Brothers plight

afriendinneed_2

Having just recently found this most helpful site, I thought I'd post my brother's horrendous plight. Here goes:-

Until August of last year my brother who is 62 y/o was a self employed architectual surveyor. He had already clocked up over £25,000 pounds worth of credit card debts and because of this had just upped his interest only mortgage from £55,000 to £96,000 with the intention of paying off his CCs. So although his finances were not looking too healthy, at least he was earning fees and managing his payments and expenses. Then, out of the blue, he suffered a stroke which affected his field of vision to such an extent that he had to give up his practice overnight. Since then he has had no income other than £59 pw incapacity benefit and £33 pw disability living allowance plus a very small private pension of about £840 paid yearly. We applied for Pension Credit but this was turned down for reasons that are not yet clear. He is still maintaining his CC payments and his mortgage of £450 p/m. I believe his CC monthly payments are around £600 p/m. After his stroke, he decided not to pay off his CCs as he knew he would need all the money he still had from his remortgage. His remaining capital is now down to around £15000 and disappearing at the rate of nearly £2000 a month. He is becoming desperately worried and the very last thing he wants is to lose his flat on which there is about £30,000 of equity. There is nobody, including myself, in the family who is in a position to help him out, apart from my offering him a room should the worst happen and he loses his flat.

We've looked at DMP and view this as a possible partial solution but as he has no income other than his benefits, I'm not even sure that they would take his case on.

All advice will be most gratefully received and considered....thank-you.

littlekitten

Hello & Welcome,

Could you possibly post a SOA (statement of affairs) example at the top on SouthernScousers post, then we can suggest ways to cut down.

also your brother might want to talk to someone like payplan who might be able to help.

xx

afriendinneed_2

Hello & Welcome,

Could you possibly post a SOA (statement of affairs) example at the top on SouthernScousers post, then we can suggest ways to cut down.

also your brother might want to talk to someone like payplan who might be able to help.

Thank-you Littlekitten for your interest. Quite frankly, apart from giving up smoking, there is virtually nothing else my brother could do in order to cut down.....and in his present plight, cigarettes are probably his only comfort! He doesn,t own or drive a car, has a cheap phone provider (Pace) and is with the cheapest electricity supplier in his area (Powergen). I've no doubt he could make small savings in certain other areas, food etc but this would only have a negligable affect on his overall situation.
His chief concern is losing his home; clearly at some stage in the near future he will be forced to cease repayments on his CCs, but as long as he can (somehow) maintain his mortgage payments, do you think his home will be secure?
Going back to his Pension Credit refusal; his original application was based on his then 'savings' figure of £35,000. The government, in their infinite wisdom, assume that each £500 of so called savings earns £1 per week interest. Now that's a whopping 10%....incredible. So they must have assumed he was receiving £70 a week from his 'savings'. The reality is, he is using this so called 'savings' to live on. It is now down to £15000 and should disappear altogether within a few months...then what? At least he should then be entitled to some pension credit based on zero savings and in turn he will be entitled to full council tax rebate. In any event, the prospects for him seem pretty bleak.

afriendinneed_2

Thank you Tustastic. It is most heartening and it restores one's faith in humankind to witness the depth of people's willingness to help others, whilst themselves enduring hardships.
Payplan, I had already come across although CCCS are new to me, so I've made a note of them. I cannot imagine the mortgage company (GE Money) allowing a payment holiday; firstly, the mortgage is on interest only terms and secondly it is GE Money. I suspect that one missed payment would soon become a permanent payment holiday together with repossession.
When it was confirmed that my brother had indeed suffered a stroke and the enormity of the consequences so apparent, one of my first ports of call was entitledto.com which pointed me in the direction of various benefits that he may have entitlement to, neither of us having had previous experience of the world of the benefits system. So far, and despite his obvious disability, the range of benefits available seem surprisingly limited. Please feel free to enlighten me should my observations in this regard be awry.
The fact that my brother does not have a computer and hence the internet, is a distinct disadvantage. He is totally 'computer illiterate', I'm afraid. (Rather like me, except I do have a computer) However, he will be visiting me in a couple of weeks and I have asked him to bring with him details of everything financial relevant to his somewhat sticky situation.
Even my brother would admit he was lucky that his stroke did not render him in a worse condition than his present one; impaired vision is one thing but semi paralysis is another altogether. He is also aware that a second stroke is not beyond the realms of possibility and his continued smoking certainly won't help. In his current predicament however, I can hardly criticise his "What the heck" attitude; I'd be just the same.
His 'original spending' and what drove it is another story altogether, suffice to say it has now stopped. Like many of us, he utterly failed to make any provision for the possibilty of what has now befallen him. In fact, his story, if written, could well be a "What not to do" bible for all of us. But will we ever learn?
Thanks to Tustatic and littlekitten for your replies and to all who have given timeto read to my posts.

joeblack066

Coupla things, apologies if I have missed them in the thread! Did he have any insurances on his mortgage that are claimable on? Second, how much equity does he have? I think that I would sell up, clear debts, and go into rented accomodation that would enable a claim for Housing Benefit.

doitmyself

joeblack066 wrote: »

Coupla things, apologies if I have missed them in the thread! Did he have any insurances on his mortgage that are claimable on? Second, how much equity does he have? I think that I would sell up, clear debts, and go into rented accomodation that would enable a claim for Housing Benefit.

