Housing and debt problems, please can someone help me

jellyjem_2

Hi - hope I have posted this in the right place and that someone can offer some advice, I am worrying myself sick with this.

We currently have a mortgage which we cannot afford as my DH has been out of work for the last 18 months and I only work 20 hours a week. We will hopefully be able to stay in our home because we have been accepted for the Government backed Mortgage Rescue Scheme (MRS) but I am terrified something is going to go wrong and it won't go through so I need a back-up plan.

We have a young child so we will be entitled to housing benefit to help pay the rent but our credit rating is shot and we have 2 CCJ's and many many missed payments, we are being chased all the time by collection agencies for old debt but we can't afford to pay them.

If the Mortgage Rescue Scheme does not go through and the house is repossessed how do we rent with such a bad credit rating?

If we do find somewhere to rent can we then go bankrupt without loosing our tenancy as there is no way we will ever be able to pay off all the debt?

If the house is repossessed do they give you time to find somewhere else?

What a mess... I never thought this would happen to us, we have always worked and never had to claim anything before all this and it is just sole destroying loosing everything we have worked for.

debt_doctor

Hi,


If the Mortgage Rescue fails, then as you have a child, you have priority need and therefore should gain some form of accommodation which could be a councils own property or a private rent with bond provided by council - depends upon where you live - but ALL councils have Statutory responsibilities for those in priority need.


Also, beware, that the Mortgage Rescue Scheme ENDS at 31st March 2014.

DD

loveka

You need to phone a debt charity like Pay plan or Step change asap to get advice on your debts.

It could be that if you start to pay just token amounts to them they would be off your back, which would be one less thing to deal with. There are lots if different variables though, so pick up the phone -they are lovely.

Shelter can give advice on housing issues like this.

I really feel for you, what a horrible situation you are in. Hopefully you will be accepted on the scheme- when will you know? Personally I think its awful that housing benefit would cover a private rental probably twice the value if your mortgage payments. To me this rule is not well thought through at all. I know that doesn't help your situation at all, but it makes me mad that people are in your situation with their home at risk while landlords get their mortgages paid by their tenants housing benefit. Good luck, and make those calls

longtermplanner

jellyjem wrote: »

Hi - hope I have posted this in the right place and that someone can offer some advice, I am worrying myself sick with this.

That's what we are here for!

We currently have a mortgage which we cannot afford as my DH has been out of work for the last 18 months and I only work 20 hours a week. We will hopefully be able to stay in our home because we have been accepted for the Government backed Mortgage Rescue Scheme (MRS) but I am terrified something is going to go wrong and it won't go through so I need a back-up plan.

I want to check that you have read up about the 'Mortgage Rescue Scheme' : https://www.gov.uk/mortgage-rescue-scheme/what-youll-get

and http://www.adviceguide.org.uk/england/debt_e/debt_mortgage_problems_ew/debt_how_to_sort_out_your_mortgage_problems_e/mortgage_rescue_schemes.htm

Print those off, read them through with your other half and put ticks, ?s or crosses by each paragraph to say how happy you are with it.

Do not feel this is your only option. There are other options even if they involve you having to move. Clinging to a house at all costs might seem the 'safe' thing to do but it can store up a lot of problems for you in future.

nb I am not saying that MRS is not a good idea for you, just that you shouldn't decide it is the answer to your prayers without going round and kicking all the tyres.

We have a young child

So if your house is repossessed you will be in priority need and will be rehoused by your local authority. It may not be a des res but you and your child are not going to be out on the streets in any circumstances.

so we will be entitled to housing benefit to help pay the rent

actually your entitlement to Housing Benefit is based on your income. You would probably be entitled to it even if you didn't have a child. not relevant for you, but it might be for someone else who reads this thread in the future.

but our credit rating is shot and we have 2 CCJ's and many many missed payments, we are being chased all the time by collection agencies for old debt but we can't afford to pay them.

can you say what your total unsecured debt is and whether you are making ANY payments to the CCjs or any of the rest of it?

If the Mortgage Rescue Scheme does not go through and the house is repossessed how do we rent with such a bad credit rating?

if you cannot find anywhere to rent privately, you will be rehoused by the council. But you can sometimes find a private landlord that will rent to you despite bad credit rating if you go direct to the landlord, not through a lettings agency.

This process will be helped if you can put down a large deposit or if you have a relative who could act as a a guarantor. Clearly in your situation you are unlikely to have a lot of savings, but perhaps a relative could supply a large deposit?

If we do find somewhere to rent can we then go bankrupt without loosing our tenancy as there is no way we will ever be able to pay off all the debt?

Yes. It is very rare for bankruptcy to result in a tenancy ending.

If the house is repossessed do they give you time to find somewhere else?

Eviction will be on a date set by the court. You will have quite a lot of 'notice' from the time the lender starts repossession proceedings. If you can't find somewhere the council will rehouse you.

What a mess... I never thought this would happen to us, we have always worked and never had to claim anything before all this and it is just sole destroying loosing everything we have worked for.

A very large proportion of the country is just a few pay packets away from being in a similar situation to you