Mother in law in desperate financial situation

debsley_pig

I wondered if anyone could give any advice. I am desperately worried about my mother in law. Her situation is as follows:

She is 58 years old. Being made redundant from a call centre. Will be paid up until end of Oct. Will get some redundancy money and is also soon to get some inheritance money. These will need to be used to pay off some personal debt she has accrued.

She has a mortgage that should be about £500 per month (is a short term mortgage until she is 65!!) She has recently reduced this to interest only payments.

She needs to get another job that is relatively well paid (about £16-17K). But she has had incredibly poor attendance in her current job (like about 5 months out of 12). This is in part due to bad health, but she does also take the p***. So, she will have to declare attendance on any job applications.

If she sold her property, she would have a lot of equity (only has about £40K to pay off), but she would then have to rent which is about £6-700 per month around here, and so would still have high outgoings.

Could she get any sort of equity release, home reversion plan? Or is she too young?

I have suggested that she could sell up and invest her equity in an established business and find something that she would like to as well as getting a decent income.

I just can't see a way out for her, with the exception of winning the lottery. None of us can help as we all have young families and are only just keeping our heads above water. We also don't have room to take her in and please don't suggest a granny annexe. We want to help her, but not that much!! BTW, she is on her own.

Any advice or pointing in direction of advice providers would be muchly appreciated. Thanks in advance. Debs.

*zippy*

Hi Debs

Will she be debt free besides the mortgage after she has used the lump sums?

Could you find out what benefits she will be entitled to and see if you can do a budget for her that will cover everything. This website is useful

http://www.entitledto.com/

Also have a look at the debt free wannabee board on here

http://forums.moneysavingexpert.com/forumdisplay.html?f=76

There is a sticky near the top that says first time posters, there is alot of information in there on where to start. Including links to debt charities that will not charge your MIL for advice and help.

Best wishes
zippyx

ailuro2

Sit down with her and go through what she has coming in an going out- see how many inroads she can make between now and October.

Use the money to get rid of her highest interest debts first,then the lump sums to get rid of as much of the mortgage as possible.

Show her the old style board here- loads of people living old style and saving heaps of money.

RogerPang

Hello debsley pig

Aside from the budgetting advice already posted, the answer to your Equity Release question is that some firms do have such products for ages 55 and upwards.

Equity Release is a complex topic where you / your mother definitely should have advice as it isn't right for all and there are many alternatives that should be considered - one firm with an advice service recently recommended in a recent Yorkshire Post article was Saga (you don't have to be a member) - the telephone number is 0800 015 6256.

Thanks.

mountainofdebt

Another thing to remember is that by going for an interest only mortgage (even in the short term) means she is effectively renting but with the mortgage company being her landlord. She needs to think about how she will repay the outstanding mortgage at the end of her term.


Would she be prepared to rent out a room - not sure of the amount but she could receive over £4k without having to declare it to the taxman.

debsley_pig

Thanks for the replies. Just to respond to the points raised. She should be debt free apart from her mortgage once she gets her redundancy and inheritance, although it is in some doubt as the company are trying to pass her off with a lower amount for redundancy pay because of her age.

We have gone through all her finances with a fine tooth comb with her and given her lots of advice on how to reduce her outgoings.

Unfortunately, she can't rent out a room as she lives in a 1 bed property!

I will pass on the phone number of Saga to ask for advice on the equity release. I will also double check her benefit entitlement, although I used to work for the job centre, so I am pretty knowledgeable about what people are entitled to.

The main problem is just whether she will be able to have any money coming in at all to pay her mortgage (or rent if she sells up), bills, plus food, petrol etc. She has had dire attendance at work for the last couple of years and her age also may go against her. Plus, she has just been working on call centre telephones for the last 8-10 years, so there may be lots of jobs that pay decent money that she just doesn't have the experience for.

Anyway, I am sure the situation will resolve itself somehow. Thank you for all the advice.