Want help/advice with daughter's debts please.

[Never-In-Doubt]

Re: Want help/advice with daughter's debts please.

Nid - quick question... as there is a child involved and to all intents and purposes they are common law husband/wife - is he automatically entitled to 50%? as if they had been married he would not automatically be entitled to that as a child is involved?

Sorry just trying to get my head round it all?

Also Worried Grandma - your daughter is very lucky to have you to support her like this and please do keep getting her to read posts etc so she can also get her own head round the situation.

I also know what Nid is saying about joint debts - as I got chased for all of our joint debt as they only had the former martial home address so my ex husband never got chased at all!!

x

Well he'll have maintenance and it depends what they have together as to what is best to agree to - for instance if it's unlikely he'll hold down a job and pay regular maintenance then it may be best for the daughter to agree not to chase him for it if he walks - similarly, if she was to maybe offer him a straight £10k to sign over the house to her, would he take it?

Lots of ways of going about things, but be honest - if she doesn't make an offer of hard cash he'll never agree to walk away from the house that has equity - why would he?

Thus I was simply thinking of the logical way forward, not necessarily the legal entitlement....

[LooLoo]

Re: Want help/advice with daughter's debts please.

Ah thanks!! hehe as you know i have been (well it feels like it) through two divorces with mine and Mr Loo's - and obv he had the little Loos to consider so his was very different to mine.

[Never-In-Doubt]

Re: Want help/advice with daughter's debts please.

Thank you Niddy (hope it's OK to call you that).

Thank you so much for studying the whole situation. And a really big thank you for typing out a straightforward, comprehensive plan. Yep!! That sounds sensible. Of course, I've had all sorts of conflicting ideas going round in my mind over the past few years. I'm very grateful for you thoughts and will be mulling them over. I can see your reasoning.

EDIT: My feelings are that I want to clear much of the mortgage for my daughter, but paying off her ex's debts leaves a nasty taste. Your plan looks as if it finds a way around that ... damage limitation.

I think that the safest way to play it would be to try and get him to agree to something (ie cash payout) in exchange for walking away - and also that your daughter will sort the debts out etc.

He is likely to take £10k to walk, most men would, so when he signs the house over your solicitor would then pass him a £10k cheque and that's that - he's out the picture legally and forever (as far as the house is concerned) and then you pay whatever you want to into it thus reducing the liability of outstanding mortgage to your daughter.

The debts, we can sort those out by way of F&F settlements.....

[WorriedGrandma]

Re: Want help/advice with daughter's debts please.

Without wishing to further complicate things, the figures are around:

1) Equity in house £160k - £142k = £18k

2) Total of ALL loans/debts/overdrafts (joint and sole)
(roughly - his = £5.5k, hers = £10k, joint = £10.5k )= £26k

3) So equity minus debts is a minus figure, but he will argue that (although he ran up most of the debt) he has less, because it was transferred to her name.

LooLoo. He is never out of work and does 2 jobs. His income is not high. He is paying £50 maintenance. He was deducting £15 per week from the maintenance, when he was doing a couple of school-runs (for petrol), but now he no longer does any school runs, she gets £50 (not £35). *sigh*

[LooLoo]

Re: Want help/advice with daughter's debts please.

He sounds like such a charmer!!!

[PlanB]

Re: Want help/advice with daughter's debts please.

Your daughter may also want to consider a "Clean Break" divorce settlement where she trades her claim for maintenance from him in return for him dropping his claim on the house. She would then have all of the house but no money coming in from him towards her child. You'd have to do the maths to see if this makes sense in the long term, but if he's a reluctant payer there is always the risk that he might stop giving her maintenance and she'd have to go back and forth to court to chase him which is a pain in the bum.

[Never-In-Doubt]

Re: Want help/advice with daughter's debts please.

Without wishing to further complicate things, the figures are around:

1) Equity in house £160k - £142k = £18k

2) Total of ALL loans/debts/overdrafts (joint and sole)
(roughly - his = £5.5k, hers = £10k, joint = £10.5k )= £26k

3) So equity minus debts is a minus figure, but he will argue that (although he ran up most of the debt) he has less, because it was transferred to her name.

LooLoo. He is never out of work and does 2 jobs. His income is not high. He is paying £50 maintenance. He was deducting £15 per week from the maintenance, when he was doing a couple of school-runs (for petrol), but now he no longer does any school runs, she gets £50 (not £35). *sigh*

Ok so there is £18k equity assuming best case sale versus £26k debt so if you're happy to, offer him a straight £5k to walk away with the condition your daughter will settle all debts, that way you're assuming an average increase in house equity of +£13k which in the current climate is very unlikely......

He may well take it - that way leave the maintenance issue out of things as if your daughter ever has to claim benefits, any CSA forms part of her assessment so best not to extinguish her claim as this could affect any social she may ever be entitled to.

That's what I would consider, with the alternative being spelled out to him that she will sell the house and then come after him for 50% of the debts meaning he'll actually be worse off (to the tune of at least £6.5k)....

It's what I would be looking to do.

[transformer999]

Re: Want help/advice with daughter's debts please.

Oh what excellent advice Niddy...maybe you could do some sums for me to?

[PlanB]

Re: Want help/advice with daughter's debts please.

