Outstanding debt by my new partner and her ex - £40K

[Bignuts121]

Guy's,

 

My new partner and her ex fell Into financial trouble after a job loss and subsequently their house was repossessed and sold with o/s debt. She has now had letters and set-up a payment plan of what she can afford.

 

If I was to offer a % of this debt would it remove her liability for the remaining debt ??

 

We are wanting this nightmare to end and need to get on with our new life together without looking over our shoulder

 

HELP PLS.

[citizenB]

Do you know if the ex has also set up a plan or has he dumped it all in your partner's lap ?

 

I will try and find someone who can help

[Lea_HTH]

No, offering a settlement for her 'share' won't work - it would have to be a settlement for the whole. Your partner and her ex are jointly and severally liable for the shortfall, and the mortgagee will take it from whoever is easiest to obtain it from.

 

If you are in a position to offer a settlement figure for the whole, you can do this. If it is accepted and paid, then your partner is free to sue her ex for 50% of that settlement figure.

[Bandit127]

You can word the offer so that it does exactly what you say.... Remove your partners liability for the debt. That way they will go for the remaining amount from the other person.

 

You are more likely to get accepted on those terms than a full and final offer IMO.

 

Go for it - I would hope you should see 50% after negotiation but start lower than that.

[Bandit127]

No, offering a settlement for her 'share' won't work - it would have to be a settlement for the whole. Your partner and her ex are jointly and severally liable for the shortfall, and the mortgagee will take it from whoever is easiest to obtain it from.

 

If you are in a position to offer a settlement figure for the whole, you can do this. If it is accepted and paid, then your partner is free to sue her ex for 50% of that settlement figure.

 

I have seen this done successfully. Rather than settle for the whole, the person settled to absolve their liability. For about 40% IIRC.

[slick132]

You can word the offer so that it does exactly what you say.... Remove your partners liability for the debt. That way they will go for the remaining amount from the other person.

 

You cannot remove a partner's liability - each partner is liable for the whole of any unpaid debt.

 

If a creditor can get money from one party, they will do so with no regard for who owes what part of joint debts.

 

I can't see how or why a creditor would agree to collect only half a debt from one party, and then go after the other party. They have no need to do this.

 

[Lea_HTH]

I have seen this done successfully. Rather than settle for the whole, the person settled to absolve their liability. For about 40% IIRC.

 

Where, when and how exactly? This anecdotal type of statement never holds up in the face of reality, unfortunately.

 

The mortgagee already has a money judgment for the outstanding debt, which, since the house is sold and the shortfall is established, is £40k. You're suggesting to the OP that the mortgagee will happily settle for £10k (50% of the shared liability), yet they have a judgment for the full £40k...they have zero reason to accept 50% of the whole, let alone a mere 25%.

 

The mortgagee can pursue both parties, or one, it makes no difference to them so long as someone pays up.

 

My advice stands; the partner and her ex are jointly and severally liable for the debt, and if the partner pays off 50% then goes on to buy something else, they'll come after her for the remaining 50% (or slap a charge on the new house) - because they almost certainly won't agree to discharge her liability - and particularly in circumstances where they see her offering lump sum payments!

[odetter]

Is bankruptcy not an option?

[Bignuts121]

Do you know if the ex has also set up a plan or has he dumped it all in your partner's lap ?

 

I will try and find someone who can help

 

I have no idea what, if anything is being paid by the other party. My partners plan is very minimal as she rents currently and doesn't earn a mass amount anyway. I'd think that a one off lump sum from me is better than 20yrs of a v.small amount ??

 

Help

[citizenB]

I have no idea what, if anything is being paid by the other party. My partners plan is very minimal as she rents currently and doesn't earn a mass amount anyway. I'd think that a one off lump sum from me is better than 20yrs of a v.small amount ??

 

Help

 

Sadly, as you can see from responses by Slick and Leah, this is a joint debt and it is unlikely they creditor will accept that she is only responsible for half the debt

 

If she were to apply for Bankruptcy, then the creditor would focus on the ex partner for full settlement.

 

As she has entered into a payment plan, I would say she has acknowledged the liability

[sequenci]

 

I can't see how or why a creditor would agree to collect only half a debt from one party, and then go after the other party. They have no need to do this.

 

 

Oh it does happen, and quite often. They'll accept a percentage in full & final settlement of one person's liability. This allows the lender to go after the other party still but not the person that has made the settlement - the lender would be estopped from doing so. I've done scores of these for people.

[citizenB]

Presumably there would have to be a cast iron, in writing, gaurantee that the person would no longer be pursued !

[sequenci]

Presumably there would have to be a cast iron, in writing, gaurantee that the person would no longer be pursued !

 

100% without any doubt. That's a very good point as some people don't follow the right process only for it to really bite them later on down the line.

[odetter]

If your partner has no assets and subject to the usual caveats then going BR could be a more attractive and neater option.

They would be cut loose financially from their previous relationships.

Worth exploring.

[Bignuts121]

If your partner has no assets and subject to the usual caveats then going BR could be a more attractive and neater option.

They would be cut loose financially from their previous relationships.

Worth exploring.

 

How can I find out if both parties are paying ?? Is this easy ?? We've not discussed bankruptcy !! I'd like a 25% - 30% payment to be accepted and then walk if possible

[Bandit127]

Perhaps I should have been more precise in my wording earlier.

 

She is joint and severally liable. When I said earlier 40%, I meant of the whole debt (which she can be held liable for). So I hope i haven't raised expectations of 25%...

 

As for finding out if someone else is paying, she can ask for statements if she is not getting them annually. That will show the payment history.

 

It might be worth phoning National Debtline to explore your options. I didn't recklessly post an anecdote in post #5, but I can't find the link. However, National Debtline will know if that is an option open to you.