Divorce advice

[pompeygazza]

Can anyone advise on the situation that my brother has got into, here are the facts.

Him and his girlfriend bought a house in april 2012 for approx. 110k, he supplied 20k deposit and 10k to do the place up, mortgage is solely in his name as she had a bad credit record.
Married in august 2013. Split up in march 2016, she moved out.
In march 2015 he received a 55k inheritance of which 35k went into paying down the mortgage, the other 20k went on holidays, car (for her), new tele etc.
Now they have split, she is asking for 25k (too much imo, but he wants to do the right thing) as part of the separation, thing is he can’t remortgage as he has a black mark on his credit record from a phone bill he didn’t pay.

she says if she has to wait 3 years the pay off will go up to 50k.

Any ideas as to where he stands and as to what he will be required to cough up?

[didds]

IANAL - why would the pay off double over 3 years?

didds

[melonfool]

Can anyone advise on the situation that my brother has got into, here are the facts.

Him and his girlfriend bought a house in april 2012 for approx. 110k, he supplied 20k deposit and 10k to do the place up, mortgage is solely in his name as she had a bad credit record.
Married in august 2013. Split up in march 2016, she moved out.
In march 2015 he received a 55k inheritance of which 35k went into paying down the mortgage, the other 20k went on holidays, car (for her), new tele etc.
Now they have split, she is asking for 25k (too much imo, but he wants to do the right thing) as part of the separation, thing is he can’t remortgage as he has a black mark on his credit record from a phone bill he didn’t pay.

she says if she has to wait 3 years the pay off will go up to 50k.

Any ideas as to where he stands and as to what he will be required to cough up?

Seems really unlikely he can't remortgage just due to one bill - it is often easier to get a mortgage than, say, a credit card because mortgages are asset backed. Has he spoken to a broker? If he could get a mortgage, could he afford it? If not, it's irrelevant and if he has to buy her out of the house then he'd need a loan or to sell.

There is info missing:

no kids presumably?
what assets did they each bring to the marriage?

While the presumption is, I understand, 50/50 with a short marriage with no children they might just look to being in the position they were in at the start. So, it seems unlikely she had a property as she did not contribute to this one. She still has the new car?

Mel

[pompeygazza]

his mortgage company has said no to a remortgage due to his credit score being wrecked by this phone no payment.

yes no kids.

what i have put is basically all the assets, she had nothing apart from a bit of furniture (that she has). he had 30k in cash.

50/50 sounds a bit harsh, 50% of what, the mortgaged house or the equity?

she still has the car, not brand new but not a banger oh and she took 5k from the joint account (that we've only just uncovered).

[melonfool]

his mortgage company has said no to a remortgage due to his credit score being wrecked by this phone no payment.

There are other companies, he needs to speak to a broker. How much does he earn? It sounds like it's a very low mortgage if the house was £110k, he paid a £20 deposit then paid off £35k. Shame he paid all that and dind't pay a phone bill...but anyway....

what i have put is basically all the assets, she had nothing apart from a bit of furniture (that she has). he had 30k in cash.

50/50 sounds a bit harsh, 50% of what, the mortgaged house or the equity?

Sorry, my poor wording. The usual presumption is 50/50 of all assets (so, dump them in together, deduct liabilities [i.e. mortgage and any other debts], split what is left 50/50), but with a short marriage and no kids it is more usual to just try to put people into the position they would have been in had they not got together.

she still has the car, not brand new but not a banger oh and she took 5k from the joint account (that we've only just uncovered).

Well, she was entitled to it - it was jointly hers.

Anyway - what *can* he offer? That might be a place to start.

Mel

[gryffron]

So she works to support herself? Hence no future maintenance to pay?

AIUI, with no kids involved, the basic assumption is she is entitled to 50% of all assets accumulated during the marriage. And yes that includes "his" inheritance. So tbh £25k doesn't sound too unfair. Indeed it might be a little cautious. But she has already taken her nice new car, and £5k cash. So £25k extra doesnt sound that unreasonable to me.

What should he do now? Change the locks, fast! Clear anything remaining in the current account. Dissociate the two of them financially, which means removing her name from anything to do with the house, council tax, and any energy bills. Close any other joint accounts. And do everything to ensure she cannot take anything further from him without agreement. Protect what he has left, especially the house.

