HeavyHeart, EmptyPurse

VegasKitty

MSE Forum manager,
quite agree.

I have not personally attacked or insulted anyone. I have offered a lot of advice, I have expressed a different opinion to the others that were shown on here, particularly today, it seems. But I'm off home now, so don't close the thread on my account. Its nice to have input from a different perspective & not have it all one sided.

Night all!

January_Embers

VegasKitty wrote:

January Embers,

Yes, I am completely covered for all eventualities, thank you for asking.

I do not believe this. It is impossible to be covered for everything that might happen, you don't know what the future is going to bring.
If you mean you are financially secure then perhaps this board isn't for you.

lucytricker_2

May I elaborate on my earlier post regarding tax:

---

On the otherhand, their selfishness may have serious inheritance tax consequences under the new previously owned assets legislation (schedule 15 Finance Act 2004).

If the parents previously used to own the house, and sold it to your husband (a connected person) but have continued to live in it rent free, then it is highly likely that on death, the asset will be deemed to still belong to the parents and therefore to be part of their estate for inheritance tax purposes. This is of course unless they are paying market rent (which as I understand they aren't).

The implications of a charge to inheritance tax on death are that if the value of the estate is over £285,000 (using 2006/07 rates) then 40% inheritance tax could be payable. This of course reduces the amount that you would be left on the death of the parents.

---

It would be worth looking into schedule 15. Because if the parents are not paying rent and they used to own the asset then they could be effectively evading tax by not paying the income tax charge due on it. If they realised this, then perhaps they wouold be more sympathetic about paying rent, or they might prefer to move somewhere smaller than live in a big house where the incomme tax charge will be high because the value of the property will be high.....

Again, just some hopefully helpful thoughts - do take advice, but if the parents aren't paying the correct income tax, then that is pretty serious stuff.

feel free to email me if you have any questions.

xx

elona

I would consider myself financially secure - at least as far as anyone can be.
But I realise how illness or redundancy can strike anyone at any time and it would take a heart of stone not to feel sympathy for heavyheart who is doing her best to sort things out.

I came on the thread not to gloat or tell somone that their troubles were all of their own making but to offer support and help if I could and I think a lot of us wish heavy heart a resolution to her problems and admire her for not wanting to take the easy way out by declaring bankruptcy.

jesster_2

It's impossible to be completely covered for absolutely every eventuality.

I've worked closesly with debt advisors and CAB and can tell you that 9 times out of ten someone's debt problems start when something unforeseen happens: a relationship breakdown; injury, disability or illness; even the roof collapsing on their extension and it turning out to be the wrong kind of tiles to be covered on their insurance. Please don't think having critical illness or income protection insurance covers you for everything because it sure as hell doesn't.

Yes, lots of people have been stupid in getting into debt. And yes lots of people need a sharp word to snap out of it. But no one's totally immune to debt, and this is a forum for support for people who are trying to get out of it, not a place for social debate about rights and wrongs.

I'm sure if you want to get into a robust discussion of the rights and wrongs there will be somewhere more appropriate to do it.

Stupidspender_2

elona said "But I realise how illness or redundancy can strike anyone at any time and it would take a heart of stone not to feel sympathy for heavyheart who is doing her best to sort things out."

---

I would advise that you visit your local IFA and ask about crititcal illness and income protection insurance, then you will maybe avoid the pitfall of not having any income to pay off outsatnding debt!
Depending on your age/health this cover can be quite cheap and also in valuable in the need for a claim.
Jeester any good IFA will also advise before anything else that you should build up an emergancy fund in a instant account of about 12 times your monthly dsposable income, to meet the "emergency" repairs ect.
Looking at this case it looks like this, it shows the importance of having the correct things in place if thing should go wrong.

all_hours

jesster even if they have no debt when the unforseen happens? We live in a welfare state if someone loses a job or is ill or injured, they can claim benefits to cover their basic living expenses. They can get HB to cover the interest on the mortgage for 9? months. I realise it can take a few months to make the necessary lifestyle changes to manage on a lower income, this would leave most people with a very small amount of debt.

lynzpower

HB pays out for the interest only part of the mortgage AFTER nine months of arrears only.

Benefits would not kick in ( in this case) as OH is working. Quite frankly, anything much higher than minimum wage means income support or JSA isnt paid, as the working part of the couple have to cough up to support the unemployed one.

all_hours

lynzpower wrote:

HB pays out for the interest only part of the mortgage AFTER nine months of arrears only.

Benefits would not kick in ( in this case) as OH is working. Quite frankly, anything much higher than minimum wage means income support or JSA isnt paid, as the working part of the couple have to cough up to support the unemployed one.

Thanks for explaining the HB for mortgages. I've only had it for rented accomodation. What would people be expected to do for the first 9 months, just run up the arrears and wouldn't a mortgage lender repossess before then?

Stupidspender_2

It may sound horrendous at the moment for HH and I sincerely hope that she can work out a solution that’s meets her needs, but...
If you put all HH's assets on one side and the debts on the other then by my calculation she is not in debt at all. Indeed unlike most of us on this thread who actually have much more debt than assets!


The solution must surly be to sell the house and repay the 140k debt, my argument for this is as follows
1, Unless house price increase by a higher % rate than she is paying on the credit card debt then this will save her money.
2, The minimum payment at 2% of 140k I.E £2800 would no longer be payable each month.
This could then be re-directed to renting private or equity share or even buying again, (credit score applying of course)
another option to maybe consider!
The house that Petes family live in could be re-mortgaged at 90% and then turned into a interest only mortgage over say 99 years.
This then means that when the house becomes available it is then sold to meet the capital part of the interest only mortgage.
What’s the benefit in that you ask? well it means that the capital can be taken out of the house now when it is needed and because you repay no capital only interest the monthly payments are relatively small.
This is not intended as financial advice just thinking aloud!