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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hi,I would appreciate your advice to the following problem.

Customer Question

Hi, I would appreciate your advice to the following problem. I have cohabited with my partner for 35years. We moved house 10years ago. Due to the fact I had a ccj we were not able to secure a joint mortgage as we had in our previous property. We had an endowment mortgage for 52000 which Was in joint names and I assume still is. When we moved house we also obtained a mortgage for 60000£ which is in the name of my partner only. A few years ago my partner invested a large sum of money in a business with 2 other partners and unbeknown to me in order to obtain additional finance signed a personal guarantee for£40000. He informed me yesterday that thanx company is in severe financial difficulties and it may fold. He also told me that he is also signed up to another pg for an additional£20000. Sadly we are in the process of terminating our relationship. We both have 2 dependant adult children who are both at university. If the firm folds his only asset is the house but this is my home and I solely have always been responsible for the household bills and have paid the mortgage from my bank account for the past 25years. My partner has stated I can have the house in its entirety a due does not want any financial renumeration. Is there anyway we can protect the house from being sold if his company closes? My credit rating remains poor so I work not be able to secure a mortgage. My eldest daughter has recently received an offer in principal to secure a mortgage of 95000£ but has said she is willing to delay purchasing her own property if she can help me in any way. I would be grateful for your advice. Kind regards, XXXXX XXXXX

Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I clarify with you exactly what sums you ave contributed towards the house please (leaving aside outgoings and interest on any mortgage); have you contributed any capital payments to the mortgage or equity to the house - i.e. contribution towards the purchase price or paying for improvements on the property?

JACUSTOMER-aev7qo0c- : Yes when we purchased this property we paid a deposit of £40000 feh in
JACUSTOMER-aev7qo0c- : yes when we purchased this property we paid a deposit of £40000 which was the profit from our previous property which we jointly owned. I have contributed to all improvements paying at least half if not more.
Joshua :

Thanks; would you please forgive me. I am just about to step into a meeting and I do not wish to give you a rushed answer. Would i be possible to resume in 45mins to an hour by any chance?

JACUSTOMER-aev7qo0c- : Yes. That would be fine. I would be grateful for any assistance/ advice you can offer re-my options.
Joshua :

Sorry for the delay in reverting to you. Would you like to continue?

JACUSTOMER-aev7qo0c- : Yes please
Joshua :

thank you for the above information. If necessary, would you still have financial evidence demonstrating what you say above is the case namely that you contributed towards the original deposit and improvements? is the mortgage on the property capital repayment mortgage or interest only?

JACUSTOMER-aev7qo0c- : I don't know how I would be able to provide this evidence. My partner would verify this. I am sure the solis who assisted with the sale of our previous property and the purchase of our current property would have evidence of this. We have 2mortgages on the property. An endowment and a repayment. The endowment is due to expire 09/2014.
Joshua :

thank you.the position you are likely to find yourself in is that your partner's creditors will be looking to seek an interest in the property under the personal guarantees your partner has signed. The starting point is that they will see your partner's name on the property and claim that they are entitled to all of the equity in the property net of mortgages. Based upon what you say, you are likely to have a substantial equitable interest in the property by virtue of the various contributions you have made however it will be for you to demonstrate this by way of evidence as your partners creditors will be unlikely to readily capitulate on the point as this will reduce the amount of equity they could potentially claim against.

Joshua :

whilst your partners statement will be helpful, it will be of limited assistance in that your partner's creditors will very likely claim that he is not an independent witness in this respect and therefore his evidence will have limited weight accordingly. Ideally, you will be able to locate actual evidence demonstrating the various payments you claim to have made. This can be a time-consuming process but well worth while because every piece of evidence you find potentially gives you a greater equity stake in the property. The higher equity stake you can evidence on the balance of probability, the more potential equity for you to claim and conversely the less your partner's creditors potentially have available

Joshua :

some examples of the sorts of evidence that would be useful: evidence of your original contribution to the property may be sought from your solicitor that acted for you when the property was purchased though of course from what you say this was a long time ago and evidencing this respect may be difficult to substantiate. You may find you have documents in your own files that show the movement of funds in this respect. Bank statements may show more recent financial payments you have made. any agreement made tween you and your partner at the time you purchase the property would be good evidence

Joshua :

the principal difficulty you are likely to face is the time period you are dealing with if the property was purchased some 35 years ago. The burden of proof you are required to satisfy is the balance of probability however a court would not simply accept what you and your partner claim in respect of your financial contributions. some form of corporate of evidence would typically be required in order to establish any financial interest claimed in the property and the more you can find the better your potential claim

Joshua :

from there, you will wish to consider putting together a statement to your partner's creditors setting out the total financial interest you claim to having the property indicating that you would challenge any claims by them in respect of any equity you claim is yours. If you can produce substantive evidence to support your claims, the creditors will often accept financial evidence and negotiate a settlement. If the evidence you can supply is more flimsy nature, the creditors may be more reluctant to accept the same and the matter may have to proceed to court if you wish to sustain your financial claims and the court would likely test your claims based on the above requirements in terms of evidence

Joshua :

Is there anything above I can clarify for you any further?

