Case study Split /Voluntary surrender SFS when spouse is not on mortgage?
- Thread starter Dilemma
- Start date
Brendan Burgess
Founder
- Messages
- 53,717
The lender has offered to reduce your monthly repayments to €538.
How much would it cost you to rent your current house? If you could rent a similar house for a lot less than €538, you should consider handing it back.
If the rent would be more than €538, then you should take it and either a) live in it or b) rent it out at a profit.
If you hand it back, where will your family live? Where did your husband live before you got married? The family home I presume. Is that your best option financially? If that is not an option, where will you live?
The lender cannot "sting" your husband for your debts.
Your options are
1) Accept the deal which will cost you €538 per month
2) Hand back the home and rent elsewhere - which will probably be more expensive
If you agree to a voluntary sale, you will still be liable for the shortfall of €95k. This is a bit academic as you don't have any income to service that debt.
You should offer to sell the home and give them the entire proceeds in exchange for them writing off the shortfall. If they don't agree, tell them that you will be applying for a Personal Insolvency Arrangement or bankruptcy and will need to build up a fund of €3,000 for those costs. So you will be deferring any mortgage repayments until you have that fund built up.
They might come back to you and offer a deal on the shortfall e.g. if you pay €100 per month for 5 years, they will then write off anything remaining.
Brendan
How much would it cost you to rent your current house? If you could rent a similar house for a lot less than €538, you should consider handing it back.
If the rent would be more than €538, then you should take it and either a) live in it or b) rent it out at a profit.
If you hand it back, where will your family live? Where did your husband live before you got married? The family home I presume. Is that your best option financially? If that is not an option, where will you live?
The lender cannot "sting" your husband for your debts.
Your options are
1) Accept the deal which will cost you €538 per month
2) Hand back the home and rent elsewhere - which will probably be more expensive
If you agree to a voluntary sale, you will still be liable for the shortfall of €95k. This is a bit academic as you don't have any income to service that debt.
You should offer to sell the home and give them the entire proceeds in exchange for them writing off the shortfall. If they don't agree, tell them that you will be applying for a Personal Insolvency Arrangement or bankruptcy and will need to build up a fund of €3,000 for those costs. So you will be deferring any mortgage repayments until you have that fund built up.
They might come back to you and offer a deal on the shortfall e.g. if you pay €100 per month for 5 years, they will then write off anything remaining.
Brendan
F
Fin Crusader
Guest
I do not have all the specifics of your case, however you may have an ace up your sleeve when dealing with the bank.
Was the house purchased before you married your spouse, if so he/she has the protection of the Family Home Protection Act 1976~ a spouse who does not own the family home must give prior consent to any disposal of an interest in the family home! including by way of mortgage. The 1976 Act provides that a court may restrict enforcement of a mortgage or sale in certain circumstances.
In essence it means that your spouse has built up an equitable stake in the family home, he/she may not be the legal owner but they are entitled to equitable enjoyment of the property. This is a big problem for your bank and of course they know this when it comes to enforcement.
I would need to ascertain your exact position before I can comment further, but my comments may give you food for thought.
Was the house purchased before you married your spouse, if so he/she has the protection of the Family Home Protection Act 1976~ a spouse who does not own the family home must give prior consent to any disposal of an interest in the family home! including by way of mortgage. The 1976 Act provides that a court may restrict enforcement of a mortgage or sale in certain circumstances.
In essence it means that your spouse has built up an equitable stake in the family home, he/she may not be the legal owner but they are entitled to equitable enjoyment of the property. This is a big problem for your bank and of course they know this when it comes to enforcement.
I would need to ascertain your exact position before I can comment further, but my comments may give you food for thought.