Helping Parents With Remaining Balance Of Mortgage - Possible Options?

CLAPTON

AHumanBeing wrote: »

Hello, thank you all for replying, I have tried to the write answers to the combined list of questions below.

I think the next step for us is to make an appointment with a mortgage broker and see if they have any options.

I was also thinking about phoning a debt charity (StepChange, etc.) to see if they could offer any options, but I'm not sure if phoning them will help.

How big are the debts?what are their debts?
~100k Credit Cards
~30K Mortgage
~14K Vehicle

how much can they afford to pay
£0

What age and income do they have.
One is in their 50s other in their 60s. Income is ~20k and the other is self employed, I'm not sure what their income is, usually its just enough to pay the mortgage and the minimum credit card payments

what do their credit files say about them? Are all their debts up to date and managed properly and well? Eg no arrears and Ccjs.
I am not sure about their credit files. All their debts are up to date, no arrears or CCJs.

what is your own situation? are you a home owner?
Yes, I own property with my partner

salary?
in the £30-£35K range

credit rating?
Not sure, something I will need to find out.

How much can you afford?
At the very most ~£500 per month


When you say they have 60 instalments left of £800pm do you mean that if they pay the required rate/amount per month then in 5 years time their balance will be nil? Have they got a repayment mortage and the term has 5 years remaining to run?

The mortgage is a repayment mortgage and has 5 years to run and yes after 5 years the balance will be nil.

Why don't you just pay off their other debts and let them carry on paying the mortgage?
My thinking was, pay off the mortgage first then at least they will still have somewhere to live, once its paid off then (somehow) tackle the debt.

can you just confirm the CC debts 100,000? that would usually mean monthly repayments of between 1,000 and 3,000 which doesn't seem possible on the 20k income

Annisele

Has one of them lost their job recently / suffered a substantial drop in income for some other reason?

If not, I'm struggling to make your figures work. If they can't afford to pay anything towards their debts, but there aren't any arrears, how have they been covering their costs up until now?

lonestarfan

It does say £100k on credit cards which I take as £100,000.Gosh.
But perhaps they've made a typing mistake and it should read £10k which is £10,000?

AHumanBeing

Hello, here are the combined questions and answers:

How much is the house worth?
I'm not sure, going by Zoopla I would estimate at >£150,000.

Where has all the debt come from? Has one of them lost their job recently / suffered a substantial drop in income for some other reason?
I can't make any excuses for my parents, unfortunately we/they have to deal with the debt.

14k car debt on 20k income is not sensible.
The vehicle is my (self-employed) parent's source of income.

can you just confirm the CC debts 100,000? That would usually mean monthly repayments of between 1,000 and 3,000 which doesn't seem possible on the 20k income
Yes. ~£100,000. At the moment both parents are earning, one of them is self employed and I don't know how much they typically earn.

If not, I'm struggling to make your figures work. If they can't afford to pay anything towards their debts, but there aren't any arrears, how have they been covering their costs up until now?
I think they are point where they have to do something about it or else someone will do something for them.

getmore4less

Car should be funded from the self employed business
Is that actually profitable?

How much of the cc debt is business related?


From what you have said so far they are in a mess and unless this self employment is lucrative it is sell up and rent time

Annisele

How did you come to the point where you're thinking about giving them £500 per month? Did you offer, or did they ask for your help?

Over on the debt free wannabee board, people talk about having a "light bulb moment" (which those guys usually call an LBM). If your parents haven't had their LBM about their debt, it doesn't matter what you do - your £500 a month will just allow them to spend £500 a month more.

I'm still struggling to make your figures work. No recent falls in income, no arrears, and £100k in credit card debt suggests to me one of two things - either your self-employed parent's income is considerably higher than you think it is, or your parents have been lying (to you or to the credit card companies).

If your parents have asked for your help, and if you actually want to help, then I think you should be pushing for full disclosure of their income as well as their debts. It's possible that the debts are perfectly affordable, it's just that your parents can't afford to repay them and keep spending the way they do.

(I suspect that the actual explanation really is a drop in income, rather than a current high income or any fibs being told - but I think it's difficult for you to help unless you know the full situation).