JACUSTOMER-aev7qo0c- : I would be able to provide evidence that I have paid the mortgage and all the household bills insurances etc since we have been in this property and in our previous property if it is possible to obtain bank statements from this Te period. As the deposit for this property was paid from the profit from our previous property that was in joint names I am sure I should have some docent action to evidence this. Will this be sufficient to prevent me having to sell the property for my partners debtors to recla the debt he owes?
Joshua :

indeed. Financial documentation of this kind will be extremely valuable in establishing your position. As above, it can be a time-consuming process assembling such evidence particularly going back so many years however it can be well worthwhile exercise to do so simply because every piece of financial documentation you can locate which shows your capital contributions by you to the property will serve to increase your interests in the same

Joshua :

contributions towards outgoings such as energy and council tax and so on of no assistance in respect of evidencing a financial interest in the property. It is capital contributions that are of value such as capital repayments to the mortgage, payments for improvements in contributions towards the original deposit which are key.

Joshua :

Are you happy with the information I have provided to you above or is there anything above I can clarify for you any further?

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

JACUSTOMER-aev7qo0c- : I am still not clear exactly what my position is. Would my bank be able to provide me with statements dating back 25years? Also would all the payments I have made to the endowment elemt to the mortgage be ignored? I am still not clear if my partners debtors could force the sale of the property to claim their debt.is it not possible for my partner to gift me the property. Or could we sell the property and my partner give me all the profit. I really would not want to do this but if this is my only option and I could purchase a house in a cash sale I would obviously consider.
Joshua :

different financial institutions hold records for different periods of time. My initial reaction is that it is unlikely your bank will retain records from 25 years ago however it is not impossible. Unfortunately these sorts of situations require quite often an investment of time in terms of contacting relevant parties to obtain copies of information and reviewing personal records you may hold. Sometimes it is simply not possible to obtain evidence of a particular payment made many years ago

Joshua :

payments you have made to the endowment policy will be counted providing you can evidence that you have made them

Joshua :

the above may be best explained by way of an example. A & B buy a property in A's name for £100,000. Let us assume no increase in value occurs in the property for simplicity. There is a £50K mortgage. B contributes £25K to the purchase price and A the other £25K. B is the only person that pays the mortgage and pays the entire mortgage off over 5 years. A has creditors chasing him for a debt of £100K.

A's creditors look at the property and see that it has no mortgage anymore and is in As name so As creditor claim against the property.

B however can produce a statement showing that he contributed £25K to the purchase of the property and that he has been the only person that has repaid the mortgage of £50K. These statements show that therefore although the property is in A's sole name, in fact B owns £75K of the equity and therefore A's creditors can only claim against £25K.

Joshua :

In this example, A's creditors would have a claim against £25,000 worth of the equity and could seek that B buys out that share alternatively that the property is sold and the equity split 75%/25% in Bs favour.

Joshua :

this is obviously a simple example but exactly the same principles apply to your position and therefore assembling financial evidence is best you can is key to minimising your partners creditors potential claims against the property

Joshua :

Is there anything else I can help you with?

JACUSTOMER-aev7qo0c- : I have been in touch with my bank and they can only provide statements dating back ten years. I copiesxifcthe endowment policy which is in joint names. Will this suffice and if not were do I stand.
JACUSTOMER-aev7qo0c- : I am also not clear if I can sell and keep all the proceedings or if my partner can gift the property to me?
Joshua :

As above you will likely be limited in what you can claim in the property to what you can reasonably proof you have paid towards it. If you can demonstrate that you have been the person that has pays towards the endowment policy then the fact that it is in joint names will not prevent you from claiming the same as yours. ideally, you will be able to obtain evidence that you contributed towards the original deposit in the property however if you cannot find any evidence to support this claim, you may not be able to do so. To be as clear as I can be, the extent of your financial interest in the property is likely to be based upon the evidence you can show to support capital payments you claim to have made.

Joshua :

as regards XXXXX XXXXX payments you claim to have made that cannot prove, it is unlikely that you will be able to sustain the same and therefore your part as creditors will likely be able to claim this portion of the equity in the property.

Joshua :

you would have the option to buy out the creditors interest in the property failing which the creditors could seek an action to force a sale of the property potentially

Joshua :

it is not possible for your partner to gift the property to you because this can be challenged by creditors under the provisions of the insolvency act for a period of up to 5 years from the date of the gift if your partner is insolvent or the gift makes him so

Joshua :

if the property is sold, with your consent, you could keep the extent of the financial interest you Evidence as discussed above over the balance that cannot be evidenced as belonging to you will belong to your partner which in turn is available to be claimed by your partners creditors.

Joshua :

I hope the above is of some assistance. You may benefit from asking a local solicitor or insolvency practioner to assist you in negotiating with your partners creditors though in the meantime, searching your own records for any useful evidence of financial contributions should also bne considered.

JACUSTOMER-aev7qo0c- : Thank you so much for your response. Although my bank can only provide evidence for 7years. Surely the building society who holds the mortgage would have too hold these records for the life of the mortgage
JACUSTOMER-aev7qo0c- : And could provide evidence that the mortgage had only ever been paid from my bank account
Joshua :

Quite possibly yes - though each organisation has its own policy on data retention.

Joshua :

Banks would typically retain account data in relation to debts for the life of the product in the event of a dispute about the debt.

Joshua :

If I were in your position I would be leaving no stone unturned in terms of searching for evidence and the mortgage company may have some very valuable evidence in this respect.

Joshua :

May I assist you with anything else on the above?

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though.

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