Charge on House after a family death

[orribleal]

My partners father has recently died and it has come to light that there is a charge against the house which my partners mother and brother still live. He took out a loan of �80,000 around 12 years ago and from what we can work out he must have struggled with the repayments and had it changed to a high interest - low monthly payment schemes. When enquireing about how much there is left to pay, we have been told by the bank (Barclays) that the debt is now �170,000. No one in the family was aware of the magnitude of this charge as i'm guessing he didn't want anyone to worry about it. He was paying �350 a month, which her mother is now paying, but the interest per month adding to the debt is more than that. We need to find out firstly whether she has to pay the debt as it is not essentially hers, although her name is on the mortgage of the house. She is on income support. If she does have to pay, would the bank come to a deal over the amount owed as the original loan has been paid and the remainder is interest? What would happen if she declared herself bankrupt in this position? We are all in dire straits and desperatley pulling together to try and sort this out but don'y know where to turn for the best. Any ideas would be greatly appreciated!

[dot.hawkes]

that's not a charge on the house, a charge on the house goes to nthe land registry through a CCJ and the amount freezes. no more interest or charges/fees get added. This is a secured loan on the house, which must have been at a colossal interest rate. is the mother not joint owner, mortgagee on the property? if do she must have signed for this to make the loan secured on the house.

[orribleal]

Thanks a lot for taking the time to post an answer. The problem is, because of all the stress of the situation she can't remember if she did, but im assuming, as her name is on the mortgage etc, that she did. Thanks for your insight into it not being a charge and being a secured loan. Is she therefore expected to pay the debt and would the bank come to a deal?

[CheekyChops]

She will be expected to repay the debt if she signed for it, which she must have done if is secured on the house and the house was in joint names.

As to whether the Bank will come to a deal, nobody can answer that except Barclays. I doubt it but you never know.

Maybe speak to the Citizens Advice Bureau and see if they can offer any advice.

[dot.hawkes]

is it possible there was an insurance built into the loan? possibly there was if it was such a large secured loan, you should ask the loan people to check and ask for a claim form anyway, send them a copy of the death certificate. in on eway, it would be better if a charge on the house was asked for, as this would freeze the intrest and costs

[CheekyChops]

Forgot to add, if she declared herself bankrupt they could make her sell the house to repay Barclays.

[Law Student]

This would make a great exam question orribleal. It's the sort of thing that used to keep me awake at night when I was a student!

Assuming that the house was held as a joint tenancy, this charge can only be enforced against your partner's mother if she gave her informed consent to it. There are various legal presumptions regarding undue influence and what constitutes informed consent. The good news is that it is usually down to the Bank to prove that informed consent was given. So if your partner's mother didn't sign, didn't know what she was signing, of didn't know the effect of it, the Bank will have a hard time enforcing.

Even if the charge is enforceable it might not be in the Bank's interest to sell the house. This is a second legal charge and is subject to the rights of the first legal charge holder (the mortgage company). Is there enough equity in the house to repay the mortgage plus �170,000?

You need to get formal legal advice from a solicitor / CAB / Legal Advice Centre. You should be able to get free advice if on benefit. Good luck.

LS