Any offer of repayment which would take longer than 10 years will require an I&E to be completed before it can be accepted.

You will only be expected to pay 50% of the overpayment, not the full amount. Your ex will be getting chased for the other half. The best thing to do is call the number on the letter. The 12 month time frame can be ignored. The wording of the letter is due to change to remove that part. Explain your situation, and your current financial position. If you offer £5 a week it will more than likely be accepted - unless you get an over zealous advisor, who tries to negotiate you up. Don't let yourself be bullied into paying anything more than you can afford. Stick to what is comfortable for you. And don't worry about the call. It'll be a breeze.

Is there no way that you can show you weren't living there? Did you change your address with anyone, have letters sent to a different address than your wife's? You can dispute the overpayment if you have the evidence to back it up. You'd need to fill in a TC846 form - available from the HMRC website - and return it as quickly as possible, along with any additional documentation to support your case. The suggestion to talk to the CAB is a good one too. But you'll need to be quick about that. It sounds like the recovery process has moved on quite a bit, judging by what's on the letter she received. What phone number was on the letter? Might be worthwhile calling, and explaining the situation. Ask for some time to talk to CAB. Explain your ex's mental state. Advisors will sometimes give you this, if you convince them that you will call back within a couple of weeks. But it's better to talk to them about it now, rather than putting it off. It shows that you do want to deal with the matter. If possible, setup an arrangement to start paying some money back, even if it's you who makes the payments for now. There's no set amount, or set length of time to pay it back within. The letters usually talking about a 12 month time frame, but it can go longer than that. Setting something up stops the legal action. And it won't prejudice any dispute you might make. If it's not possible to pay anything back then tell them that. She will be asked about income and expenditure, and, at some point, may need to provide documents to back up what she says. But again, it shows willingness to communicate with HMRC. And they can't take money from her that she doesn't have.