Marriage Breakup / Debts / Secured Loans / Frightened

Ginnser

Hello everyone

I am trying to help my younger sister who is going through a rough time at present and doesn't know where to turn.

I hope this is on the correct part of the forum.

Her husband has left her and the family home, they have 4 children, 4 of which are under 18.

They have a house, which is mortgaged and I suspect a long way behind with mortgage payments. They also have a secured loan with a 3rd party on the house, again I suspect behind with repayments.

A number of years ago they had issues with keeping up debt repayments with the mortgage company and the secure loan, so at present I am unsure where they stand here.

They also have considerable credit card debts.

She is just a mess at the moment and cant get her head up. I dont live in the UK so trying to do this from afar.

I am having her open all the post and scan it so I can see where to begin.

I would appreciate any thoughts / advice on this and how to best proceed. Obviously keeping a house over their head is first priority.

What should she do? See a solicitor first ? She does not have much income and fears the cost.

Is speaking to the mortgage / secured loan companies herself advisable? or should this be left to a solicitor?

I really fear we will be looking at a IVA here due to the amount of debt, amount to be confirmed when I see her paperwork.

Really appreciate any advice

Kind Regards

sourcrates

Hi,

It depends how many mortgage and secured loan payments have been missed, and how far down the line she is in terms of the house been re-possessed.
Does she have any income of her own ?

It's always best to talk to the lender, see what options are available.

Without knowing more detail, I can't really say any more, but talking to each mortgage lender should be the first step.

As regards the unsecured debt, I would wait and see the outcome of the above first.
Sometimes though, it's best to cut your losses.

National_Debtline

Hi

It sounds like a complicated situation and a lot of advice to go through. Overall it would be best to call a free debt advice agency for advice on the whole situation.

The main things to focus on first of all is making sure she has enough money to pay for her essential living costs, household bills and supporting her family. The unsecured credit debts can wait.

If she isn’t working she should check her benefit entitlement, as she may be entitled to extra help with the council tax and mortgage interest. Her tax credits entitlement will likely also change. At the very least she should make sure she’s getting the single person discount on council tax.

She can check benefit entitlement here, and also check whether she can get some extra financial help from a charity trust fund:
www.turn2us.org.uk

Speaking to her mortgage and secured loan lenders is a good idea to let them know what is happening. See whether they’ll allow her a payment holiday or change to an interest only mortgage in the short term. If there is any equity in the property ask them to capitalise the arrears, which means add the arrears back on to the end of the mortgage. Ultimately it comes down to whether she can realistically afford to live in that property with only her income.

James
@natdebtline

Ginnser

Thank you for both replies.

National_Debtline

Another thing to consider is that she can ask her husband for child maintenance payments. She can get an idea of how much she should receive by contacting the Child Maintenance Options advice service:

www.cmoptions.org

James
@natdebtline

Ginnser

Thanks.

They live in Northern Ireland and I see the National Debtline only covers England, Scotland and Wales.

Do you think its best to have a 3rd party speak to the mortgage / secured loan companies ?

National_Debtline

Ginnser wrote: »

Thanks.

They live in Northern Ireland and I see the National Debtline only covers England, Scotland and Wales.

Do you think its best to have a 3rd party speak to the mortgage / secured loan companies ?

In that case I recommend contacting a free advice agency that specialises in NI specific advice first, just to be on the safe side.

The Citizen’s Advice Bureau have advisers in NI or you can try:

www.adviceni.net/advice/debt/members
or
www.stepchange.org/Debtadviceinnorthernireland.aspx

James
@natdebtline

Ginnser

Thanks James

memecoughlin

Dear Ginnser,

The same happened to my sister 6 years ago. She is only now finding her feet with regards to her financial/ emotional situation (The two are very closely tied together!!). Splitting assets is only part of the problem, splitting debt, owning responsibility for the debt, then taking action on the debt is the most difficult part and will take mediation with her husband at some point or other.

