Negative Equity - What to do when 2 people on the 1 policy but only 1 pays

physioscot

Hi,

I'd be very grateful if anyone could help with the following query or at least put me in the right direction.

My girlfriend bought her apartment in 2006 (Mary) at the height of the celtic tiger. Because the mortgage was so high, the bank insisted on a 2nd person (Alice) also being on the policy. Now the property is 1/3rd of its value. Mary has always lived there and Alice has never, so Alice has not paid anything into the mortgage at all, she just helped Mary get the mortgage but all letters are addressed FTAO Mary & Alice. Alice is from the Far East (now Irish passport) so is planning to retire in 7 years and move back there with her pension.

Mary is thinking about declaring bankruptcy by finding a job in the UK as a nurse first and contacting a company to do so.

Has anyone else had this experience or knows of it when 2 people are on the mortgage policy? What advice can you give as both are in Ireland at present? Can Mary declare bankruptcy in any way without the bank going after Alice? She would if she could. She is also thinking about trying to get a moritorium or reduced payment. Talked to Irish lawyer but grey area as to what can be done in the UK!!

Any help/leads would be appreciated.

thanks

Super-Rush

Moved from After Hours.

homer911

physioscot wrote: »

Hi,

I'd be very grateful if anyone could help with the following query or at least put me in the right direction.

My girlfriend bought her apartment in 2006 (Mary) at the height of the celtic tiger. Because the mortgage was so high, the bank insisted on a 2nd person (Alice) also being on the policy. Now the property is 1/3rd of its value. Mary has always lived there and Alice has never, so Alice has not paid anything into the mortgage at all, she just helped Mary get the mortgage but all letters are addressed FTAO Mary & Alice. Alice is from the Far East (now Irish passport) so is planning to retire in 7 years and move back there with her pension.

Mary is thinking about declaring bankruptcy by finding a job in the UK as a nurse first and contacting a company to do so.

Has anyone else had this experience or knows of it when 2 people are on the mortgage policy? What advice can you give as both are in Ireland at present? Can Mary declare bankruptcy in any way without the bank going after Alice? She would if she could. She is also thinking about trying to get a moritorium or reduced payment. Talked to Irish lawyer but grey area as to what can be done in the UK!!

Any help/leads would be appreciated.

thanks

There was a case in the irish courts last week where a credit union went after a guarantor and one. If your name is on the policy you are jointly and severably liable.. You should check out this case

Stheno

THis is the article

OP if Mary buggers off then the banks can and will pursue Alice for the entire debt, and vice versa

Skr4wny

If Mary declares bankruptcy and leaves the country Alice will have to take the hit as the bank will be after her.

I never get people being somewhat unsure about the implications of being the joint party or guarantor on loan for someone else. It doesn't matter you never made a repayment or never lived there, you're still in the picture.

StillWaters

Stheno wrote: »

THis is the article

OP if Mary buggers off then the banks can and will pursue Alice for the entire debt, and vice versa

Thats it in a nutshell. It would not be a nice thing for Mary to do, nasty in fact.

Lantus

I would suggest that Alice get legal advice and attempt to have herself removed from the mortgage as quickly as she can. Assuming Mary has made consistent payments then this may not be an issue.

Once this has happened then Mary can make decisions that she feels represent her best interest.

roro2

Lantus wrote: »

I would suggest that Alice get legal advice and attempt to have herself removed from the mortgage as quickly as she can. Assuming Mary has made consistent payments then this may not be an issue.

Once this has happened then Mary can make decisions that she feels represent her best interest.

I reckon this woild be quite a big issue from the bank's perspective, and unlikely to happen. If it insisted on a second borrower in 2006, why would it drop that requirement now, especially with a property that's only worth 1/3rd of the 2006 value?

StillWaters

There is not a hope in hell that the bank will take Alice off the mortgage.