a few months before we split all the money that was spent has gone to house bedrooms decorating ect i have left with no more than the clothes on my back do i have pay for half this loan from any assets monies i recieve although i am not going to benifit from this loan financially it is not in joint names i have since seperating not received any thing nor likley too from this 8,000 pound debt (loan)
A.	Phillip Holden The document that is prepared for financial settlements and Court proceedings (Form E) does on the face of it make it look as if loans in respect of parties names does come out of the split of the joint assets. You do not say whether or not you have children or whether the house was in a poor state etc and you are likely to benefit from the improvements. Given that the money was not exactly squandered, (although that may be arguable), I think it is likely that it will be perhaps taken into account in the financial settlement. It will really depend on the facts of the matter and also other related circumstances, like the amount of money available, whether there are children, the required amount for re-housing etc. If you have not already done so, I would recommend that you seek independent legal advice regarding this matter.
Date: 28 Aug 2001 Answered by: Katie Went, Solicitor, Bower & Bailey
Q.	Dear Sir My husband left me a year ago and we are currently going through a divorce. My question concerns the marital home which I live in on my own. He is now living elsewhere. My husband is self employed and I know that he has raised capital for his company based using the marital home. If he goes bankrupt where do i stand. Would I loose the house and all finacial claims. would I have to sue him seperately to recover the costs involved. I bought the marital home and have always paid the mortgage but his name is jointly on the mortgage. Thank you for your help
A.	You could be affected by his bankruptcy. You need to have the finances dealt with either by agreement or the Court if this is not possible to protect your housing from his financial dealings. Certainly your share of the house should be protected from the bankruptcy and he would not have been able to secure finance for the business on it without you agreeing. Without knowing all the facts it is difficult for me to advise. In view of the situation I think you should see a solicitor. It would seem to me however prudent to lodge an application for ancillary relief quickly to get the matter dealt with.
Date: 5 May 2001 Answered by: Mark Keenan, Editor, Divorce-Online
Q.	My husband has recently decided that he doesn't love me any more and wants out. We have been married for nine years. So far it has been amicable and he has willingly signed over the mortgage to me. I have kept up payments on our joint loan and he has taken on the credit card debt. However, he has always been a bit profligate with money and since he has left, he has been spending money like water. He is temporarily living with his brother and so his mail is still being delivered to my house. I am rather worried about this as I am concerned that this means he could damage the credit rating on this address. As we are still married, is it possible that I could be liable for any debts that he runs up before we get divorced, and if so, are there any temporary measures I could take to prevent this happening? There are no children, and I earn about twice the amount of my husband. Thanks AnneO
A.	You will be jointly and severally liable for any joint debts, but not for any in his sole name. I suggest you make him change his address for these bills to his brothers to avoid a credit rating problem, which could arise if he continues to miss payments.
Date: 27 Mar 2001 Answered by: Richard Cowen, Debt Councellor
Q.	My wife and I divorced in Jan 2000. My wife sold the house, as agreed, and repaid the mortgage and half of the only unsecured loan that we jointly held. I have responsibility for paying the installments for my half of the loan. However, I wish now to formally take over the loan as it is still in joint names, and my ex may face difficulties in obtaining a new mortgage when she buys her new home, due to her lowish income. How likely is it that the lender would take in to account the fact that she has already paid off half the loan in deciding whether I can take it over? I would appreciate your input as I feel pretty guilty about not having sorted this out earlier. By the way, the lender is a main-stream, high street lender.
A.	Your joint unsecured loan is quite typical of these types of agreement where both parties are jointly and severally liable. The fact that your ex-wife has repaid what you have agreed is her half, does not alter the legal position that she is still responsible with you for the remaining balance. As you suggest, this liability may affect her application for a mortgage and it would be ideal if you could take sole responsibility for the loan. It is more likely the loan company will take into account your ability to meet the payments than being influenced by the fact your ex-wife has paid half of the balance. If the loan company is unwilling to remove your ex-wife's name, you could always consider arranging a loan elsewhere. However, it would be sensible to consider the interest rates on the new loan and any settlement penalties on the current loan before taking this course of action.
