Help!!!

ausriel182

Hi all, badly need some advice. My partner (we were not married, so that bans me from a lot of stuff I would have gotten had we been married ie bereavement benefits etc) passed away through illness. We had mortgage insurance, but there is a shortfall of £3000 on that which I am paying at £10 a month as I am on low income. I also have various debts I have to repay which were in both our names and which I cant really afford. I have considered bankruptsy, but dont really want to go down that route. I have so many debts to pay (basically comes to around £15,000) that Im not sure what the best way to go is, should I just settle for being strapped for cash for the rest of my life? Have also thought of getting cash on my mortgage but don't have a clue about this. Is it worth it, only having £3000 left to pay? PLEASE HELP

mel12

Hi and welcome. Sorry to hear about your partner.

The first thing to do about the debts is give one of the free debt charities a call for some advice. There are other options besides bankruptcy if you don't want to go down that route (and its probably not a good option if you have a house with lots of equity in it you want to keep).

Its also worth having a look at the benefits checker if you're on a low income, to see if you might be entitled to anything.

ausriel182

Thanks for answering Mel. I already get working tax credits, but thats the only benefit I qualify for. Never heard of the free debt charities tho. Will find out more about theat. The thing is I just keep seeing all these ads saying "free up money on your mortgage" but I know from experience you get nothing for free. Anyway thanks again for answering, much appreciated

mel12

yeah its better to contact one of the charities because they give impartial advice unlike those companies that are trying to sell you something

Ineedaname

Regards the debts, agree with other advice, contact one of the debt charities.

Even if you are working but on a low income you could be entitled to some other help. Although Incapacity Benefit is beng replaced by ESA now, I think you can still make a new claim for Income Support for a while. It certainly doesn't say it's been scrapped yet.

Although you probably won't be entitled to any Housing Benefit as you own your own home, you may get some help with the interest on the mortgage and/or Council Tax Benefit. If you are now the sole adult in the household you should be entitled to a 25% reduction on your Council Tax anyway.

I suggest you ring your local authority and ask about the discount, also ask for HB/CTB claim form and fill in ALL of it just in case you can get help with both.

debtinfo

Hi Ausriel, just to confirm, do you own the house now, if so what is it worth and how much is the total amount outstanding on the mortgage or other secured charges

ausriel182

Hi sorry I didn't reply sooner, have been in touch with c.a.b and still waiting for them to get back. The house is worth around 85,000 - 90,000 and I still have just over 3,000 to repay on mortgage.

NeverAgain_2

Be very wary of the equity release - 'free up money from your mortgage' - schemes.

Many of the providers charge a lot in fees, so you lose a lots of equity and don't get much money back.

A more cash efficient way is to sell the house and buy a smaller one, although I imagine that won't be easy unless you live in an area of very low prices.

ausriel182

Does anyone know if I pay off the 3,000 I have left to pay on my mortgage, effectively making this house mine completely, can I still lose my house through being unable to pay another loan of 6,000 by a different bank from the one my mortgage is with? The 6,000 personal loan is not secured on the house.

NeverAgain_2

...The 6,000 personal loan is not secured on the house...

The risk is the creditor will attempt to bankrupt you to get their hands on some of that lovely equity in your house.

Assuming you don't dispute the debt, the best bet is to pay it.

Turning unsecured debt into secured debt is rarely a good idea, but in this case I would look into borrowing the £6K against the house because you may get a substantially lower interest rate.

Plus you might be able to get a bit knocked off the £6K on the basis your are going to pay it all in one lump.

ausriel182

I'm not disputing the debt, and am willing to pay it. I have had the repayments reduced for 6 mnths to a manageable amount. My real question is can I be forced into bancruptcy by being made to take out a secured loan to repay this, and other debts which I would then not be able to afford, as the total debt comes to 9K and I wouldn't be able to afford the repayments on a loan that big. ie: lose the house.