Friend in dire financial situation

FarmerGilesUK

Hi all

Just been speaking to an old friend who is in a really bad way financially. She's just lost her job and is terrified about what the future holds. She fully intends to get a job asap but as we're all aware, its not as easy as that in today's climate.

Last year she bought her own flat (leasehold) with an inheritance, a very modest 1 bed flat, nothing fancy. Money has always been an issue for her, but with no rent to pay things were looking up.

Now, she has no income except for job seekers allowance (brief summary below).

The biggest worry for the moment seems to be that she owes £700 in maintenance payments for her flat. Benefits agency are covering her ground rent. She's terrified that if she doesn't pay up she'll be made homeless.

She has no surviving family and only one or two mates so not many options.

Benefits summary

Council Tax Benefit £11.48 per week
Jobseeker's Allowance £67.50 per week

I have no knowledge of what benefits are claimable, although I have run the Direct.Gov benefits checker for her. So a couple of questions:

1. What happens if she can't/doesn't pay the owing maintenance payment, could she really get chucked out of the flat she owns?

2. Is there anything else she might be able to claim to help in the short term?

3. Any help anywhere else?

She has only a couple of hundred pounds saving so not good really.

Regards all

anewman

FarmerGilesUK wrote: »

2. Is there anything else she might be able to claim to help in the short term?

A hardship loan may be possible. But repayments are then taken from benefits - so it's not ideal.

inspirespirit

does she have any family? Just wondering if she could move back in with parents for 6 months and rent her flat out to cover costs and also whilst she looks for another job.

Is she getting Income Support? If she is getting Housing Benefit and Council Tax I assume she is.

She should be able to get a Budget Loan from the Benefits. Around 340 pounds is payable back at about 11 per week. That plus the couple of hundred she has may get the Maintenance payments off her back.

Is the Maintenance Payments not part of the Ground Rent, in which case, would come under Housing Benefits, I think.

Anubis_2

She has no surviving family. I would think a budgeting loan is the only way forward. It will come off her benefits though.

FarmerGilesUK

No family at all, all dead sadly. I don't know about Income Support (She is getting job seekers allowance, are they not the same?)

She led me to understand that she can't get the maintenance payments under housing benefits.

The loan may be an idea. She doesn't aim to be unemployed long so short term solutions are helpful - thanks

I did suggest leaning on a friend to put her up for 6 months so she could rent her flat out.

Is there anyone at a Citizens Advice that she could see (financial advice etc)? At the moment she's so depressed that suggestions are not being taken in really.

Regards

skintandscared_2

I don't believe that if she owns the flat the management company will actually be able to turf her out just because she hasn't paid the maintenance payments. I'd imagine the worst that could happen would be they would pursue her for payment, maybe agreeing to a payment plan? The amount involved sounds like a (hefty!) year's payments.

When I owned a flat, some people were WAY behind with their maintenance payments, but the management company had no actual power to turf them out.

clemmatis

Leaseholders are normally classed as houseowners, and service charges normally wouldn't be paid.

I suggest your friend does try to see someone at a CAB or a Law Centre,

http://www.lawcentres.org.uk/

http://www.adviceguide.org.uk/

http://www.direct.gov.uk/en/Dl1/Directories/UsefulContactsByCategory/Governmentcitizensandrightscontacts/DG_195356

edit I just saw skintandscared's reply. Yes, that's right.

skintandscared_2

clemmatis wrote: »

Leaseholders are normally classed as houseowners, and service charges normally wouldn't be paid.

I suggest your friend does try to see someone at a CAB or a Law Centre,

http://www.lawcentres.org.uk/

http://www.adviceguide.org.uk/

http://www.direct.gov.uk/en/Dl1/Directories/UsefulContactsByCategory/Governmentcitizensandrightscontacts/DG_195356

edit I just saw skintandscared's reply. Yes, that's right.

Yes - homeowners of leasehold flats usually pay maintenance payments for the "common parts" for decorating, lighting, gardening, windowcleaning, etc. Plus buildings insurance. But the managing agents have no legal right to repossess property or kick you out. They can only pursue for payment in the same way an unsecured lender could.

clemmatis

skintandscared wrote: »

Yes - homeowners of leasehold flats usually pay maintenance payments for the "common parts" for decorating, lighting, gardening, windowcleaning, etc. Plus buildings insurance. But the managing agents have no legal right to repossess property or kick you out. They can only pursue for payment in the same way an unsecured lender could.

Yes. But I strongly suggest the OP's friend gets advice on how to handle any "pursuits". (I was a London leaseholder.)

FarmerGilesUK

@Skintandscared (and others) - Thanks for clarifying that one. The issue of being chucked out is terrifying her - she thinks she will have to use her savings and first month's benefits to pay off the service charge leaving £30 to last the month (really NOT doable). I'll advise my friend to go see one of the advice services asap.

Living on such a low amount will be tough but I suppose its meant to be just possible in the short term.

Ames

I think you need to look at the DFW board to get advice on how to treat the maintenance arrears as an unsecured debt.

Basically, while she's on JSA her income isn't high enough to cover debt repayments, so she needs to make an arrangement to pay a nominal sum (probably £1 a month) until she gets a job and can make an arrangement to pay which will clear the arrears in a reasonble timeframe.