Yes, agree to that £25k on the condition she waives all future claim to the house. Almost certainly worth getting a solicitor to provide that agreement. At the very least get agreement in writing before handing over the cash. I concur with Mel that with so much equity in the property he should be able to remortgage. Yes, despite a few black marks on his credit record. If not, can any family member lend him the cash? A quick clean break is much better for everyone than a long drawn out battle. Both financially and psychological health.

Gryff

[redsturgeon]

£25k for 4 and a half years, sounds like a bargain to me.

John

[newlyretired]

£25k for 4 and a half years, sounds like a bargain to me.

John

A bargain for whom?

newlyretired

[redsturgeon]

£25k for 4 and a half years, sounds like a bargain to me.

John

A bargain for whom?

newlyretired

Both

[grimer]

I have no legal basis for the following comment, but...

I'd expect that 50% of any asset price increase might be considered hers - e.g. house bought for £110k. House now worth £150k. She could expect £20k.

If she's paid towards the mortgage and helped with DIY (material improvements) then he might lose 50% of everything or maybe 50% excluding his lump sum contributions (which might just be 50% of the debt if the house hasn't increased in value)?

[melonfool]

I have no legal basis for the following comment, but...

I'd expect that 50% of any asset price increase might be considered hers - e.g. house bought for £110k. House now worth £150k. She could expect £20k.

If she's paid towards the mortgage and helped with DIY (material improvements) then he might lose 50% of everything or maybe 50% excluding his lump sum contributions (which might just be 50% of the debt if the house hasn't increased in value)?

You are thinking of unmarried couples.

In a marriage a home is a marital asset, jointly, no matter who paid for it or anything in it.

Mel

[gryffron]

http://anthonygold.co.uk/latest/comment ... _marriages
that does not necessarily mean there must be an equal division of assets. The court must look at which assets were produced during the marriage, and which existed before. As time goes by, the distinction between marital and non-marital assets becomes increasingly blurred.

On every piece of advice so far in this thread, that £25k is looking a bargain

[dspp]

Been there, done that, got the scars.
Pay the £25k but get a solicitor to draw up the financial settlement agreement before paying anything.
Change the locks, accounts, everything, quick.
It is a good deal she is offering.
regards, dspp

[JonE]

Him and his girlfriend bought a house in april 2012 for approx. 110k, he supplied 20k deposit and 10k to do the place up, mortgage is solely in his name as she had a bad credit record.

Although you say they bought the house, if the mortgage is in his sole name then the legal title would have to be in his sole name (lenders have for many years insisted on a direct 1:1 match) so the process may be a little more straightforward in that it's 'only' her beneficial interest in the property that needs to be sorted rather than having to change the legal title.

Cheers!

[Clitheroekid]

Him and his girlfriend bought a house in april 2012 for approx. 110k, he supplied 20k deposit and 10k to do the place up, mortgage is solely in his name as she had a bad credit record.

A key piece of information that's missing is the current approximate value of the house.

[pompeygazza]

Thanks for all the advice so far.

The house hasn't risen a lot, maybe 10k at a push (its in a very, very rough area) despite getting it done out nice, its starting to look tired as they/he haven't got a clue about maintenance (think 8 grand on the new garden and decking which is now very weedy and getting rotten, sheesh!)

I shall push him towards a broker.

He literally has no money spare, I had to lend him 3 grand to replace and re-site the old boiler which he is paying me back at £15 a week (who'd have though royal mail pay weekly)

His job is reasonably secure for at least the next 5 years as he's been re-sited to a new mail sorting hub.

They're both waiting to get a divorce on the two year separation grounds as they think it's cheaper, can anyone advise on this too?

[melonfool]

They're both waiting to get a divorce on the two year separation grounds as they think it's cheaper, can anyone advise on this too?

Nothing here to suggest it's cheaper to wait the 2 years:

https://www.moneyadviceservice.org.uk/e ... ution-cost

I suspect they just mean 'uncontested' which is 'cheaper' in that you don't go to court armed with barristers. But they're not going to do that anyway.

