Messy breakup - legal position.

I don't think proof of that is necessary, is it? He doesn't deny getting the money, and he has been making payments, hasn't he?

The key is first to look at the loan and the house separately as if the other didn't exist.

(1) The loan. It would be unreasonable to expect him to pay it off in one go because he probably can't afford to. The original agreement was to make the payments to an agreed schedule and she can't reasonably expect to change the terms of the agreement unilaterally.

(2) The house. Normally he would expect to be paid the buy-out money straight away as a lump sum, but it would be good form of him to allow her time to pay in instalments if she can't raise the cash, bearing in mind she will be strapped if she's taking on the whole mortgage on her own. But if he accepts payment by instalments, he should expect a little extra by way of interest. After all, he would need some cash to use as a deposit for somewhere else, which, if he's not getting the house money up front, he would have to borrow and pay interest on.

(3) Now put the two together. Yes, it would make sense just to call it quits, get her to "give" him the £4500 and him to "give" the lot back straight away to pay off the loan, so no money actually changes hands. Or it would also make sense for her to pay him his £4500 in dribs and drabs, magically matching the dates and amounts of the repayments he's still due to make. So here also no money would change hands.

At the end of the day, the loan is a zero-sum game for her. His repayments will pay off the loan she took out on his behalf. If she gave him a virtual lump sum which he paid straight back, she would still have to pay off the loan from her own resources, which is kind of equivalent to her borrowing the house money to pay him off. Also, since she is buying his interest in the house, she will need to find the money somewhere. At worst, she'd have to borrow it. True, this means she would have £9k of borrowing at first, half of it still on his behalf, and just as above, she would have to make repayments on half of it from her own resources, the other half would continue to come from him. So it really makes no difference to her ongoing flow, the only difference is in the extent of her total borrowing.

It's really six and half a dozen and they ought simply to look at which of them has the better creditworthiness, i.e. who could more easily borrow what's needed for his next deposit. A suitable compromise might be for her to give him half his lump sum, in return for him being let off half his repayments, i.e. halving the size of each of the payments he would normally continue to make.

Not really. He holds the cards as his name is still on the titles and presumably on the mortgage.

I'd say that his view is more reasonable. Effectively she ttook out a loan and lent the money to him and he agreed to make the payments. It would be good to get something in writing although she should be able to prove it in court if it came to that.

I realise they both want a clean break but if she wants to encourage that she would have to offer an incentive of maybe paying a smaller amount to clear his part of the debt.

"Ronald Raygun" wrote

In that case, why doesn't she simply say he can retain title to half of the house until it is sold at some point in the future - or she pays him off if sooner? She doesn't have to hand over 4500 now; he continues to make the loan payments, she puts all these into a savings a/c and at the end she "pays him off" for half the house - hopefully mainly, if not all, from the savings a/c.

In effect, it is similar to the situation desired (accepting that the equity on the house will be used to repay the initial loan) *plus* a kind of savings plan for him - ie the only difference to the situation desired is that he makes payments to her each month then basically gets all the money back at the end!

What is even better, is that this is a little "hedge" for her against the value of the house falling / not rising quickly enough. If the house rises in value less than the interest on the savings a/c (or even falls in value), then she pays him less than the contents of the savings plan at the end! Alternatively, if the house goes up in value - she has to pay him a little more, but her half of the house has also gone up in value, so it compensates.

Overall, she wouldn't gain as much if the house went up a lot, but equivalently she wouldn't *lose* as much if house went *down* a lot!!

Hi Damian,

Might I suggest you post your query to uk.legal?!

Re the bank loan - if the loan agreement is in her name - she carries the can, irrespective of a private agreement that cannot be proven. The Ex

Marcus

Because that would give him the power to force a sale on a whim.

No, she can't put his payments into her into savings, they need to go in one pocket and out the other - she has to pay the lender. Remember, she borrowed the money outside and then lent it to him, he's basically making the payments to the lender via her.

"Ronald Raygun" wrote

Hardly "on a whim". When my parents divorced, it took another over 5 years before the house was sold for the proceeds to be split between them!

"Ronald Raygun" wrote

Ah, but as you so rightly pointed out earlier, there are *two* "lumps" of

Whether you allocate (I1) to (O1) and (I2) to (O2) -- or alternatively (I1) to (O2) and (I2) to (O1) -- is essentially irrelevant! :-)

Rather than amateur brain surgeon advice off the internet, she needs to see a solicitor who works in this area, and get some advice on her options. The case law on cohabitation changes constantly.

Yes, but did one of them grab the bull by the horns and assert their right to force a sale against the wishes of the other, or did they try to deal with it outside of court, and just take forever to get anything done because they'd refuse to speak to each other directly?

Certainly the decision of one party to make things difficult for the other can be taken on a whim.

Exactly. It's just that the way you made it sound earlier is as though you had forgotten about O1, and that I1 would thus dispense with the need for I2.

I don't really like the idea of this savings account lark. Essentially this would mean delaying the buyout of his half of the title until the goose has been sufficiently fattened. I'm not sure that adequately meets the wishes of both parties. She probably wants full title now and he certainly wants his money now, so it would make more sense for her to borrow it. She should of course take steps to ensure he doesn't renege on the payments for his original loan, at least by getting some kind of written statement from him acknowledging his debt and his proposed payment plan for clearing it.

"Ronald Raygun" wrote

Yes, one *did*!

"Ronald Raygun" wrote

Certainly not - it all went through solicitors/barristers from the start.

"Ronald Raygun" wrote

Exactly - but that person can be the one saying "nope - I'm not moving out!"

There are various reasons why things can take five years to drag out.

A solicitor will normally ask a female client if her husband's financial position is likely to improve over the next few years. If the answer is Yes, the solicitor can later be held professionally negligent (yes, a solicitor working in this field has told me this last year) if he does not advise the woman to delay matters. So lots of women use various tactics to draw things out. They can be apparently innocent things like permitting silly errors to creep into drafts of the consent order and then "discovering" them at the last minute and insisting they are corrected... you gain a few more weeks and everybody wastes another few hundred quid on the solicitors.

Another, less common, reason is very complex assets to sort out - usually a business, perhaps a business with assets all over the world. If they can't agree, this needs to be professionally valued.

There are other reasons which involve much more cynical but generally accurate observations of human nature (greed is one of them)...

"John-Smith" wrote

Interestingly enough (perhaps), it was the other way around in this case -

Both sexes like getting money quickly!

Indeed.

If she thinks he will do some dirty trick, she will want out quickly.

If she things his finances will go from bad to worse she will want out quickly.

If he's going bankrupt, she will want out double quick, because unless the divorce is very adversarial and as a result the financial settlement has to be imposed by the Court, the man's trustee in bankrupcy can roll back part or all of his divorce settlement i.e. go after some of the assets which she got ...

Just more useless trivia :)