I have a repayment mortgage with the Halifax for £26,000 on a flat worth £9,000 thanks to Telford & Wrekin Council!! (long story) I want to sell the flat under the "Power of Sale" scheme offered by the Halifax, as the flat has been empty for 5 years now, and I live with my husband in our new house. My concern is, can we be forced to sell our new house to release the equity to repay the shortfall on the flat. The flat mortgage is in my name and the house is in my husbands. Both mortgages are with different lenders.

-- debbie derham (ddebmaryk@aol.com), March 12, 2001

Answers

Debbie,

There are quite a few posts way down the Q&A Board which refer to this issue. I'm no expert, and I'm not sure I have fully understood your posts, but my understanding is that if an alleged shortfall is in the sole name of Person X, and they live with (or are married to) Person B, in a home owned by Person B (i.e. Person B is the only name on the deeds), then no 'charge' can be made on the property of Person B.

What will happen, usually, is that Person A will be sent an Income and Expenditure (I&E) form, and this will ask for details of Person B. Neither person has to give this data before the debt is proved, and it is debatable whether Person B ever has to give this data if they don't want to do so.

The Information Commissioner (formerly the Data Protection Commissioner) has indicated that any attempts by a lender or its agent (eg a solicitor or debt collector it employs) to suggest that an ex borrower is legally required to divulge the personal details of a partner who was not party to the mortgage ( a 'third party') would be a breach of the Data Protection Act.

A person who DPA rights have been breached, and who has an 'Assessment' from the Information Commissioner saying so, can sue, I believe.

Have you considered approaching a CAB or Law Centre for advice?

-- Eleanor Scott (eleanor.scott@btinternet.com), March 15, 2001.

Sorry, I appear to have become algebraically challenged in my previous post.

X = A.

-- Eleanor Scott (eleanor.scott@btinternet.com), March 15, 2001.

Notwithstanding the above, the area for concern, and I would urge you to talk to the CAB, is that by not giving details of your partners income etc, the building society will try to take a larger percentage of your income towards the debt than they would otherwise. They will try to justify this on the basis that you are using your income to contribute towards the household(and to building up an asset (the house)) rather than to repay monies owed to them. They'll argue that despite you not being a signatee to the mortgage on the house, you would benefit substantially if that asset was realised (for example if you were to get divorced).

You certainly can't be forced to sell the new property to release the funds to repay them (it's not yours to sell, or therefore to be ordered to sell), but you may get hit with high repayments.

-- Andy Turner (andy.turner@ramesys.com), March 20, 2001.