debt and unemployment advice please

shelob

hi guys,
thanks in advance for listening to me, and apologies if any of my questions have been covered before - i don't have much time at work to read through all the threads :-(
here goes:

my friend has just split up with his wife. they lived in a house and the mortgage is solely in his name. He has moved out and she has moved her boyfriend in (!)
My friend agreed to sell the house to his wife, and in turn he would be able to pay off all his debts with the money they made . His wife had a mortgage agreed, so my friend quit his job and moved to a different area with me as his flatmate. He thought he would be able to take his time looking for a new job because of the money he would get from selling his house. (£10K each after all debts had been paid)

However, his wife's mortgage fell through at the last minute (when we had already moved) and so she applied for another one, which she said was going through and that also fell through. She has now told him that a third mortgage is being approved and that there is no reason why this shouldn't go through fine.

I am very sceptical about his wife and whether she will actually buy the house. If she can't buy the house then he needs to put the house on the market, but it will take a few months to sell.

In the meantime, each month he has outgoings of:

Mortgage - £600
Rent in new place - £420
House insurance - £25
car insurance - £25
life insurance - £14
Argos store card minimum payment - £25
Lloyds TSB credit card minimum payment - £200
Egg loan - £300
Egg credit card 1 minimum payment - £100
Egg credit card 2 minimum payment - £100
Bills new house - roughly £80

TOTAL - £1,889 per month
of which his wife is paying the £600 mortgage.

All these credit card and loans debts are SOLELY in his name, and his wife says she can't get any other money together to help him pay for them.

My friend doesn't have a job, so if his wife's mortgage doesn't go through he will have to find at least £1,200 each month until he sells the house. He is currently going to take any work he can.

My questions/doubts are:
- can he do anything about transferring those debts to better deals when he doesn't have a job? Or if he has only been in a job a few weeks?

- is there a way of contacting the people he owes debts to to get help with lowering minimum payments WITHOUT affecting his credit rating?

- can he remortgage and therefore pay off his debts when he is unemployed?

i assume that the answer to all these questions is no! He really doesn't want to have to declare that he can't pay these debts to the companies he owes to, as he wants to keep a half decent credit rating.

I am thinking about taking out a loan in order to help him to clear some of his debts because i would be able to get a good deal loan and i am on £25,000 per year and have a good credit rating. People (work colleagues) have advised me not to help out my friend, though, as this involves a lot of trust in him repaying me.

I'm sorry if you think i'm jumping the gun and that i should wait for his wife to get her third mortgage proposal approved - it's just that in a few weeks' time he is going to have to pay all those debts otherwise. He now has about £100 in the bank!

Many thanks for any advice you can give xx

lynzpower

OK a few things

1) he needs to sign on for benefits
2) he needs to instruct an estate agent to sell the house he clearly cannot afford to be paying that and the ex-wife and her boyf dont seem to be forthcoming
3) once he is signing on or in a temp job he needs to try adn get a DMP and organise token payments ( see CCCS link at the top of the page)
4) once he has sold the house, then he can use this money to pay off his debts. Chances are that the debts will be sold on, and this may mean he might not have to pay ALL the balance as he can offer full & final settlements
5) clearly the wifeys creit ratings not the best, and being refused for 2 mortgages certainly wont have helped
6) whatever you do dont get a loan in someone elses name, extra debt isnt the answer in any case, but we see plenty of horrror stories on here. theres no legal way of getting the moeny off him if he chooses not to pay you back .

shelob

thanks!
so really he needs to come up with the repayments in between now and the time that he has been in work enough to apply for a remortgage.

lynzpower

I tihnk this mortgage idea might have to be put on hold. He can write to his creditors and give them a quid each until hes more on his feet, or the house is sold.

shelob

lynzpower wrote:

I tihnk this mortgage idea might have to be put on hold. He can write to his creditors and give them a quid each until hes more on his feet, or the house is sold.

sorry if i sound really thick - it's because i'm clueless when it comes to these kind of things!!
that would really affect his credit rating, wouldn't it?

all_hours

How long does he think it will take him to get a new job?

Does the loan have any possibility of a repayment holiday? Sometimes you can have a 1 to 3 month break if you've paid at least 6 or 12 months continuously beforehand. He should look at the loan agreement and see.

I think the first thing is to contact the creditors and explain he's out of work at the moment and ask them all to hold or reduce payments. Doing this won't affect his credit rating - but if they refuse and he can't pay he'll start getting reminders and eventually default notices and this will affect his rating.

shelob

all_hours wrote:

How long does he think it will take him to get a new job?

Does the loan have any possibility of a repayment holiday? Sometimes you can have a 1 to 3 month break if you've paid at least 6 or 12 months continuously beforehand. He should look at the loan agreement and see.

I think the first thing is to contact the creditors and explain he's out of work at the moment and ask them all to hold or reduce payments. Doing this won't affect his credit rating - but if they refuse and he can't pay he'll start getting reminders and eventually default notices and this will affect his rating.

thanks - that's really handy to know. he's not been contacting them because he thought it would affect his credit rating.
i'm sure the loan would have a holiday repayment if it doesn't affect his credit - i will look into it with him tonight.

shelob

all_hours wrote:

How long does he think it will take him to get a new job?
QUOTE]

sorry - i didn't answer this. he's willing to take any job at the moment so should hopefully find one within the next couple of weeks.