:confused: IS EQUITY RELEASE THE ONLY WAY TO GO?

goldie-bambino

Hi,
When my dad was alive he ran up a tax debt of £8 thousand forcing him to declare himself bankrupt. As my mum and dad were at risk of loosing the house to pay off the debt, they took a high interest joint loan (legal loan sharks) using the house collateral.
My Dad died four months ago leaving my mum with this loan which after 10 years of interest is now £20 thousand even though payments have been paid on time every month.
My mum is 60 next month and unable to work so she is left with no way of paying the £180 per month payments.
After seeing a IFA she was told that the only way to pay the loan off would be to consider PART EQUITY RELEASE (house is worth £100 thousand).
As she has no savings and not much income she has decided to follow the IFA's advice and when she's 60 intends to go ahead with the EQUITY RELEASE.
I am really worried that she may be making a wrong decision and will end up with nothing left or more debt.
Please advise me if this is the only way to go and if it is what is the best deal/company to go with.

chevalier

I would suggest that she calls CCCS or Payplan and ask them to go through all the options with her, with you there too if possible. The IFA will make money on the equity release, whereas CCCS/Payplan have no financial stake in the outcome.
It also seems to me that your parents may have been incorrectly advised when they took out the loan as well. But that is another issue.

chev

goldie-bambino

Thanks chevalier
can u tell me who are CCCS.

chevalier

Sorry goldie, CCCS are the Consumer Credit Counselling Service. Like Payplan they are a FREE organisation, that specialise in Debt Management Plans (DMP'S). These are where the company (ie either of the ones above), go through your income and outgoings, and work out how much you have left over at the end of the month to pay creditors. The then liase with the creditors to arrange reduced payments and in some cases freezing interest.

The important thing about this is that THEY DON'T CHARGE the client any money so all your payment to them goes to your creditors. There are other companies that advertise, that take a fee, which of course means that it takes longer to pay off the debt.
Hope this clarifies
chev

goldie-bambino

chevalier wrote:

Sorry goldie, CCCS are the Consumer Credit Counselling Service. Like Payplan they are a FREE organisation, that specialise in Debt Management Plans (DMP'S). These are where the company (ie either of the ones above), go through your income and outgoings, and work out how much you have left over at the end of the month to pay creditors. The then liase with the creditors to arrange reduced payments and in some cases freezing interest.

The important thing about this is that THEY DON'T CHARGE the client any money so all your payment to them goes to your creditors. There are other companies that advertise, that take a fee, which of course means that it takes longer to pay off the debt.
Hope this clarifies
chev

Thanks so much chev
I will look them up today x

goldie-bambino

If equity release is the only way to go what are the most reliable companys?
Anyone tried this and what do you think of them?

goldie-bambino

goldie-bambino wrote:

If equity release is the only way to go what are the most reliable companys?
Anyone tried this and what do you think of them?

help

whatatwit

CCCS may be able to help you with this.
Sorry, I've no personal experience.

Have you managed to get hold of CCCs, there is a link to debt counsellors at the top of your thread.

goldie-bambino

ANY ADVICE WELCOME

thanks whatatwit, ive passed the number to her, not sure if she has rung them yet.

lynzpower

Is the loan in joint names with your mum and dad?

ONly I understood that if you dad has a loan and hes no longer with us the debt dies with him?

Toto

I'm so sorry you and your mum are having to go through this, losing a parent is awful enough as it is without this situation.

How about making an appointment with the citizens advice? That way your mum could take the loan agreement and all paperwork with her and have someone explain it to her face to face. I know I find that easier to digest than having someone give me a load of facts and figures over the phone.

I agree with Lyn please check that the loan is not in your dads name only. I find it amazing that loans can leap up so much, I had an 18k loan which I made over 10k of payments on over the years, when it defaulted it was 19k and I had no PPI.

If your loan does have PPI included try to get that cancelled, that should get the figure down a bit. There is an article around here somewhere explaining how to do that.