Hi Davoricus

Could you expand on the position with the property. From your post, it appears that there is a jointly owned property with your sister and her ex. The property is shared ownership and they own 25% over which there is a mortgage.

From the above, if your sister hands the keys back and the property is repossessed and sold then she would be liable, in full, for any shortfall. Her only other option would be to try and sell the property and hopefully achieve enough to pay off the mortgage in full.

Mark

Hi Davoricus,

Your sister will be financially linked to her ex because of the joint mortgage and any other joint financial products that they have had together in the past. I would suggest she looks into Financially Disassociating herself from him. She should look on Experian, Equifax and Call Credit to see what links she has and then take steps to remove the links that they have if possible.

As Mark said, with regards to the property she can either sell this and hope that it's sufficient to clear the outstanding balance which would leave her debt free or if she allows it to be repossessed then any shortfall she would be liable for. She could then consider a Trust Deed herself, she could agree to a repayment plan with the mortgage company direct, enter into a Debt Arrangement Scheme or even consider Sequestration.

You said that they were at the point of considering selling the property. From this you should be able to gauge if it's possible to sell it and clear the outstanding sums. If it's not likely then it may have to be repossessed.

Another option could be renting the property out until such times as it had increased in value and it could then be sold to clear the mortgage. She would however need the approval of the mortgage company and local authority to do this.

The other thing to bear in mind is that the Trustee will require to agree any sale as he, in effect, will take the place of your sister's ex. This is not normally a problem if the sale is sufficient to clear the mortgage in full.

Mark

Has your sister spoken to whoever owns the 75% share? I'm guessing it will be a housing association maybe? There may be an option to sell the 25% share back to them.

Thank you for you responses. To answer your questions: Yes the property is jointly owned and at a 25% share with a local housing association. They do not want to buy the 25% back, but are happy for it to be sold (25% or 100%) or rented, given the circumstances. The mortgage in question is for this property.

With regards to the property. There is very little equity in the property as they just bought it 3 years ago. However it should be enough to cover the sale of the property, which I think would go quickly due to the low 25% price tag and interest in the area. However I was under the impression that you could not include a mortgage in the trust deed. Is this not the case?

The mortgage lender has a security and therefore doesn't need to claim in the trust deed unless there is likely to be a shortfall.

If your sister wants to sell then I don't see any reason why she should not be able to do so, though her husband's trustee will need to ok any sale before it can complete so she would be wise to speak to them first and make sure they are happy with any sale arrangements.

By the sounds of it Davoricus the property could be sold, the mortgage cleared off in full and you sister would not need to consider a Trust Deed as she wouldn't have any debt. Ideal scenario Or am i missing something... it's a Friday and been a long week of evening appointments.

Thank you for your help. My initial thoughts were that a sale of the property (though incurring significant costs in the short term) would be best to save her credit rating and sanity.

So because he has gone for a trust deed he relinquishes control of the property over to the trustee? So if the property is sold does the trustee claim a share? If so I presume that this would be after all costs to my sister for the sale of the property have been returned. ie. Estate agency/solicitor fees and any rent and mortgage payments made in the interim.

Those are the kind of details that would need to be agreed between them, Davoricus, but yes normally the various expenses would be deducted from the sale proceeds, the mortgage company would be repaid and then if there were any spare funds these would be split equally between your sister and the trustee.

Your sister should certainly try and keep things under her control in connection with the property. In an ideal world there would be a sale sufficient to repay all securities and costs etc. The other option is to hand the keys back and this could result in a large shortfall which your sister would be liable for.

Mark

Thanks for your time everyone, Very helpful. My sister will try to sell the property as cheaply as possible so as to cover all expenses. She is just very confused at her Ex's decision to get a trust deed with so little debt, given the serious repercussions with regards to your credit rating etc. I will advise her to contact experian etc to see if she needs to disassociate herself further.

Thanks Again,
David

Hi David

Keeping control is the key here. If she takes to deal with the sale of the property and this achieves a suitable selling price, then this will certainly go along way to disassociating her from her ex.

Mark