Please help!

hwalley

Hi everyone,
My mum lives isolated, 200 miles away from me and her grandkids and has been trying to move closer for years, especially as she has no friends and is now practically housebound. She suffered a back injury about 2 years ago and currently can't work and is on Benefits. There is an interest shortfall on the interest payments from the housing benefit of nearly £90 per month.
She is in negative equity on her house which she had on the market for 2 years with no interest from buyers at all.
She also had a stress related breakdown a few years ago and since then can not deal with anything financial as she has panic attacks and gets severely depressed and ill. She hasn't opened her bank statements for well over a year and finally at the weekend after much nagging I obtained access to them via online banking.
I have spent days trawling through and costing everything out and it is quite clear that she is in debt crisis.
Even clearing erroneous DD's out that are obviously unessential, she has a negative cash flow averaging £700 each month.
Some costs like gas, electric, water etc may well be subject to negotiation however with her measly benefit income I don't see a way out.
I think that if all goals are considered, is it worth even trying to claw out of debt and keep her house if really she would be happier down here close to her family and free of the worry of it all. She is worried that if she walks away and goes bankrupt or hands the keys back to her house she will not be able to find a rental property down here and everything will get worse.
She won't take advice herself because she doesn't want to talk about it let alone think about it as it makes her feel so ill.
What can I do to help this woman who has buried her head in the sand and won't come out??

debtinfo

ok question 1 is there any equity in the property

hwalley

It's in negative equity as she bought during the boom

debtinfo

well then presuing you can sort a rental property first for her then there is no reason for her to stay where she is, all debts including the property would be included in any bankruptcy,

hwalley

debtinfo wrote: »

well then presuing you can sort a rental property first for her then there is no reason for her to stay where she is, all debts including the property would be included in any bankruptcy,

Thanks, what would happen in so far as if she opens a new bank account which will have to be up and running throughout the process so that her finances for the new tenancy can go on uninterrupted. If that would be frozen would it still function in terms of rent/benefits etc?

debtinfo

If she sets up a basic account with the co-op or Barclays, providing she has no debts with them, then that should remain open in a bankruptcy. In fact it is a good idea to separate current funds from debts

Ineedaname

Before any final decision is made please take advice from one of the free debt advice charities listed in the Look Here First thread. If your mum signs a letter giving you permission to discuss her finances then you could take that along to the CAB with all the figures/paperwork needed to go through it all in detail on your mum's behalf.