Date: 3 Feb 2001 Answered by: Katie Went, Solicitor, Bower & Bailey
Q.	My husband of one year has left me (and my chldren) for the second time in three months. I will be seeking a divorce on the grounds of unreasonable behaviour - there is plenty of this apart from his yo-yoing. In the meantime, I am aware that he is almost £10,000 in debt. All of these debts were incurred, in his name, before I even met him. Despite my attempts to help him pay them off, he has let them slide. I have a house full of furniture and a car (although we are both full time students at University), all of which I had when we met or paid for myself. I have just had a call from someone looking to take legal action against my husband - can I be held liable for his debts? I would appreciate any advice - having supported him financially for over a year and nursing him during and after brain surgery, I would be devastated to lose the home I have built up as well.
A.	It is not clear from the information given whether you own the property in which you live. If not, and there are no real assets of the marriage, ie, savings, policies or other realisable assets then it is unlikely that your husband can pursue you for the debts in his sole name. The Court has no jurisdiction to make a person who is not party to a debt pay the same. If the house is in joint names then judgement debts can be secured against it. However in Court proceedings your half share or whatever your share is determined as being cannot be used to meet these claims.
Date: 2 Feb 2001 Answered by: Richard Cowen, Debt Councellor
Q.	The problem is my husband left over 8 years ago; we have 2 children 19 & 11. He left for another woman and now has another 2 children; we have not gone through a formal divorce as yet. Prior to my ex. Leaving our house was repossessed. We had double-glazing installed as a secured loan; they have placed an attachment to earnings on my salary, as he does not have a fixed abode, living with this woman in a council house. But they state that he does not live there, and that he does not have a job. Although he works for cash in hand (I know the company). Recently (the within the last 2 weeks) the mortgage company has contacted me after 6 years of no communications, to state I owe £23,000. My salary currently put my some £50 above the minimum wage they state they cannot find my ex. We know where he lives as he on occasion gives our youngest some money. Please help I cannot afford to pay this debt and feel that I have all the responsibility but he does not. What do, or should I do?
A.	There appear to be 2 issues at hand both related to loans secured on your former property. If the secured loan and mortgage were both joint liabilities, then the lenders can choose to pursue either OR both of you for repayment for the full amount outstanding entirely at their discretion. Obviously, any information you provide to the lenders about your separated husband's whereabouts will help them obtain payment from him but they are not obliged to act on the information even though it is usually in their interests to do so. You say there is an attachment of earnings in place in respect of the double glazing loan. The court will allow you to make an application to have the amount of the court order reduced if the attachment is causing undue financial hardship. You would need to apply on a court form N244 and attach a statement of your income and expenditure. You may also have to pay a fee of £25 unless you are in receipt of a means-tested benefit such as Income Support or Working Families Tax Credit. In respect of the mortgage shortfall of £23,000, several complicated issues come into play. Firstly some legal arguments suggest mortgage companies have only 6 years to pursue these debts unless there has been any acknowledgement of the debt in the meantime. The mortgage lenders argue they have 12 years but in any event most of the big mortgage lenders have voluntarily agreed to NOT START pursuing debts more than 6 years after the date of sale of the property. This is a complicated area of advice and I would recommend making an appointment with a Citizens Advice Bureau or solicitor BEFORE entering into any further communication with the mortgage lender.
Date: 1 Sep 2000 Answered by: Richard Cowen, Debt Councellor
Q.	What is the best thing to do if you have a lot of unsecured debt. Is it wise to take a secured loan over a longer period to reduce the payments?
A.	This is a question I am asked frequently and the answer very much depends on the individual circumstances. The advantages of a secured loan are usually reduced monthly payments, a reduced interest rate and the convenience of one monthly payment. The disadvantages are you will usually pay more interest over a longer period, your home will be at risk if you do not keep up with the repayments and once the unsecured debts are repaid it is all too easy to start borrowing again. In general you should be only considering this approach if you are ABSOLUTELY SURE of your ability now and in the future to meet the repayments. If you cannot afford your unsecured creditor payments, it is sometimes possible to negotiate lower payments and this is possibly the safer option. However, this may also affect your future credit rating.
