Splitting up & Debt

mardatha

My neighbour and her partner are splitting up, and they have a lot of debt. She is asking for advice on what to do next - she has no computer and her phone is broken. We live very rural and the nearest CAB is a wee bit away and has no appts for two weeks.
She just doesn't know where to start as they have a joint bank account and all the payments are due out next week. Partner works and she works but is on sick leave.
Can anybody advise or even point me to a forum where they might cover this?
Just what to do first, who to inform, what to expect, etc. Thanks.

Puzzcat

Hi, I didn't want to read and run but unfortunately don't have the answers for you. Obviously a lot will depend on whose names the debts are in, whether they are secured on the property if they own one etc. I think the best advice you can give her is to make her an appointment at the local CAB so that she can discuss it properly.


Puzz. x

mardatha

Thanks Puzzcat, I've found some websites that help. She says debts and bank accs are all in joint names.

National_Debtline

Hi mardatha


Glad you appear to have found some sources of help. Is it your neighbour or the partner that is going to be moving out of the property - or both, even?


Most of the free advice agencies will be able to advise you as a third party if you give them a call, as they can advise you in general terms without knowing every single specific detail.


Dennis
@natdebtline

mardatha

She will be staying, and I think he is going back home to his parents but not sure. Thanks!

enthusiasticsaver

Certainly it is a good idea for your neighbour to go and see the CAB regarding her situation but in the meantime the best thing for her to do is a statement of affairs (soa) listing all income and outgoings as this will help to prioritise payments if she is in a position to pay any. A word of warning to her is that unsecured lenders tend to be the most assertive about payments because they know they are on a sticky wicket in that they should be put bottom of the list and tell her to take no notice of the threats. Eventually once she knows what income she will have coming in she can make an offer even if it is below the monthly payment. If the debts are joint then her partner is also jointly responsible for them even if he is no longer in the house and that includes the mortgage.


She needs to put mortgage payments or rent, secured loans, council tax and utilities at the top of the list and if she is unable to pay in the interim period while she is sorting things out then tell her to write to them and ask for a month breathing space so she can sort out if she is entitled to any benefits or if her partner intends to give her any money towards bills etc.

mardatha

She doesn't know what unsecured and secured means - and I don't either because we haven't got any debt we use cash for everything as we're pensioners. I know she has a big bank loan.
The next worry is that she needs to leave her job as it entails leaving the house at 3.30am - she called the CAB and they said she wouldn't get any benefits if she leaves her job.. is that right?? She has 2 children still at home, aged 14 and 10. She is currently on sick leave due to a back strain.

Nargleblast

mardatha, a secured loan is one where something of value, usually your house, is put up as security in case you don't repay the loan. If she and her OH have a mortgage on the house, a secured loan would mean if they did not make the payments, the house would have to be sold. The mortgage company would be paid first out of the proceeds, then the loan company would take their share, if enough was left. And the people would be homeless. If however they rent the property then it can't be used as security for a loan. Hope this clarifies things.

mardatha

That's great thanks - she is HA like me, and the debt seems to be credit cards and a bank loan.

National_Debtline

Hi again, thanks for the extra info re: your neighbour - it helps to make our advice more relevant.

mardatha wrote: »

The next worry is that she needs to leave her job as it entails leaving the house at 3.30am - she called the CAB and they said she wouldn't get any benefits if she leaves her job.. is that right?? She has 2 children still at home, aged 14 and 10. She is currently on sick leave due to a back strain.

There is a risk that she could have certain benefits such as Jobseekers Allowance "sanctioned" (i.e. suspended) if she is deemed to have left a job voluntarily. Having to give up work on sickness grounds, however, is a different matter, but I would recommend that she takes some specialist advice on this before making any decisions.

mardatha wrote: »

That's great thanks - she is HA like me, and the debt seems to be credit cards and a bank loan.

In that case this is all very much unsecured debt, and as enthusiasticsaver says further above, it should be at the back of the queue as far as her current priorities are concerned. If that means paying very little - or even nothing - on these debts until further notice, then so be it.


I would guess that your neighbour has her bank account with the same company she owes the loan to. If this is the case, it might be wise for her to open a separate "basic" account somewhere else altogether, and moving her benefits, sick pay etc. across to that new account. This avoids any risk of loan payments being grabbed out by the bank and leaving her short of funds for essentials.


Dennis
@natdebtline

mardatha

Thanks have told her this as well. Now she is asking - if anybody here knows what happens with Sky, Plusnet and BT. They are all on contracts and in the joint bank account. Will they cancel the contracts? He won't want to pay for them if he is out of the house..