What is tricky is that it feels like one big knot that is muddled up into a big ball, there are so many issues that need unentwining,- (financial, day to day survival, the emotions that involve fear and hatred for the person she once loved who has abandoned her and her children, coping with the needs of 4 young children!!, let alone arranging access to the father). Your sister will not be able to see or think clearly initially, she can only think that she has been abandoned and left to shoulder the responsibility of four little lives. It's the hardest thing for anyone to go through and it has a dark impact on every member of the family. As her sister who is trying to help her out, be prepared for a very rough ride.

We tried going to a solicitor soon after the initial break up, but my sister was still too broken to go through this experience- there was no clear pathway, and she was scared by the solicitor's office and the solicitor's fees. The solicitor advised my sister to go to a family mediator as a first measure. They help couples who are separating to sort out their affairs and draft a separation agreement that stands in court if one party does not fulfil their part of the agreement. The agreement will take into account capital assets, debts, financial contributions from the ex, access to children etc at their fees are more affordable than a solicitor's. Both parties have to agree to mediate.

As it turned out, we didn't need the services of the family mediation service, because I became the mediator (for the financial areas only), access had sort of worked its way out organically. I corresponded with the ex by email and he was happy to communicate with me on the financial way forward which my sister and I had discussed and agreed. We managed to do this in a level way without the correspondence descending into a slanging match. (Not easy). It took 5 years after the break up for this to happen! The timing had to be right. Emotions were too raw at the beginning. However, this length of time meant that my sister was using credit cards to fund her existence and this built up an enormous amount of debt which she is only just taking responsibility for.

Every break up is unique as there are so many different variables- whether you're married or not, what assets you have, debts, number of children etc, how willing the couple are to communicate with each other, how willing the father is to provide for his children... Your role will be to think clearly on behalf of your sister and gather information so that you can guide her. Find out what she is entitled to from her husband in the form of child maintenance and in the form of benefits and to her entitlement to keep the house. (If it goes to court, the best interests of the children will always guide the outcome and so your sister can feel safe that she will not be forced to sell the house). Draft a spreadsheet with all of the income and all of the joint debt liabilities- mortgage, secured loans, credit card debts. Work out the figures- if she goes to either a solicitor OR a family mediation service, they will need to know this information. Do lots of research on marriage separation forums and as you are not local to your sister, try to find a local family mediation service near to where she lives- here is the link to the one that I used, mainly for information on their website more than anything http://www.fmisltd.co.uk

For us, my sister did eventually employ a solicitor to draft a separation agreement but because all of the leg work had been done with regards to mediation, the issues had all been agreed and the fees were less than what they would have been had she asked the solicitor to do the mediating via letter. Also, we knew that my sister's ex would go into attack mode at the first sign of a letter from her solicitor which would have added more pain to the already painful situation.

As your sister is married, she will have more rights than if she were not which goes in her favour. For the moment, she will need to just know that she has a roof over her head, enough money coming in to feed her children and pay the bills. She will also need help either from family members or from paid carers to help with the children.
If she is not able herself to speak to the mortgage company to try and secure a payment holiday or transfer to an interest only mortgage, she may be able to give you the legal authority to act on her behalf to deal directly with the lender. Google Third Party Access and the name of the lender to see how to register.

Once some sense of normality has arrived in her life with regards to surviving on a day to day basis and the immediate threat of losing the roof over her head has been taken away, your sister may then be able to deal with her part of the debt ( the amount to be agreed previously with the husband). It may take a debt management plan, of which there are many, to help her do this.- Payplan, is one, Stepchange is another. If she decides to take on a part time job, she may also be entitled to Child Tax Credits.

There is a very good book called 'Moving On: Breaking up without Breaking Down' which both my sister and I found very useful.

I wish you all the strength for your sister's situation. Once she feels in control of her life again, the sun will shine again but it may take some time.

Best wishes