At Alan McGee and Co., I have been trying to expand the boundaries of Personal Insolvency to incorporate holistic solutions for debtors who are a party to relationship breakdowns and, as a result, find themselves remaining tied together through joint ownership of a property and the joint debt liability.
I have utilised the provisions of the Family Law Acts in tandem with the Personal Insolvency Acts to achieve solutions whereby, through Family Law proceedings, we can sever the title to a property and allow one party to come off the ownership of a property while using the Personal Insolvency Acts to sever the liability for a debt.
This has been achieved in many cases to date and has proven to be a groundbreaking treatment for individuals in such instances. This approach was referenced in the Government’s Mortgage Arrears Review Group published in September 2024 (see page 66).
The difficulty heretofore has been for those who have not been married or who were in a relationship, but whose relationship ended before the enactment of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (the Cohabitants Act), which provides rights for participants in long-term cohabiting relationships who have not entered into a civil partnership or marriage.
These individuals were in a limbo, as the ability to use the Family Law Acts to remove them from title did not apply to them, and creditors would not consent to taking someone off title and off a mortgage through an informal solution.
Happily I can advise that in a recent the case where a couple who had been in a relationship that ended before the Cohabitants Act and who remained on title and on the mortgage we were able to propose interlocking PIAs which provided for one party to come off the ownership of the former family home by way of a transfer of title and also to come off the mortgage thus allowing that person to move on with their life. The other party would then take full ownership of the house and restructure the mortgage, as to their means within their PIA.
This was achieved following extensive engagement with Pepper Finance and shows what can be achieved. It should be noted, however, that each case is treated on a case-by-case basis, and such a solution can only be achieved when the facts of the case support the solution.
Before this case I had a successful outcome with Pepper Finance earlier on this year on another matter whereby a married couple were granted a Decree of Divorce that made a Property Adjustment Order in respect of one property of the marriage in favour of the wife and the husband dealt with the joint debt and other properties in a PIA that ultimately saw the wife come off the mortgage and retain her home debt free.
The disposal of certain properties while retaining a home for the husband and the restructure of the debt in accordance with his means was in a manner that was satisfactory to Pepper Finance. Both parties were restored to solvency and retained a home for each.
In both these instances, the solutions were achieved following extensive engagement with Pepper Finance, who must be commended for the positive approach adopted in each case.
It will have to be noted also that in each of these cases, the debtors adopted a positive approach towards the debt and engaged fully with the creditor. The debtors brought their total means to bear to achieve the solutions.
It is through more collaboration between the different strands of the Law that holistic solutions can be achieved and more people can be helped.
If you’re facing joint property or debt issues after a relationship breakdown, contact us today for a confidential chat.