House May Be Repossessed If Something Isn't Done Soon

chez000

nimbo wrote: »

earlier on he was posting as 2 people (i think...) a load of the posts from his (possible) alter ego have been removed, but he was going on about moving to another coutry, and his son (?him) commiting a dodgy sale and then going BR to avoid payiongthe rest of the debts off...

Tried to follow it, give up now.
Its nice to help, sometimes its nice to scheme, the complexity of the posts make this seem somewhat fictious, or is that just me?

Not suggesting Im fictious, existential quandry for a moment there

Remy_LeBeau

nimbo wrote: »

earlier on he was posting as 2 people (i think...) a load of the posts from his (possible) alter ego have been removed

I didn't notice for about half an hour I was logged on under my normal forum login, so I deleted the posts and copied and pasted them into a consolidated one, using the login I wish to use here (I'm quite well known on GIOL and didn't want to post personal information circumstances on the same username).

[quote=chez000]Tried to follow it, give up now.
Its nice to help, sometimes its nice to scheme, the complexity of the posts make this seem somewhat fictious, or is that just me?[/quote]

Sorry, it wasn't my intention. I don't think my idea is overly complex, perhaps I should revisit it and rephrase it, rather than writing in my normal rushed, thinking aloud style.

Toto

I think you can re-write it in as many ways as you want, however the advice will be the same. Your father should get advice from one of the debt charities and if necessary should sell his house, clear his debt and start over. At the same time he should have some counselling to sort out how the 600,000 came about and to resolve any money issues he may have.

You should but out and stop trying to profit out of your father's situation.

KittyKate

I am struggling to understand or believe this thread.

If the OP thinks running away, cheating the system, or 'screwing the big guys' is a long-term solution, he is an idiot, quite frankly.

I won't give any advice to someone so dishonest and immoral.

There's two ways to be debt-free. The first is to not get into debt. The second is, if you are in debt, to pay what you owe.

High life or not, his father lived in a house he couldn't afford, spending money he didn't have. Are you saying that a man, his wife, and their four kids can't live in a council house rather than a £400,000 one? Luxury is not necessity. Many families have brought up more children on less money, so it's no excuse. I think you both need to get your head out of the clouds and your feet on the ground.

Remy_LeBeau

Hi,

My Dad currently has debts of around £400,000. This is spread across various credit cards, and a mortgage which is now £280,000, with £3,500 monthly repayments - the original mortgage 20 years ago was £40,000, and at one stage, I think the house was almost entirely ours, but now it looks like we'll have to sell it to clear the debts.
On Friday someone came round and valued the house at £470,000, which would leave my parents (who have neither a pension nor any savings left) with around £70,000 (that particular estate agent charges 1%; £4700 that would be if it sold at the price of the valuation, but that isn't set in stone, and to be honest, I wouldn't be surprised if my Dad has just rounded the figure off to £400,000, so call it £60,000, cash.
My parents have 4 children, 2 have been to University and now live elsewhere, one is a Uni Student, and the other is under 18 and at college.
I currently earn £110,000 a year, and would consider buying the house so as to enable my family to continue to live there.
We have two options:

If my Dad sells the house, he will then have to find somewhere to live for the next 75 years; the £60,000 will go towards a deposit on a property, and my Mum (who's never had any debt) will hopefully be able to get a 10-15 year mortgage for 6 times her income, her income would be £30,000 if she worked full-time, so £180,000. £240,000 buys a one bedroom flat around here, in the "rough" part of town, with no garage, etc.

Alternatively, I would agree to purchase the house at a heavily discounted price, 1/2 price say. This money would immediately be swallowed up by companies he owes money to regardless of how much or little it was, so the %age doesn't mean much in real terms, aside optimizing the amount of interest that would then be payable for the next 5 years - after 5 years, my Dad could declare bankruptcy, and would lose all his assets, and the trustees would investigate all transactions that took place within this 5 year period, to see if anything untoward went on with regards to offloading assets.
I guesstimate that over a 5 year period, at 10% interest, £100,000 interest would accrue (taking compounding, but not taking repayments, into consideration).
However, it is more important how little he/we (yes, I would be sustaining this) could pay off over the next 5 years.
The amount of equity "squirreled away" from the value of the house would be £240,000. If less than this amount could be repaid over a period of 5 years on a sum of £165,000 (likely?) then the gain would be the difference between the amount repaid, and the sum owed, less bankruptcy costs.
This is all very wishy washy and someone with more knowledge in this area will probably poke holes in this habberdashy idea; perhaps there are cases were the 5 year rule would not apply for instance, or somehow, the amount we'd be left with would be less than the £60,000 that would be left over from the sale of the home. It has to be taken into consideration though, that by purchasing the house so cheaply, I would be happy to write a contract agreeing to receive no rent on the property, indefinetely; most of my money is invested into things I can't get at anyway.

Bogof_Babe

I thought it was a typo at first, but you've posted twice now that your father has to live somewhere for the next 75 years. Erm, is his name Methuselah then?

silvercar

I think your in cloud cuckoo land.

Just to poke some fairly large holes in your logic.

At any point in the next 5 years one or more creditors could get impatient at your Dad not making decent repayments and make him bankrupt, at which point you fall foul of the 5 year rule, your transaction is exposed and the scheme falls apart.

Your gambling on the condition of the house and its value in 5 years time.

You will have a CGT bill at the time you sell the house.

If either of your parents needed nursing care, the transaction would be investigated.

How are you paying for the house? cash or a mortgage? will you get a mortgage for a non-residential let to a family member?

There are also benefit implications for your parents as they would have deliberately deprived themselves of assets.

Switching off from this thread now.

Burlesque_Babe

I was thinking the same thing bogof-babe!

Remy_LeBeau

Toto wrote: »

You should but out and stop trying to profit out of your father's situation.

Considering I have already noted the sort of tax-free RoI I get on my investments, I think this is a silly comment. But that is just a matter of opinion, and irrelevant to helping find resolution for this situation.

So, the general consensus is then, that he should sell the house, pay all the creditors back in full, downsize to a much cheaper property (actually to be fair, I've just had a look on rightmove on what can be purchased for ~£250,000 locally, and they're not bad properties) and go from there, with no debts, aside a £1,850 monthly mortgage payment for 12 years (just been on moneysupermarket).
It's certainly do-able, it's just it'll cost £370,000 over the next 12 years to purchase a house (there's several around the £250,000 mark that would be big enough), and I still quite like my alternative of holding onto £180,000 worth of equity from our existing house.

Remy_LeBeau

Bogof_Babe wrote: »

I thought it was a typo at first, but you've posted twice now that your father has to live somewhere for the next 75 years. Erm, is his name Methuselah then?

Actually, I was typing a lower number, and as I did so, I thought was the heck, I don't want to be thinking about how long my parents might live.