Also ask the solicitor the best way to 'gift' this money to your daughter to avoid any future inheritance tax issues. As long as you survive seven years after the gift there will be no tax to pay (on a sliding scale during that 7 years too). I'm not wanting to sound morbid but it helps to be savvy about tax implications well in advance. I believe you can 'gift' a child (of any age!) £3k per year tax free too

Another advantage of gifting the money to her now would be avoid any questions later if you ever need to go into a care home and have your fees paid by your local authority. They can't accuse you of deliberately disposing of your capital to avoid the fees if you gave her the money years before the event

I hope I'm as smart a Granny as you are when it gets to be my turn. I'm still waiting for my daughter to start breeding

[WorriedGrandma]

Re: Want help/advice with daughter's debts please.

The profile on the left describes me as an "AAD Enthusiast". Yes!!! I really do like this forum. Excellent advice and you seem cohesive ... working as a team.

I know I must accept some blame (because my posts were rambling) but, when I posted on "the other" forum in December, I was bombarded with questions (without understanding the relevance) from all angles, and felt I was frantically supplying answers, but receiving no further input on the subject.

Thank you all again. I'll get my daughter to read through the thread this evening (or over the weekend) .... and keep you informed.

[transformer999]

Re: Want help/advice with daughter's debts please.

Hi WG if it is any consolation I fully sympathise with what you are going through and agree that this site has helped more people including myself than any other forum I have visited.

Here people do not judge and they listen and not only give the best advice possible but they give that bit extra....and that is support and comforting words...just for someone to say don't worry you'll be alright....means so much at the most daunting and desparate of times.

I can relate to what your daughter is going through...having a troll for a husband...and the pressure if there any children involved. I cannot give any legal advice but I can say that the help that you are getting and will continue to get for your daughter.....will hopefully ease the pain of this traumatic time that you and & her are currently going through.

You are a credit to your daughter as you are helping and supporting her through all this which cannot be easy for any parent....you rant and ramble as much as you like...as that is what I do....and it is good to get things off your chest.....

I wish you and your daughter the very best of luck and you are in safe hands...that I can tell you

[PlanB]

Re: Want help/advice with daughter's debts please.

I'll get my daughter to read through the thread this evening (or over the weekend) .... and keep you informed.

Maybe your daughter would like to post on here too if she's got some questions about these debts

[BBoo]

Re: Want help/advice with daughter's debts please.

What Niddy has suggested sounds very workable. Apologies - I'm missing bits at the moment in my own head - were they actually husband and wife, had they been through a civil ceremony or were they just co-habiting? Legally it makes a massive difference to their respective rights.

Sorry, I know you were bombarded with questions over the road and we don't want you to feel that way here, but I seem to have missed this bit in reading through the thread, so it would be good to have an answer - even if from another member if I've just plain missed something obvious.

[PlanB]

EDIT: My feelings are that I want to clear much of the mortgage for my daughter, but paying off her ex's debts leaves a nasty taste. Your plan looks as if it finds a way around that ... damage limitation.

^^^^ In order to be safe it may be wise to pay any money towards reducing your daughter's mortgage direct to the lender and not to your daughter's bank account. That way it would be less visible to (a) HMRC and (b) her ex-partner. However I wouldn't do this until you've spoken to a lawyer and got some kind of formal agreement with the ex because if you reduce her liabilities now you run the risk of increasing his claim on the increased equity in the house, and I'm pretty sure that's not your intention!

My daughter married in 2001, but separated from her husband within the year. They have never got around to divorce. She was living with (not married to) the ex, to whom I refer, from 2002 to 2011; the later is the father of her 7 year old child.

I've just noticed that your daughter is still married to her husband from 2001 and has not got divorced yet although she has lived with her current ex for the subsequent 10 years. Would it make sense for her to deal with this issue at the same as unravelling her finances with the ex? I doubt whether her husband would have any legal claim on her assets (or your generous financial input) after a decade has elapsed, but it may have some obscure impact on all of this.

When you see the lawyer your daughter will be asked what the money from the debts/loans was actually spent on. I note that one of them was for the expenses (legal fees, stamp duty and/or moving costs I presume) of buying the house, and this may be factored into the equation if she intends to hang on to the property since it could be said that she still has the ongoing value of that money regardless of the fact that the loan is in joint names. She should see if she's got the statements which show what was spent on what and for whose benefit of all these debts. She should also see if she's kept copies of the original application forms for any loans in which she would probably have been asked to state the reason for the loan such as "home improvements" etc.

If you've only got 30 mins of free advice with the lawyer then it's best to get all the paperwork ready before you have the meeting so you can talk specifics not hypotheticals

Good Luck with this. It's good for you to both know where you stand legally even if your daughter decides to do nothing about it yet

I should clarify that as far as the creditors are concerned the debt is owed by the person whose name is on the account regardless of what the money was spent on and who got the benefit. I understand that the creditor has the legal right to chase either or both your daughter and/or her ex partner if it's a joint loan.

[PlanB]

Re: Want help/advice with daughter's debts please.

^^^^ I expect those three posts were merged into one because poor Niddy couldn't face the prospect of trying to teach Plan B how to do multi-quotes on her computer