I'm married...mortgage is not in my name...how will his debt affect me?

flix1

Hi there,
He bought the house during the boom. We are in massive debt, just got married, house is in his name. His income has dropped dramatically compared to when he bought and he can no longer afford the house on his house. Realistcally I can contribute, and have been but for the last year on an interest only basis, which is due to end next month. We are happy enought to walk away from the debt if we cant get a write off. Can the banks force me to pay the debt as I am now his wife and have my own income...which I don't want to spend pumping into a house that will never be ours while we live hand to mouth. Ideas...advice welcome!

ABajaninCork

I'm no expert, but would assume that the debt will be regarded as joint now you're married.

Have you spoken to Citizen's Advice to see what they say?

Padraig Mor

if the mortgage is in his name.......it's his debt AFAIK, not yours. "Walking away" from the debt is perhaps not as easy as is often thought though.......

flix1

I've spoke to MABS and they reckoned it was his debt and had nothing to do with me. They were effectively telling us to do this on our own as they deal with couples who are less able to manage their debt than we are! They meant it in a nice way, but were clearly shocked that we had done our homework, I thought they would be of more help!

flix1

Whats AFAIK???

hillbloom

flix 1 it means "as far as know"

smcgiff

As far as I know AFAIK is an acronym.

OP,

Have you considered restructuring over a longer period of time or going interest only for a while.

You cannot walk away from a debt in Ireland by handing back the keys. There are bankruptcy possiblilites.

hillbloom

Flix1 I left out a word. It means " As far as I know "

Gavlor

Debt is in his name and the deeds of the property which are used as security are in his name. If his house is in negative equity then the bank may well turn the balance due after sale into an unsecured term loan, albeit at at mortgagege rates but over a ten year term. If this is the case then he should meet the bank and come up with a repayment plan on existing mortgage that will enable you both stay in the house and maintain ownership. People need to start looking longer term when assessing their debt to income ratio. The hope would be that over next 15/20 years inflation will reduce the debt to a manageable amount (think of how much you parents paid for their house, would have been a mountain of money at the time)

chris85

flix1 wrote: »

Whats AFAIK???

As far as I know. Many little things like that go on around here. You will also get BTW (by the way). IIRC is if i remember correctly.

You are not liable for the debt flix1. Your husband is and he will remain liable for the debt. There are the odd case where write offs are agreed but definitely not a simple solution and would not be banking on your husband being able to walk away from the debt.

See if the bank can extend the interest only period further. They will work with you as best they can to manage the mortgage. They dont want to be left with houses which arent selling at moment.

flix1

We have been interest only for nearly 1.5 years now and the amount we owe just keeps getting bigger...we need a long term solution to this problem, not holding solutions for yet another 6 or 12 months.

flix1

I just want to check, are you saying...sell the house, and then come up with a plan to repay the remainder of the debt? Why would we do that? we wouldn't be living in the house and the debt would strangle us? I'm not sure I see how this would work for us?

chris85

flix1 wrote: »

We have been interest only for nearly 1.5 years now and the amount we owe just keeps getting bigger...we need a long term solution to this problem, not holding solutions for yet another 6 or 12 months.

is it an option to sell? I will presume their is negative equity present on it? If not sell it now if you want and clear the mortage.

flix1

We bought the house for €345....I will never know how the hell he got this amount! and now the exact same house beside us (which has been repossed by the bank) is for sale for €155 and has been for sale for nearly 18 months with no sign of it budging! So yes massive negative equity.

Gavlor

Definitley do not sell. The point i was making is that you aren't going to get a mortgage write down, particularly on a debt that has been paid to date. The only option for you in my opinion is to discuss a repayment schedule with the bank that suits you both and will enable you to live in the house long term. By the way, the bank can't come after you personally for any outstanding debt but did you not take a vow with your husband?? My advice is talk to the bank, make them a repayment offer that is affordable and do not consider selling the property. End result will be that you will be paying the mortgage over a longer term and by that stage inflation will have reduced the debt and repayment, relatively speaking

flix1

Thanks so much for your advice. By the way we are in this together! this isn't some kinda plan I'm hatching on my own. We agree that his credit rating is in a bad way and that my and all our savings (in my name) is a good way. We don't want to ruin our credit line by putting me on the deeds. We just want to be able to live as well as repay the mortgage, and currently our joint incomes dont allow us to do that. I know our situation isn't unique. I'm just trying to figure out the next steps.

