Negative Equity on house with Ex. Need to move on

Discussion in 'Mortgage arrears & negative equity case studies' started by BottleCap, Nov 29, 2016.

  1. BottleCap

    BottleCap New Member

    Hi guys,

    Just need a bit of advice. I have a house with an ex. We bought the house in 2006 and while the house suffered greatly with negative equity a few years ago, it has recovered to a certain extent and is now about 40k negative equity. I lived in the house for a short period before the relationship broke down. My ex has continued to live there while I have continued to contribute to the mortgage since then. With no answer to the problem and 100k negative equity I had no choice at that time but to put this in the background and move on with my life in the hope that the market value of the house would eventually neutralise the negative equity and then we would sell the house, but it’s now YEARS later and the recovery has slowed it seems in this particular area. I now have a wife, kids and a second house. At this stage I really need to get out of my old house, I can’t help but feel my family are at financial risk due to this burden. I am liable to the entire mortgage if my ex decides to do a runner… It’s a nightmare and now due to unexpected circumstances, money is very tight and when I have to hold off buying necessities for my new-born and instead put money into this black hole I sometimes feel like “what’s the point, why am I struggling to pay this mortgage for a house I haven’t even seen in years… use the money to go on my family’s needs instead!!!” I know it’s not realistic but it’s what goes on in my head sometimes! I read so many similar stories of the person that moves out just stops paying.

    My query is, how can I get out of this. If we and bank agrees to sell the house there will be 40k approx to pay in negative equity, 20k for me. I don’t have this in one lump sum, or any type of sum! All I have is the monthly amount I use to pay that mortgage, so the only way I could pay this negative equity is for it to be arranged into some sort of manageable loan and paid over a few years, or the negative equity debt be written off which would be a dream and let me get on with my life as I struggle at the moment with this burden.

    I have heard of Personal Insolvency Schemes, but how do these work, would they work for me? I need some sound advice on a direction I should be aiming for!
  2. TLO

    TLO Frequent Poster

    Hi BottleCap

    Another way of looking at this is that your ex is liable for the entire amount if you wash your hands of it. Why should you be contributing to somebody else's accommodation? If you are coming under pressure a short term solution would be to prioritise on your family by ceasing payments on the original house.

    We probably don't have enough information on your circumstances to comment further. You might consider completing the template in and pasting the results here. Posters will then be able to give more pertinent advice.
  3. gnf_ireland

    gnf_ireland Frequent Poster

    Last edited by a moderator: Nov 29, 2016
    Agree you need to give more details on the scenario and definitely need to list figures

    1. how much are the monthly repayments?
    2. how much do you contribute versus your ex?
    3. who is living in the house now? Your ex, and who else?
    4. what is reasonable rental prices for similar houses in the area?
    5. any scope to rent a room there to assist with the payment of the mortgage?

    But I do agree, if money is tight you need to discuss it with your ex and agree how you both get out of the mess. If they want the house, then they have to show a way of how this can be achieved? Are you willing to write off all of the money paid into the house to date?

    Cannot advise on PIA, but think you need to crunch the numbers and then discuss with your ex how you can both resolve the issue together. If no cooperation, then you need to determine next steps
    Last edited by a moderator: Nov 29, 2016
  4. BottleCap

    BottleCap New Member

    Hi TLO,

    Yes thats another way of looking at it, but if I just stop paying would that bring my current house at risk at all?? Could the bank chase me and use my current house as equity? AIB (mortgage 1). PTSB (mortgage 2).

    1) 1400
    2) 600
    3) Ex. I dont know if anyone else is living there
    4) I would think rent would match the mortgage..
    5) I suggested rent before but Ex did not agree

    I am willing to write off all the money I have contributed towards this house, I just want out.
  5. Brendan Burgess

    Brendan Burgess Founder

    Please do not expect that you will get any comprehensive or meaningful suggestions if you don't provide the comprehensive information as suggested by TLO

  6. gnf_ireland

    gnf_ireland Frequent Poster

    Agree with Brendan re comprehensive information needs to be provided to get a proper answer

    However, at a high level, I am not sure your ex is really in a position to 'not agree' to renting it since you are effectively subsidising her rent by 600 euro a month. If I was you, I would contact your ex, ask to have a rational discussion around the future of the house. If she refused, then I would advise her you are stopping the 600 euro a month contribution to the mortgage effective 1st January, and you will be taking legal advice on what to do next regarding the house & mortgage. Whether you decide to go down the legal route or not is up to you, but I do think you need to 'encourage' your ex to work with you on a solution to this.

    Either way, you have a young family and need to put them first. This needs to be permanently resolved, one way or the other.
  7. Bronte

    Bronte Frequent Poster

    Agree too on us needing more information.

    But I disagree with GNF on the nuclear option.

    We also need to know the circumstances of your ex. I would suggest it is highly unlikely she will not by now consider this house 'hers's. You mention being willing to walking away with nothing despite what you've put into it. Well that's the wrong way to look at it, it's in NE, there is nothing there of yours. I would suggest you hold your horses until your NE is clear and then go about sorting it out.

    Why do we need this information, to give you some advice on what she might do. Nobody who has invested, as she has, for 10 years is going to walk away. We also need to know would the bank agree to her taking on the mortgage in her own name. Has she a good job, kids a partner or husband.

    Having a new baby is stressful at the best of times, and I can imagine this added expense and this link to your past, which is a drain on your resources is a strain on everybody.
  8. gnf_ireland

    gnf_ireland Frequent Poster

    Bronte - fair enough on the nuclear option, but the option is more to bring her to the table. The challenge here is like you say - she will consider the house hers. But its not, its both of theirs and she is getting a 'subsidised house' in effect. Yes the OP has responsibilities here to ensure that the negative equity is cleared, but what happens then? Surely this needs to be agreed now as to what happens when that point is reached?

    OP is within his right to 'let out' the half of the house, or at least work with his ex towards a solution. What if his ex has a partner in the house at the moment - should he/she not be paying a form of rent since the OP does own half the house. What if the ex is renting out a room at the moment in the house without telling the OP?

    There are two elements here
    - 1. is the financial aspect of what needs to be done, both short term and long term
    - 2. the fact that this is a residual part of an old relationship, which no doubt needs to be cleaned up. The OP is in effect carrying a level of 'baggage' on this and needs to get it off his back

    At a human level, the two parties need to sit down and discuss what the exit strategy is for the house. It is unreasonable for the OP not to want to force a sale when the time comes (back in positive equity) to put it behind them. The ex probably will not agree to this, so something needs to be done now to prepare for that eventuality.

    In terms of financial advice, as others have said, more detail is needed to offer any of that. Bronte has outlined the reasons why...
    so-crates likes this.
  9. dereko1969

    dereko1969 Frequent Poster

    I'm presuming that the ex was a partner rather than a wife, can you clarify that?
  10. so-crates

    so-crates Frequent Poster

    Bottlecap, at present are you in regular contact (civil or otherwise) with you former partner?