Advice Please

Totallyfedup

Hi all,

Forgive me if this is long winded, but I’d like to give a rough background of our circumstances.

We ran our own business (limited company) from home, but have recently begun procedures to strike the company off as it has not worked out. The only income we have coming in is a war pension - £434.00 a month and a forces occupational pension at £227.00 a month. We are both looking for employment and after applying for many jobs – no luck so far (both in early fifties).


Now we have run into financial difficulties and have not made payments to creditors (from December), also we have just defaulted on the mortgage on the 1st Feb.

We plan to look for a rental property as we have made the decision that our mortgage at £995.00 a month is too much and we could rent a decent property for half of that amount. Our house has little or no equity.

Obviously we will need to find somewhere soon as we want to do a voluntary repossession asap.

We will be able to offer a few months rent plus bond upfront and we will be able to provide a guarantor if necessary. We have been on to our council’s website and filled in the housing benefits / Council tax calculator to see if we were eligible for any financial assistance and found that we were, because our council does not consider a war pension as income so is therefore disregarded. The DWP does count war pension as an income, so we can’t claim Income Support.

So, technically as we are not on income support (because we are not entitled) would we be seen as “DSS” tenants if we claim housing benefit? This is not meant to offend anyone claiming income support, but we have noticed that most of the rental housing (that accepts DSS tenants) is located in rough areas.

Also, if we claimed housing benefit, would the fact that we would have paid a few months rent upfront effect the date we could receive it from?

Any advice or thoughts would be welcomed, thanks.

silvercar

Get the HB paid to yourselves and don't mention it would be my advice. You will be responsible for making sure your rent is paid and the landlord shouldn't be bothered as long as they get paid.

The pain for landlords is tenants who have no depsoti and who receive HB 4 weekly in arrears and expect landlords to sort this, together with any top-up payments. If you can provide a deposit and a guarantor, it shouldn't affect a landlord. I wouldn't mention it to be on the safe side. If it comes out, you say it was your intention to work and you are claiming until you do so.

Your HB claim will start from when you claim, any rent up front won't affect it.

I don't know why you are looking at voluntary repossession, this will screw your credit rating. Why not sell it yourselves?

Totallyfedup

Hi silvercar and thanks for your message and advice.

That’s good news about HB claim not being affected by us paying upfront rent.

The reason we want to go down the voluntary repo route is the house has little or no equity. Someone across from us has had their house on the market for almost as long as we’ve been here (we relocated to the north-east from the south a year ago) and at £10,000 less than we paid for this house. I believe (in hindsight) we paid over the odds, it had been totally refurbished.

Selling it isn’t really an option for us, with all the legal costs involved, we would probably end up well out of pocket and given our current financial position, that would not be good!

Still, what goes around comes around as they say! We sold our house £10,000 over the market value price down south! As the estate agent said, a house is worth what someone is willing to pay for it, so what can I say!

To be honest, with stopping payments to creditors and now the mortgage – our credit rating is already on the slippery slope. We have realised that realistically, paying nearly a grand a month is untenable for us. Getting jobs won’t be easy at our age – there is a lot of ageism around! Don’t get me wrong, that won’t deter us from applying, it’s just that we know it won’t be easy.

We’ve thought long and hard about giving the house up, could do without the aggravation of moving again, but needs must!

Thank you so much for your help, it is much appreciated

Mum_of_3_3

Just a thought, but what would your house rent for?

Would it be financially viable for you to rent somewhere smaller & rent yours out until you both find work?

I hope everything works out for you both.

M_o_3

Trollfever

Have you had independent advice?

Your story sound perfect for advice from CAB.


http://www.adviceguide.org.uk/index.htm

silvercar

Selling it isn’t really an option for us, with all the legal costs involved, we would probably end up well out of pocket and given our current financial position, that would not be good!

Even if you go down the voluntary repo route, the lender will chase you for everything not covered by the sale price. This will include arrears, selling and legal costs.

Totallyfedup

Thanks for your replies, much appreciated. Sorry, I should have said before that we are going to petition for Bankruptcy. I have sought advice on the BR board but where the renting/claiming HB etc aspect is concerned, someone recommended posting on this board. I must add that we hope to secure a tenancy prior to this, even if it means we are still unemployed.

M_o_3: Our house would probably fetch no more than £500 per month – going by the average rental prices around here. We are hoping to decrease our outgoings and pay around that figure to rent ourselves. Thanks for the thought and your support though!

