Should a joint mortgage holder have veto over a Personal Insolvency Arrangement?

[Brendan Burgess]

A couple who have split up are jointly and severally liable for the mortgage.

If he just stops paying, she has to pay "his" share.

If he gets a PIA or goes bankrupt, he excapes his liabilities and she becomes liable for the full mortgage.

Under the circumstances, she is the person worst affected by his PIA.

Should she have a veto?

 

[ronron]

Brendan
sorry but the creditor is the lender, to whom her liabilities have increased. Unless there is an arrangement with him, I do not see how she could be a creditor of his, and therefore entitled to vote?

 

[Brendan Burgess]

HiHi ronron

That is the position as is currently proposed.

But I am wondering if there is a case to allow the joint owner to veto the PIA so that he does not escape his liability? I appreciate that she is not a creditor, but she is very badly affected by it.

 

[ronron]

Brendan,
If he is say, a bankrupt, she will have no defence in law, and will have to face a bank who will want her to purchase his share of the family home (if there are children involved, it is more complicated).

Say that the family court orders him to pay 50% of the value of the family home to her ( a capital award) , then, it is one of the 'excluded items' in the PI Bill, and she can not be crammed down. However, the problem for her is that she is an unsecured creditor, and will have to fight it out with the bank at the creditors meeting. If she became a secured creditor (somehow) or if she gives him a life interest to stay in the house (rendering the bank security as nil) , she will still have to pay the mortgage.
If she had a veto , how would it benefit her? If post banruptcy, he can repay the mortgage, she might veto a PIA, and force bankruptcy so he can give a faster path to be able to pay her. Is her veto relevent? Yes if she can use it to force him to pay her faster, then may be she should have it. The PI Bill should be used to motivate bankrupts to return to the economy faster and with a fresh start.