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Financial Disaster
(37 Posts)Sorry for the length of this post! My DD and SIL came to see us a couple of days ago to tell us they were 10's of thousands in debt and were selling their home to pay it off. The final straw was a letter to say that the interest paid on their mortgage by the Govt would now be a loan in future. My daughter was disabled 6 years ago (so had to give up her well paying job) but whilst hoping to work again in the future, doesn't know when that will be a possibility. My SIL was forced to give up his job to care for her and their baby daughter who is now at school. They have a PA for one hour a day to assist my DD but she still can't be left for hours a day as she often passes out.
Originally it took nearly a year to get their benefits sorted out so they lived off their credit cards so even when they got a back payment, it didn't cover anything. To be fair, they thought the disability was a short term thing so they probably weren't as careful as they might have been. Since then, they have notched up the cards and bank overdraft robbing Peter to pay Paul.
My SIL wants to start his own business to get out of the poverty trap but also needs to earn enough for paying for care for my DD and DGD so despite wanting to for the past year, he is nervous about losing all benefits and finding themselves in a worse situation.
My Mum and I have looked at ways we could help them with things but we are at a loss. Even if they rent out their house and live with us for a year, they would find it a struggle, not least because my Mum, who has more room for them, will undermine their marriage and parenting every step of the way. I am frantic for them but don't know what is the best advice to give them and I'm hampered by their sense of relief that if they sell their house, they can pay of their debts and start again albeit without enough money to buy another one. Their equity will be eaten up by housing costs if they rent which are exorbitant around here. In all honesty, it would be cheaper for the state in the long run to pay the £200 interest (which is only half the interest as my DD has aways paid the other half plus a payment for capital repayment) than £900 in rent which will only line a landlord's pockets but will be paid in full.
Has anybody got any ideas of what the best way forward is?
here is a link to a government site that lists all the agencies that provide free debt advice.
I would suggest given their complex situation that they do nothing until they have signed up with one of these groups and they act on the best professional advice available www.gov.uk/debt-advice
This is a very old post but I hope this family have now sorted out all their issues.
Eight years is a long time!
MissAdventure
I think the citizens advice would help them to contact every company they owe money to, and offer a very small payment, regularly. Whilst on benefits, obviously, they would remain small, but at least they would all stabilise for now. They need some breathing space to work out the best way forward.
Yes they will, failing this there are other debt advice companies (free not the “dodgy” ones)
Below are link to those we used in the job centre (who should also be able to advise and help)
Christians Against Poverty (CAP)
capuk.org/get-help/cap-debt-help#:~:text=Tanya%3A%20To%20start%20your%20journey,0006%20to%20book%20an%20appointment.
nationaldebtline.org/
www.gov.uk/debt-advice
They can also consider applying for debt control orders, it does affect their credit rating but that’s probably already skewed.
Selling their home really should be an absolute last resort
Ooops, once again I didn’t check the date of OP!
I think seeing OP's reply triggered it for me. Sometimes it can be a poster's name, sometimes just the subject matter itself.
I do try to be vigilant!
Back in the real world;
"Who is eligible for Shared Ownership?
The eligibility criteria for Shared Ownership will differ depending on the housing association, and there are also different rules for England, Wales, Scotland, and Northern Ireland.
However, generally you must:
Be 18 or over
Earn an annual income of less than £80,000 (£90,000 if you live in London)
Not already own a home (you can be an existing shared owner looking to move)
Be unable to afford to buy a suitable home on the open market
Not be in mortgage or rent arrears
Be able to prove you’ll be able to afford the monthly rent and mortgage payments, and have a good credit score"
op's dd and sil do not qualify . Based on her posts.
Either, they are lying through their teeth to OP.
Or......
ButterandJam, my family were not lying to me and as this thread is many years old, the rules may not have been the same. However, they were totally up front with the Housing Society with their circumstances and as my daughter was disabled, they qualified. For a short while my SIL ran his own business to work around my daughter's needs but that was a disaster but he did learn some useful tradesman skills. My SIL got a labouring job with a company through his friend and they were impressed enough with his work ethic that they offered to train him to get his "ticket" so he could work as a subcontractor if he wanted to. However, he quickly got promotion and went on to a salaried job which changed their circumstances entirely.
My daughter was never in mortgage arrears so this was not a problem. They had run up expensive credit cards and they paid these off with the sale of their home. For all her recklessness with money, she would not or could not find it in herself to come to an arrangement with the credit card companies so they could stay in their own home. They sold their home very quickly and lived with me for 6 months whilst their new one was being built. This gave them breathing space.
Eight years on they are thinking about buying their own house again but the properties they live in take an age to sell and their are quite high costs associated with the Housing Association (HA) to do so. It helped them out when they were in a hole but it is still a very one sided agreement and as a New Build, it has had it's share of problems which the HA haven't always been helpful with. On the whole though, they are doing well and I hope they have learned a valuable lesson.
Thank you for all your replies but I probably won't return to this post as it is now history.
Thanks for the update though!
Yes good to hear your update...thanks
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