Pensioner with big debts

mk1golf

Hello, been following and using advice from this site for a couple of years and been a godsend for myself, thanks to all that help run it :beer:

Anyway, time has come where I need some advice........

My mother in Law has come clean about her financial pickle and I'm seeking guidance. She's 64 and not in brilliant health, but manages to plod along in a part time job earning £203 a month after tax, on top of that she gets £127 state pension per week and a pension from her deceased husband of £177 a month. She owns her own home with no mortgage, but does have a credit card with Lloyds TSB with just over £13000 owing, apparently she has always owed a lot on her credit card, but it has been creeping up since her husband died 3 years ago, due to reduced household income. The credit card repayments are £265 a month, with £205 being interest, the sole reason for working is to pay the card, but her health is getting no better, so cant see her continuing to work for much longer.
I've been told a little about approaching the credit card company through a solicitor and requesting they put a charge on the property, with a clause that they cannot force a sale or charge anymore interest on the amount owing, is this a wise route to take, or someone know something better?

tigerfeet2006

Hi and welcome to the board.

Your first port of call should be to contact one of the Debt Charities; see links below. Their services are free; they have no vested interest to serve; their advisors are professionally trained and the advice they give will be objective and in your best interests only.National Debtline operate an advice on first phonecall system CCCS operate a system of telephone appointments that are designed to be flexible and don’t require you to attend an office based interview. At the CAB you will need to make an appointment with a specialist Financial Advisor; other advisors may not have the specialist knowledge you’ll need.

http://www.cccs.co.uk/

http://www.nationaldebtline.co.uk/

http://www.citizensadvice.org.uk/index.htm

If you’re advised that bankruptcy is the most suitable solution to her financial problems then we can offer the best support and anecdotal advice that you’ll find anywhere on the Web.

Read as much on here as you can, starting with the Bankruptcy Help sticky and that will answer a lot of your questions. But don't be afraid to ask about anything you don't under stand.

http://forums.moneysavingexpert.com/...html?t=1056083

Just remember, as desperate as she may feel at the moment, we have all experienced what she are going through at the moment and with the right support and advice things will improve. It’s not an easy route to take but it is a route that will put her back in control of her life rather than just reacting to events.

I would not look at getting a charging order at all. Get advice from one of the charities.

mark55man

mmm - I feel for you reminds me of my own situation many years ago

I can't really add anything to above - just that there seem to be an increasing number of similar posts on this theme, so the charities should be well versed.

one thing you might think (and not saying you should or aare obliged to) is whether your OH (or you) could support her a little to take the pressure of her to work so many days -

depending on how many siblings there are and on how willing they are to help this could be very helpful (so long as your MIL wasn't going to increase her spending).

You might also check whether she could shift the balance onto a low rate card - with a paid off mortgage not really a credit risk

mk1golf

Thanks for the advice, just been on cccs site and flled in the form, but will have to ring them tomorrow night, they went home at 8pm

we did think about transferring to low APR card, but apparently owning your home outright with no mortgage doesn't score well and her income is too low to get that sort of credit, bit of a catch 22....

Will get back and tell you what cccs advise tomorrow night

tigerfeet2006

All the best with it all.

Let us know how it goes.

mazzatee

HI mk1

Has your mother in law thought about equity release - this could allow to release some of the value of her home and clear all her debts. This is a tricky area to deal with and you should look at getting expert advice. You said you are contacting CCCS they should be able to discuss this with you and refer you to another company who can help with this.

As she owns her home bankruptcy is NOT the option for her otherwise the house could be sold to pay off the creditors + the OR's costs

mark55man

i thought about suggestig equity release, but i thought they were very out of favour as the financial scam merchants have made it a nighmare.

its not really living expenses the OP was worried about but repaying the loan - and needs to find a way of making that cheaper for MIL

SouthCoast

Information from the FSA about equity release can be found here:

http://www.moneymadeclear.fsa.gov.uk/pdfs/equity_release_ink.pdf

Trom

mk1golf wrote: »

we did think about transferring to low APR card, but apparently owning your home outright with no mortgage doesn't score well

Is there something very wrong with credit scoring or is it just me.