Date: 21 Aug 2000 Answered by: Richard Cowen, Debt Councellor
Q.	I am in a great deal of debt and think the only way out will be to go bankrupt. How much is it and what happens.
A.	Bankruptcy is a complex area of law and without more details I can only give you an outline answer. You say you are in a considerable amount of debt which I assume means several thousand pounds. You have to pay legal costs of £370 to go bankrupt. If you are in receipt of some means-tested benefits this can be reduced to £250. Some areas a potential bankrupt needs to consider are:- Is it the most appropriate option for you? Will it have any effect on your housing situation? What will be the effect on your assets? Will it have any effect on your job? Will bankruptcy deal with all of your debts? The process is fairly straightforward once the decision has been made and involves some form filling, an appearance in court and an interview with a bankruptcy trustee. In complex cases, further interviews may be necessary. The main benefit of course is that your liability for most debts will be discharged after either 2 or 3 years depending on how much you owe. I cannot stress too much the need to get detailed advice before proceeding with a bankruptcy.
Date: 20 Aug 2000 Answered by: Richard Cowen, Debt Councellor
Q.	I am about to divorce my Husband amicably. However we have UNSECURED debts of around £20,OOO including car loans, HP and credit cards. I have agreed to take on some and so has he. Will the banks etc allow us to split these debts or will they require them to remain joint?
A.	It is good to hear you have decided to divorce amicably and each take on responsibilty for particular debts. However, lenders will normally want to leave the legal liability unaltered and therefore you will normally remain jointly and severally liable for joint debts. This is usually because the lender will have taken both of your incomes into account when deciding to lend the money and it is not in their interests to remove one party from the agreement. You may still want to ask the lender if they will agree - sometimes they do! If you cannot obtain the lender's agreement you will need to be aware for example that if your partner ceases payments you can be held responsible for the remainder of the debt and vice-versa.
Date: 18 Jul 2000 Answered by: Katie Went, Solicitor, Bower & Bailey
Q.	I have been separated from my husband since the end of Feb this year. It is now an amicable split but it has been decided that we want to get divorced on grounds of unreconsilable differences ie adultery. Firstly he wants to take this approach for me which I have no problem with but him getting around to filing this could be years , i would use the unresonable behaviour option for him which is a legitimate option but he said that he would contest it and just be difficult. So my first question is which is the best option to go for, that i can get things moving with. Secondly he took out a loan that had my name on it as well as his in December prior to us parting. I have called the bank they said my name cannot be removed from the loan unless a: He pays the loan off or b: he tops up the loan and then it would be classed as another loan. Obviously I do not want to be landed with this debt should he decide not to pay but as still being legally his wife it concerns me greatly. i would appreciate any advice as to how my name could be removed or I would be held not liable. Thanks in anticipation.
A.	There is only one ground for divorce 'irretrievable breakdown of the marriage' provable in one of five ways, one of those is adultery. You are right when you say that you cannot petition based upon your own adultery. There is no best option. You either persuade him to petition, by perhaps agreeing to meet the Court costs or your petition based upon his unreasonable behaviour. If will not agree to this there are ways of proceeding. If he does nothing, i.e. does not return the acknowledgement to the Court you can still proceed with the divorce by proving personal service. In my experience people are unlikely to file a defence due to the costs and hassle involved, so it is likely that you will be able to proceed on this basis but much will depend on your Husband's intentions. Sofaras the loan is concerned your name cannot be removed unless your Husband consents. The Court can also not order a person to pay a debt. Unless there are other assets of the marriage to use against this debt it will have to continue. The Court would also consider what the debt was used for. If it was to benefit the 'marriage' then there would be an argument for joint responsibility. In respect of the joint loan it does not make a difference whether you are married or not, because it is in joint names you are jointly and severally responsible.
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