Mel

[Clitheroekid]

The house hasn't risen a lot, maybe 10k at a push

Looking at the figures it seems she's contributed little or nothing. Although the normal presumption is that the marital home is owned in equal shares this is a short marriage, and that presumption might well therefore be displaced.

Although there would appear to be around £60k equity in the house that equity has been provided in its entirety by your brother. Although you say the property's increased in value by £10k that would be wholly accounted for by the £10k your brother spent doing it up. In other words the house hasn't increased in value at all.

I would therefore say to her that because it was such a short marriage the court's inclination would be to put them both back into the situation they were at the beginning of the marriage, other than in respect of assets accrued during the marriage. And although the inheritance accrued during the marriage I would argue that because of the short marriage and the fact that she left only a year after he inherited the money it should be treated as his personal asset, not one that should be divided.

I would therefore argue that because she contributed nothing there is nothing to be divided, and that she’s actually done quite well to get the car and the £5k in cash out of the marriage.

This is admittedly a hard line approach, but the intention would be to diminish her expectations, and soften her up for a settlement offer. And realistically a court would probably award her something. In particular, a generous judge might view the £35k equity arising from the inheritance to be jointly owned simply because it did arrive during the marriage, giving her around £18k, maybe rounding it up to £20k.

My inclination would therefore be to offer her £15k on the basis that if she won't accept it he could `reluctantly' concede a settlement at £20k.

One asset that's not been mentioned, but which should, for the sake of completion, be taken into account is that of pension provision. Again, because it is such a short marriage it's unlikely to be of much significance, but if they are to obtain a consent order disposing of financial claims they will both need to disclose their respective pension provision anyway.

A spouse can quite often have substantial pension provision without realising it, and the sudden appearance of a pension fund worth even £50k or so can be disruptive to negotiations where there are few other assets involved, so it's much better to deal with it now rather than have it disclosed just at the point of signing off the settlement and have it derail the process.

One important tactical point to bear in mind is that legal aid is no longer available for divorce proceedings, so this will severely restrict her ability to negotiate. If she does go to a solicitor she will be told that their bill will have to be paid out of whatever settlement is agreed, and with such small sums involved any increase that's negotiated could well be wiped out by legal costs, making it a pointless exercise.

However, it's important for your brother to be in a position to pay up immediately once a settlement’s agreed. From what you say she's probably eager to receive the cash, and an offer of £15k in the hand now may well be more attractive than the prospect of having to wait a long time for a larger sum.

If he can’t immediately raise the money on a mortgage it might be worth you offering to lend him the cash if you’re able to do so in order that he can get the deal done and then repay you later once he's got his mortgage sorted out.

Whatever deal is eventually done it's essential that it's formally recorded so as to be legally binding. The best solution is a consent order obtained through the court, but that can only be done in the context of divorce proceedings, so if they are going to wait 2 years the alternative is a formal separation agreement. This can be prepared by his solicitor, though she would have to be recommended to obtain independent advice before signing it.

Although the costs are often borne equally it might be sensible for your brother to offer to pay the whole of the bill as an incentive for her to get signed up.

They're both waiting to get a divorce on the two year separation grounds as they think it's cheaper, can anyone advise on this too?

The cost of the divorce itself is the same whatever the grounds. However, I usually advise against waiting if it can be avoided. As mentioned above, such a wait precludes dealing with the settlement by way of a consent order, and as such an order should still be obtained after the actual divorce it means duplication of effort and therefore cost. In any event, it's silly to remain married when the relationship is clearly dead.

The best way of avoiding the wait is for one of them to petition on the grounds of the other's adultery. It's not necessary to name the third party, so if either of them is now in another relationship this ground can be used.

[redsturgeon]

Excellent advice from CK as always...I retract my statement that £25k seemed a bargain...I'd wrongly assumed a greater level of HPI over 5 years.

One caveat of course is the risk inherent in lending such a relatively large amount of money to a family member.I would usually say don't do it unless you are prepared to lose it.

John

[pompeygazza]

Thank you for the excellent advice.

Although I could lend him the money I'm loathe to do so as he really needs to wise up (and grow up) on the financial front and so a bit of pain may help focus matters.

I shall look into a broker and then get him to make her an offer.

I'll report back how it ends up.