Trollfever: Yes we have spoken with the National Debtline a few times and they were very helpful. Thank you for your support and the link for the CAB.

silvercar: Regards doing a voluntary repo with our house, by going down the BR route, any shortfalls will be included in the bankruptcy. It’s not an easy decision but there really doesn’t seem to be any other way out of this mess. Thanks for your message and advice.

I must say that finding MSE is one of the best things I have ever done, everyone has been so helpful, my side of the family know nothing of our problems and only DH’s husband is aware of everything. It’s fantastic that I can seek support from the forums here, thank you all so much and I mean that from the bottom of my heart.

scrummy_mummy_2

My heart goes out to you both...but congratulations on proactively trying to sort it all out rather than burying your head in the sand.

My mum and Dad divorced after 35 years when mum was in her 50's...it was very messy and she unded up with all sorts of CCj's and lost the house and practically all she had. She didn't even have enough to pay for food.
She is 62 in July and has somehow fought back hard working her socks off at Dairycrest pushing milk cages about for 10 years.
She has a lovely bungalow now with a beautiful garden and a wonderful new (toy boy!) bloke...who has, incidentally, just been made redundant on Friday!

Things seem bleak now but they will get better....take control of what you can and try to keep your head above water. Above all, don't let it get you down too much because you only get one go at being alive and you are a long time dead. Stick together and fight together...don't be intimidated by 'big' organisations who try to scare you into re-paying them and get lots of advice from lots of places and cobble together what works best for your circumstances from this advice. Remember, one size doesn't fit all!

There is another alternative to bankruptcy and it isn't an IVA
Try www.cccs.co.uk
I've seen it on this site before when I was trying to help a friend earlier this year.

Totallyfedup

Regarding my last post – I meant dh’s brother not husband, sorry head is all over the place at the moment!

Thank you scrummy mummy for your message of advice and support. October was the actual point where we took our heads out of the sand and realised we have to do something about our situation.

I am so sorry that your mum had to go through the trauma of divorce and losing everything, but so glad that she came through it and has someone new in her life, though sorry to hear that her partner has been made redundant, hope he finds something else soon.

We have been married for nearly 34 years and are pretty much rock solid together. I often joke with him that we (in effect) grew up with each other; I was 17, him 18 when we got married! First became parents at the age of 19 and 20, but wouldn’t change a thing! As my dh says, as long as we have each other, nothing else matters!

Our children are 32 and 26, eldest married with two children, youngest moving to live abroad later in the year, so they are more than capable of looking after themselves if you know what I mean! That is really reassuring as I have noticed my anxiety levels are higher than usual, natural given my age and the problems we are having financially.

Unfortunately our debt level is too high for any repayment plan and bankruptcy is our only option, but thanks for the link. I am worried about the stigma and repercussions of going BR but on the upside, it will give us a fresh start. Not being able to obtain credit will be no bad thing; will never go down that road again. As for getting a mortgage, our ages will against anyhow so not much we can do about that.

Some of our creditors are being helpful whilst others seem to be trying their utmost to grind us down, but as you say, we will try not to let them get us down too much. I know it’s not their fault, but we can’t pay what we don’t have can we.

Again, thank you so much, it helps immeasurably.

PasturesNew

Totallyfedup wrote: »

Someone across from us has had their house on the market for almost as long as we’ve been here ... and at £10,000 less than we paid for this house. I believe (in hindsight) we paid over the odds, it had been totally refurbished.

Another house being for sale and not selling is not necessarily an indicator yours won't sell.

A house was for sale over the road from me. IMHO a nicer looking house - and internally I bet it was nicer too. Yet mine sold at over £20k more ... and theirs was on the market a year before I put mine on the market and theirs is on the market still.

Totallyfedup wrote: »

Selling it isn’t really an option for us, with all the legal costs involved, we would probably end up well out of pocket and given our current financial position, that would not be good!

If you just hand over the keys, your property will be auctioned and you'll still have the fees and costs I believe - and you will still be liable for the shortfall on the mortgage.

Although it will all happen quicker. But have you tried looking at putting it into an auction yourselves and feeling a bit more in control of the process?

Totallyfedup

Hi PasturesNew,

Thank you for your post and advice, but as I’ve said in my last post, any shortfall in the house finances will be incorporated into our bankruptcy. We wouldn’t have the time to sell the house; also there is a real housing slump around here with properties galore for sale, some that are much, much nicer than ours

I do appreciate you trying to help though, thank you very much.