I Uregently Need To Help My Sister

snapang

Hi
This is the 1st time I've posted on the site. I need to help my sister & I know that there's people out there who will be able to help me do this. I haven't been able to sleep with worry & don't know how to advise her best. The following is where she is up to (she has only told me about this 48 hours ago).
We live a £20 train journey apart so are in touch by phone & text - she doesn't know how to use a computer. She was widowed 11 years ago and has 1 son, school age, still at home. She owns her house outright (value about £80,000).
She owes £31,000 on 2 credit cards, a bank loan & a £1000 to our mother (who knows nothing of this). The repayments are £685 per month altogether. (She hasn't paid anything back yet to our Mother who is expecting £100 a month off her - she's now 2 months behind). She has 2 jobs, widows pension, child benefit and tax credit - this comes to £1,051.
She has had a meeting with an Independant Financial Advisor (recommended by a friend) who has put 3 options to her - IVA (I think the answer should be no), take out an interest only mortgage (once again I think not), and to take out a capital repayment mortgage for 16 years (she will then be 65) - she has agreed to this in principle. Repayments will be about £320 per month - he has then mentioned to her about having mortgage protection insurance & life insurance (no costs of these were discussed - these are a concern of mine in case she's getting ripped off). I am worried that she would not be able to keep up these payments and would lose her home.
The position this morning is :
I gave her £2000 yesterday (this is all I had without getting into debt myself) - she has paid her utilities bills up to date, has paid this months repayments, got some food shopping in & bought a present for older son. She has £760 left.
I am trying to contact CCCS by phone in an hour (hoping they will be open) to try to make a 121 appointment for her. I'm also pretending I am her on their website to try & get advice that way if they are going to be shut.
One of the debts she says is 'referred' - a company called Triton are dealing with it - they keep asking how she is going to pay them - she's made 2 payments of £100 each the last 2 months. She says they are due to call Monday asking for the money.
Is there anything else we could / should be doing?
I'm so frightened her & her son will have the home taken off them.
Thankyou all for reading & listening.

Candy0107

Hi,

Someone more experienced will be along soon - this forum is very busy.

I agree with you on the IVA. I have been an a Debt Management Plan with CCCS for almost a year, and it is the best move that I could make.

When you call CCCS, they would be able to advise the best situation for your sister, and possibly how to slow any action being taken.

Well done on listening to your sister and helping her out - I am sure that it it makes her feel really good having someone to listen and help her.

fletch3163

Hi there and I'm sorry for the plight of your sister (and you). It must be terrible for you to hear this for the first time, and especially at this time of year but I'm sure your sister feels a bit better knowing she's shared with you.

I'm always surprised to hear people talking to independent financial advisers in debt situations. In my experience an IFA advises on financial products, not debt management. Is there such an IFA out there who can advise on IVAs and mortgages and bonds and ISAs and all other investment vehicles?

The mention of life cover doesn't worry me actually because I think most lenders need some for of insurance to get their money back. The payment protection plans on the other hand are a matter of personal taste. I know people who have put them to good use but me personally, I'd rather wing it.

Your sister's situation is a shock to you but not unsalvageable. Thankfully she has no mortgage so she has something to draw on if it gets drastic. I think the problem of WHY it happened needs addressed to be honest. She can get out of it now but what if it happens again?

I wish you the best of luck. There will be others soon who will give you specific advise on what IVAs, etc actually mean. It's all double dutch to me

snapang

Thanks so much for the reply. I've just called CCCS - they are closed for Christmas - I will call immediately that they re open to try & get an appointment. I'll go back on their website to see if I can get more info there.

snapang

Hi Fletch3163
Thanks for reply - yes, I am concerned how it has all occurred - it seems such a lot without being able to actually see where it has gone. She had booked to go on holiday this coming March (holidays are where a lot of the debt has been incurred but I feel uncomfortable about making any judgement about it) - she agreed with me last night that she needs to cancel this immediately.

Gemmzie

With an income of £1051 a month and no mortgage/rent payments she should be able to cut things down enough to do a DMP.
The best thing would be to get her to work out a solid budget, as that's the first thing that CCCS will do. Then see how much she has left for her creditors.

splishsplash

Hi Snapang,
I would hold off the mortgage for the moment - the credit card debt is unsecured, and with a debt management plan, could probably be managed. A mortgage would be a debt secured against her house, and if she didn't manage to keep the repayments up to date, her house would then be at risk.
Is the loan secured? If so, she needs to be diligent about keeping up to date with it. She could phone the credit card companies and ask them to freeze or at least lower the interest rates and reduce the repayments.
Is there any way she could post her SOA - or could you do it on her behalf?
If she doesn't start tracking where the money went, it's unlikely she'll be able to change her habits.
I think you should advise her to hang tough until she gets to speak to one of the free advisory agencies in January. In the meantime, you could encourage her to get her figures together to see exactly what's happening to the money every month.
Good luck, I hope your sister realises how lucky she is to have your help!

rog2

Hi Snapang, and welcome to DFW - your sister is very lucky to have a brother who is willing to help.
First of all she needs to 'ditch the Independent Financial Adviser' or at the very least put him 'on hold' until she has spoken to one of the Debt Counselling Charities, such as CCCS, National Debtline or CAB. There are links to these organisations at the top of the page. Their advice is Professional, Impartial and FREE, whereas the 'IFA' is, quite naturally, going to look at the solution which will suit him best, as far as commissions or charges are concerned.
A £31k debt is most probably manageable without the need to resort to an IVA (which could result in Bankruptcy if it fails and would probably net up to £8k for the 'IFA' whether it fails or not) or, even a 'remortgage' which would, probably, not be offered on the most favourable terms for your sister, yet would, again, earn a nice commission for the 'IFA'.
Tell your sister that debt is not a crime - it can be dealt with - and to be very wary of the 'ambulance chasing' industry of scavengers whose only concern is how to 'profit' out of her situation.
Posting a full Statement of Affairs, listing income, expenditure and itemising her debts, will be a very good first step as this forum is packed with people who have probably been in similar circumstances and who will be quite happy to share their experiences with your sister in the hope that she may benefit from them.

Good Luck.

snapang

Hi All
Thanks for all the replies & advice - she is feeling much better about things. We are now waiting for CCCS to re-open to make an appointment to get advice. We are going to try every option before we arrange anything that is secured against the house - all debts at the moment are unsecured (thanks goodness). All crediters are up to date for another couple of weeks so that gives a bit of time to get things sorted. Today she is starting her SOA to get herself more organised. I will post it up once she's given it to me. Thanks again guys.:beer:

SortingIt_2

Hi,

I just wanted to wish you and your sister the best of luck. Your Sister is so lucky to have your support and I am sure that now she has told you the burden doesn't seem so big to her and she'll sort it. It seems she is already focused given that she is looking at an SOA already.

Good luck and best wishes, xx

southernscouser

DO NOT secure anything to the house!

If this is what the IFA has suggested then please give me their address and I'll go and knee-cap them! :mad:

As others have already said, get your sis to prepare a SOA (see here for a guide). Post it on here and we can cast our eyes over it to see if we can help her cutback anywhere.

Does she have a computer/internet at home? :think: