Q: My wife and I have been separated for more than 20 years. We never formally entered into a separation agreement and we have always gotten on. When we first got married, we took out a very large mortgage. The funds from the mortgage were used to fund my wife’s business investments, which came to nothing. I took over the running of the family home when she left, although both our names remain on the property. The property has always been in negative equity. I had reached an agreement with the bank to make interest only payments for a period, but I have been able to pay very little off the total sum owed. The bank is now seeking to sell the family home along with any other assets to write off the debt. I have poured blood, sweat, and tears into keeping the home over the last 20 years and do not want to give it up now. What can I do?
Dear Reader,
Your options would depend on the precisely how the property was held, whether the same was owned by you or your wife prior to the marriage, and whether the property could now or had previously be classed as a ‘family home’ within the meaning of the Family Home Protection Act.
In general, once you and your wife have been living separately, you would be entitled to either a judicial separation or a divorce. In granting such a separation or divorce, there are a range of options open to the courts with regard to the division of property.
The court could order that property be sold, transferred to one party or another, etc. However, the court cannot write off or reduce the total indebtedness to the bank and would be unable to transfer the property to you solely if there remains any mortgage over the property.
You should consult with your solicitor and financial advisor to ascertain whether you or your wife have sufficient assets or monies to retain the family home. It may be the case that the bank would be willing to take a write down of some or all of the unsecured debt but might be less willing to do so where there is a valuable asset such as the family home to partially satisfy any sums due.
I would strongly advise you to positively engage with the bank and perhaps meet them in relation to the matter. I would strongly advise too not to put your head in the sand as the bank will most certainly move forward then. Engaging with them is the best option.
If your wife is in substantial difficulty with regard to other borrowings, she might need to consider entering into an insolvency plan. Depending on your own financial circumstances, an insolvency plan may also be required for you.
You would be well advised to immediately consult your own solicitor with regard to this matter. This should be done at the earliest possible juncture to ensure that any and all appropriate steps, including emergency steps, can be taken by your solicitor to protect your interest.
