Help for my mum

Kosenurm

Hi there,

My 59 year old mum was made redundant from her job in July 2016, but did not receive any redundancy money due to her very short tenure in the role. She has been looking for work ever since then, but has suffered from chronic back pains over the past 15 years, and has been diagnosed with fibromyalgia which has made finding a job she can do extremely difficult. She has claimed basic Job Seekers Allowance since this time and has no other income. She is currently in the process of being registered unfit for work in order to claim Disability Living Allowance, although this is by no means confirmed. She has £3k in inheritance from her mother who died in December 2016 and is living on this.

The issue is she has credit card debt totalling around £3k, as well as bank loan outstanding balance of £5k. Bills (essential, no luxuries) including flat maintenance payments, credit card repayments and loan repayment (it is a leased flat) total £1000 per month.

She does, however, own her own flat outright (approx 200k) with no mortgage, so was considering equity release. However, the potential releasable amount is low until you are in your mid-60s. Therefore, in order to support her, and hopefully pay off these debts etc, what are the options that I can recommend to her to raise some capital from the flat now, rather than having to wait?

Thanks
Phil

horseymchorseface

Sell and downsize might be an option

ACG

I am not sure you should be looking at securing debt against the house when there is no way to pay it back.

Call up the lenders and try to arrange reduced payments with them. Rearrange the loan over a longer period maybe? Your mum may need to go in to arrears before they open negotiations but securing unsecured debt with no way to pay it back is not a good idea.

As it stands, worse case scenario is bailiffs come and take posessions. Worse case scenario when secured is repossession.