Kennie1

Perhaps you should research the new "Personal Insolvency Bill" which may allow for the debt to be wrote down by your husbands bank. It is supposed to be in acted before the end of this year.

RoboRat

Very similar situation to myself and my wife - I bought a house 7 years ago before I met my wife. I bought a project which I was happy to work on myself so its has not gone as much into negative equity (bought for 250k, worth about 150k now). As far as I know, if you are married then you are both liable for the debt but this could be argued. Best to keep it all in his name so at least you have a chance to fight it but best to talk to a professional and see where you stand.

Have you considered moving out, renting the house and renting something cheaper? That is what we have done and it seems to be a viable solution. I wouldn't go down the interest only as that is not sustainable and only benefits the bank as you will never eat into the actual loan amount.

Gingernuts31

RoboRat wrote: »

Very similar situation to myself and my wife - I bought a house 7 years ago before I met my wife. I bought a project which I was happy to work on myself so its has not gone as much into negative equity (bought for 250k, worth about 150k now). As far as I know, if you are married then you are both liable for the debt but this could be argued. Best to keep it all in his name so at least you have a chance to fight it but best to talk to a professional and see where you stand.

Have you considered moving out, renting the house and renting something cheaper? That is what we have done and it seems to be a viable solution. I wouldn't go down the interest only as that is not sustainable and only benefits the bank as you will never eat into the actual loan amount.

I doubt she is liable for the debt as nothing is in her name. Just because they are married it doesn't mean she automatically inherits the debt. I agree with renting it out but be careful. Your mortgage contract is not a buy to let contract it is a private residence meaning its your home not a money maker as it will be seen as if you rent it out regardles of why you are doing it. If you are caught it can land you in serious trouble. I'm in a similar sitution myself and the wife suggested renting it out but all it takes it for the new tenatns to claim rent allowance from Revenue and they see see your are getting TRS but yet a different person is looking for allowance to live in the same house, they wil put 2 and 2 together so be very careful as I said.

hwfs.ie

flix1 wrote: »

We have been interest only for nearly 1.5 years now and the amount we owe just keeps getting bigger...we need a long term solution to this problem, not holding solutions for yet another 6 or 12 months.

The debt should not be increasing if you continue to service the interest on the mortgage, it should be remaining the same.

Lots of people are in a similar position and if you can continue to service interest and stay in the house surely it is better than having the house sold and remaining debt converted into a personal loan while also paying rent.

RoboRat

I doubt she is liable for the debt as nothing is in her name. Just because they are married it doesn't mean she automatically inherits the debt.

I agree but its not as simple as that. As far as I know assets and liabilities are seen as joint assets and liabilities when you get married, I may be wrong but its worth talking to a professional.

I agree with renting it out but be careful. Your mortgage contract is not a buy to let contract it is a private residence meaning its your home not a money maker as it will be seen as if you rent it out regardles of why you are doing it.

Mortgage contract is not the issue, your contract is with the bank and they don't give a hoot as long as they are getting their repayments. You are right that you may be liable for tax though and you could possibly lose your TRS. Basically, if the money you are getting in rent is greater than 75% of the interest you pay, you are liable for tax on anything you earn that is over that 75% as far as I know (I may be wrong) - ie, if the mortgage is 1200 and 1000 of that is interest, if you are getting 750 of less in rent, you are not liable for tax. You can also offset any work you do/done on the house against the tax due... its confusing as hell so worth talking to a pro.

All it takes it for the new tenatns to claim rent allowance from Revenue and they see see your are getting TRS but yet a different person is looking for allowance to live in the same house, they wil put 2 and 2 together so be very careful as I said.

I registered with the PTRB and everything is above board as far as I am concerned. This is my sole property and I am renting it out because my situation has changed and I had to move. Due to the absolute mess the government made of the economy, I cannot sell my house so therefore I am left with only one option, rent it out as living in it was no longer an option. I am not making money out of it as the cost of my mortgage far exceeds what I am getting in for rent so why should I have to pay additional tax. I am probably technically liable to pay tax but if someone comes after me (and God help them if they do), I will argue my case then. I am not looking for some loophole to try and scam revenue... I am just stuck in a predicament because of the ineptitude of the government and I have got off my arse and done something about it!

To be honest, revenue are not looking at people who are trying to sort themselves out and not dodge tax - these are the words of a sitting TD!

CamperMan

I thought being married was about sharing the responsibilities...