You could have answered your own questions by taking the trouble to read the 4 posts above instead of saying 'I haven't read the story but here's my advice'! Have you moved home? Are you 62, or anywhere near it? Have you had a stroke recently? This guy is all of these, and doesn't want to move home, understandably.

OK afriendinneed, having berated Joeblack, who's intentions were undobtedly good, you need to get professional advice, e.g CAB. The £500/10% thing isn't quite right, nor is it right that anyone should amass some fairly substantial life savings only to see it 'spent' in a matter of months after they suffer a setback
Don't make what could be costly assumptions. All I know is that once that money is gone you wont get it back, and you (he) wont be any better of in 5 or 6 months time having spent his life savings either. Your bro, with your help is in a relatively ok situation right now and he needs to make the most of what he's got and, for now certainly, hang on to it.
My advice, CAB (they helped my mum at one time in her life) first. Maybe CCCS (I don't have any personal experience but they have helped many here).
Stop, think, deep breath, don't be panicked into anytyhing. You'll be fine...

sammy115

I couldn't see it in the threads above (and I have read them) but did your brother have no insurance whatsoever as a self-employed person. I am assuming not otherwise you would have claimed it in the first instance.

GE Money - not sympathetic in any way. whatever you do please try to keep up the mortgage payments if nothing else. They are completely ruthless and will be trying to repossess after just a couple of missed payments.

I can then only say what everyone else has said. Try CAB or CCS, payplan or national debtline.

One more thing seems to be apparent is that he is still spending beyond his means. For his savings to have gone down by £20,000 despite keeping up mortgage payments and cc payments seems to me to be quite extreme. I ended up in a similar position last year. Neither my nor OH in work, no benefits with 4 children but still managed to reduce our debts whilst not incurring any more. He must look at what he is spending by posting an SOA and writing down what he spends every day - at least for a while. I don't mean to sound harsh, but many people on this board manage on a lot less.

afriendinneed_2

I concur with and thank both doitmyself and sammy15 with regard to seeking advice from the CAB. My brother's problem is somewhat beyond tinkering here and there with payment options etc. The CAB must have seen and advised on similar situations before and one assumes they are well placed to offer advice on remedies or at least interim solutions. Sammy15 is correct concerning my brother's lack of insurance cover. On obtaining his remortgage in the middle of last year, he had assumed that he could carry on working until he dropped and that his income would be more than adequate to cover his outgoings, and that the equity in his home would cover his outstanding mortgage. All of this made some kind of sense until a couple of months later came the knock-out blow in the form of a stroke. His reasoning seems woefully shortsighted now, but hindsight tells us all and teaches us little.

RAS

afriendinneed wrote: »

He had already clocked up over £25,000 pounds worth of credit card debts and because of this had just upped his interest only mortgage from £55,000 to £96,000 with the intention of paying off his CCs.

Since then he has had no income other than £59 pw incapacity benefit and £33 pw disability living allowance plus a very small private pension of about £840 paid yearly. We applied for Pension Credit but this was turned down for reasons that are not yet clear.

His remaining capital is now down to around £15000 and disappearing at the rate of nearly £2000 a month.

First off, in the back of my head there was a memory about a £16,000 limit on savings for some benefits, so I thought I would check on entitledto.com.

I plugged in the what I understood from your message above (except the pension), assuming outstanding mortgage of £66,000 and it suggests that he is entitled to Pensions credit of over £100 per week and nearly £8 in council tax rebate.

This really worries me, because if he has not claimed the benefits, he might lose out for the weeks between when you first checked and now. On the other hand, you might be able to back date the claim to when he first applied.

Can you go back into entitledto and run the check again, I may have got this completely wrong? If not, I suggest he gets down the local CAB tomorrow and gets their help filling in the application forms. If he is partially sighted, filling in something 15 pages long wil be no joke. Even if the application is not quite right, this would establish his entitlement from now rather than in two weeks time.

An income of c£750 a month might allow him to maintain the mortgage and then talk to CCCS about his CC situation.

This is not my area, but I am sure that others here would advise talking to his CCs and trying to get the rates down.

Also he definately need to post an SOA when he visits you, as he does seem to be losing rather a lot each month. Many of the folks here have got the T-shirt and would spot the leaks.

peb

Unfortunately neither Payplan nor CCS can assist if your brothers income is solely from benefits - I looked into this recently for a friend. However we were given details (when we telephoned) of a government agency; my friend has foud them useful but they do not have a magic wand. I am at work and do not have the details to hand but if you telephone CCS the details will be available. The only other option that came to mind was possibly an equity release mortgage. It may be worth checking out one of the reputable suppliers - Standard Life, Prudential but I have a feeling that the combination of your brothers age (young) and of teh equity (low) may mean that they will not take this matter on. Good luck.

RAS

A couple of small thoughts:

He may be entitled to the Winter fuel allowance?

Also as he is on benefits he will be entitled to free loft and cavity wall insulation if either are appropriate to his flat?