Can a spouse withhold consent to selling the family home for a Debt Settlement?

[Brendan Burgess]

I am trying to figure out the implications of the family home for the debt settlement.


1) Let's say that a husband and wife have positive equity in their home which they own jointly. But the husband would like to sell the home to pay off his creditors or to avail of a debt settlement.

Can the wife simply refuse to sell the family home?

2) We hear of people in financial trouble transferring the family home into the name of the wife. Does this work? Does it put the house beyond the reach of creditors?

3) If a husband and wife fully agree to put their home as security for a loan, say to set up a business, then there is no barrier to the lender seeking to repossess the home?

4) As I understand it, the Family Home Protection Act, only applies to homes which are in the name of one spouse only. It gives the other spouse the same protection as if the house was in their joint names?

 

[mf1]

Re: Can a spouse withold consent to selling the family home for a Debt Settlement?

I think its nmportant to remember that many people have an "attachment" to their "home" and very often it is not regarded as an asset but, rather, as a sanctuary. Some people would prefer to live in penury before they would sell the "family home" and move somewhere more suitable - easier to maintain, easier to heat etc.,etc.

When you look at caselaw also you have to remember that you are looking at a specific set of circumstances with specific people with specific agendas.

Finally, different economic circumstances cause people to behave differently so while it might have been unlikely that a creditor would seek to enforce a Judgment Mortgage in past times, if its a matter of their own survival...........

In broad answer to the original queries though..........

1. Yes. Spouse can refuse to sell. What happens? Either the problem goes away ( very unlikely) or a judgment is obtained against the other spouse, a judgment mortgage is registered on the property , the joint tenancy is severed and the creditor could seek to enforce the judgment mortgage by selling the property but with full account being taken for the one half share not available to the creditors.

2. Happens but by and large unless a transfer is done years in advance of creditors looming a Court would set aside any such transfer.

3. Confirmed - although one possible ground of defence is "I did not know what I was signing" - unlikely to work.

4. The property cannot be sold without their consent - but that withholding of consent can be overcome by a Court order, if appropriate.

mf

 

[dewdrop]

Re: Can a spouse withold consent to selling the family home for a Debt Settlement?

in regard to query (3) i feel there could be circumstances where a spouse might be successful in pleading ignorance especially if the family home was a business and she took little part in it. In my former days as a bank offficial the general rule of thumb by conservative lenders that apart from the mortgage buying the property and further loans developing it any lendings secured could be at risk if contested. No doubt a more liberal approach has been taken in recent years.