Bank Cannot Seize HDB Flat To Recover Card Debt
Q During my previous marriage, I was a supplementary credit card holder. The card has since been cancelled because my former husband and I defaulted on our payments.
Now I have remarried and my current husband has bought a five-room Housing Board flat under his name. The purchase price was $260,000.
He paid $150,000 and took out a bank loan for the rest of the amount.
Recently, he sold some shares and received about $84,000 in his Central Provident Fund (CPF) account.
If I were allowed to put up my name as a joint tenant of the flat, my husband and I would pay off the home loan in full. I have some CPF savings to contribute to that.
But I was told that, due to my credit problems, if I were to include my name on the title to the property, the bank to which I owe money would have the right to seize our property and our household items. Is this true?
The bank has not taken any action, but my former husband has not made any payments over the past two years.
Recently, the bank asked me for payment but I said I was a housewife with no money.
My current husband was married before and has children from his previous marriage.
He is afraid that if anything were to happen to him, his children would claim the property according to syariah law.
What would you advise we do?
A From your query, I am unable to ascertain the extent of your liability to pay the bank as a supplementary credit card holder during your previous marriage.
Assuming that you were liable under your contract with the bank to make payment as a supplementary card holder, the bank continues to be entitled to look to you for payment, together with late payment interest (which would typically be chargeable at about 24 per cent a year) and other related charges.
The fact that you have remarried does not affect your liability.
Therefore, you should contact the bank as soon as possible to work out a repayment plan with reduced interest charges if possible.
Under the Housing and Development Act, the bank would not be able to seize the HDB flat to recover your card debts even if you became a joint owner of the flat.
However, items owned by you in the flat (such as household and electrical appliances) may be seized and sold off to repay your card debts.
If there are items in the flat which belong to your husband, your husband should keep receipts and warranty cards which would prove his ownership of the items in the event that his items are seized together with yours.
As for your husband’s concern about his children from his previous marriage claiming his property, it is difficult to offer advice based on the limited information provided.
Your husband would be advised to contact qualified persons who would be able to advise in detail on such issues of succession and estate planning.
Advice provided in this column is not meant as a substitute for comprehensive professional advice.
Source : Sunday Times - 31 Dec 2006
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