Bus partner defaulted on joint & several mortgage, what to do next?

[McCreevey]

Hi all,

I have a J&S liability mortgage with another man on a property that is in negative equity, he first defaulted 3 years ago and has not paid into the account since. I tried everything I could to resolve the issue with him but he wouldn't take my calls etc. I eventually got my solicitor to write to him and ultimately had to take him to court, this was a massively lengthy process & he made it as difficult as he possibly could...the next step now is the high court. I now know he has lots of judgements against him and hasn't a bean, so I may get in the queue.... although I hear through the grapevine he's been abroad on holidays a few times! My solicitors fees to date are in the high teens.

In the meantime I have also been in and out to the banks to try come up with a plan to resolve the issue (i have been paying my half of the mortgage all along) but it has been an utter nightmare, staff are constantly changing, I've had 7 people in charge of the case and not one can give me any answers or agree a plan...they know I've been 3 years trying to resolve this & have spent a small fortune in the process but still I'm getting nowhere because ultimately they know that I could, at a major stretch, take over the whole debt. I feel they should have some responsibility here too though, granted I made a major mistake going into business with this guy but they lent him the money to do so, surely they should take some pain too?

I feel completely stuck, do I take this guy to the high court, which would cost further tens of thousands and what will it get me anyway? Or do I take over the whole debt (which I could just about manage at a major stretch) and let him walk away scot free? I fact I actually suspect he may have the nerve to look for a payment from me to take his name off the deeds, it would gall me to do it and it's more debt but I would be rid of him finally....I honestly don't know what to do... Any suggestions would be helpful, thank you...

 

[so-crates]

I feel they should have some responsibility here too though, granted I made a major mistake going into business with this guy but they lent him the money to do so, surely they should take some pain too?

Sorry to be blunt, but why do you think "they should take some pain too"? They are not responsible in any way for the behaviour of your former business partner.

This will stick in your craw as it would stick in anyone's but perhaps you should do what it takes to cut your losses with this man fully and finally. How much has chasing him cost you? It isn't just the fees, it is the time, it is the mortgage arrears, it is the cost of clearing the mortgage arrears etc. How much more will it cost you? You say he hasn't a bean (taking holidays abroad may not indicate much) and even if it goes your way in the high court you will probably be in a position where you are no better off, you have spent a lot of money getting there and you won't feel vindicated because he still won't have a bean and you will still have to deal with the property and the mortgage.

We are instinctively inclined to hang onto something rather than let it go. We are instinctively aware of what is fair and what isn't and we will fight it when someone is unfair to us - sometimes though that just leads to a war of attrition where the winner is hurt as much as the loser.

 

[hubble]

How much is the total mortgage?
Have you asked the Bank to sever the mortgage?
Can you put a refinancing deal to the Bank?
What options have you explored?
I would suggest that you at least get a judgment against your business partner? He might come into money.

 

[44brendan]

The bank will not sever the mortgage. Why on earth should they. Court process is expensive and going to the High Court for a judgement against an individual who is up to his neck in debt makes no economic sense. Best option at this stage is to not throw good money after bad in pursuing this individual.
Deal directly with the bank in respect of this debt. It is now your debt and while you may feel that there is some moral responsibility on the Bank, this will cut no ice with them in any negotiations. Offer to assist the bank in re-posession proceedings in return for them agreeing to some deal on the negative equity. Forget the my half/his half arguement, what is now at issue is how much you can offer them to cut a deal.

 

[hubble]

would suggest that it is not as simple as that. Your negotiation power very much depends upon the loan amount, any additional security held, how much knowledge the Bank have of your circumstances, whether the premises is an investment property not related to your business etc etc etc

Selling the Property is not possible without the co-operation of the joint owner in the absence of receivership.

If I were the person he should have considered default when his co-owner defaulted. That would set up the receivership and then - as rightly said the avenue for "cutting a deal".