Hi all

the position appears to be that there are debts which are no longer able to be paid as they fall due. In the current circumstances it will only ba a matter of time until a creditor pursues for recovery action. This may result in any of the following;

Bank/wage arrestment
Inhibition against the property
bankruptcy

It is only a matter of time until one of the above occurs and at worst, this will result in the forced sale of the policies & property to pay debts plus interest, together with the considerable associated costs.

The post highlights a real financial problem, but there is no magic solution which will allow you to keep the policies and house in it's current form. In a sense, you are in a better position than most with the equity & the policies.

The solution, as bad as it may seem would appear to be using the proceeds of the policies to settle the debts and hope the position with the ongoing mortgage continues ( to be paid) The only other option is the sale of the house which would free up funds to pay everything in full and provide free funds for a decent standard of living.

Mark

Hi Everyone

Thank you for your recent input which is much appreciated, but I have a couple of questions which are troubling me that may hopefully still allow me to keep my house.

1) What are my chances of switching my mortgage from interest only to Capital and repayment as the TDA previously suggested, bearing in mind that I am not working?

2) Will switching, affect the DWP's mortgage interest payments that they are making at present.

3) Is there any way that can guarantee that I can keep my house.

4) Am I better speaking to a mortgage advisor ,and if so can you suggest one that you would recomend apart from Mr Leckie whom I believe you have already contacted,or an IFA that could overhaul my finances?

The more I think about all this ,and it is a lot to take in,the more paranoid I am getting, and I worry that I may end up losing my house.
I am really sorry about having to put up so many posts, but I do not see any alternatives at present.So I hope you will forgive me for pestering all of you. I do humbly appreciate and value ALL your comments.I just wish I could turn to one company or one individual who can help me through all of this.

Hi numanor,

Just to be clear I pointed out a number of potential pitfalls associated with switching your mortgage arrangements rather than suggesting that you do this.

I cannot see your mortgage lender having any issue with you switching to capital and interest; after all they'll get their money back sooner. A more important issue is whether you could repay the higher mortgage payment as a failure to do so could result in the loss of your house. With a limited income this seems a risky route to say the least.

We're not experts on the DWP's criteria for assisting with the payment of mortgages. I'd suggest that you ask them this question directly.

In terms of whether there is any way to guarantee that you can keep your house I'd just refer you to the comments in previous answers to your questions on this thread. In the current circumstances I'm not sure that you can 100% guarantee keeping the house I'm afraid. The reason for stating this is that you appear to be making it clear that you cannot afford to pay your mortgage and endowments and unsecured debts and living expenses in full each month. As Mark has stated this does create serious risks.

Please don't think that you're pestering us; this forum is here to try to help you.
As before however I'd suggest that the specialists for you to speak to you at the moment would be a financial advisor and a Debt Arrangement Scheme advisor as these seem to provide the most likely routes to resolve your debt concerns within the set of priorities that you have set out previously.

Hi numanor

In answer to the questions:

1. I am sure the bank would be happy at you switching to capital & repayment, but as you have no income as such, I am unsure how you would afford this.

2. No, the DWP will only meet the interest on the borrowing.

3. This is a difficult question. You need to maintain payments on the mortgage and secured loan to avoid repossession proceedings. In addition, you will need to maintain payments to the unsecured debts to avoid legal action which could/would result in the forced sale of the property as a worst scenarion.

4. No, I think they will tell you exactly what has been mentioned before.

As detailed in my last post, I can see no solution in the way you would like. If you can repay the unsecured debts with the policies, this will deal with this problem and leave you with the payments on the mortgage which hopefully the DWP will maintain. This would not reduce the mortgage if only interest was being paid, however should satisfy the lenders. This would then allow you to look at normal ongoing living costs.

Mark

Hi Everyone

Once again thanks to the kind TDA and to Mark for there advice.

I do have some income albeit from State Benefits such as Income Support, Incapacity Benefit and Disability Living Allowance. My wife gets Tax Credits and Child Benefit.

I could obtain money if neccessary to cover any potential shortfall in the mortgage which I hope the DWP will continue to pay as they are doing so at present.

I will try to find an IFA and a Money Advisor to go through the DAS scheme and any mortgage issues as soon as I can.I have to get this sorted as I have had angina attacks and problems with high blood pressure over the last few days.

I will go through all the posts and study them in detail when I am in better condition and try to fathom out the best way forward.

Once again Thank you all.

Sorry but I forgot to ask if I should surrender the endowment policies now to clear the debts, as they are due to mature in 2013.

Hi numanor,

You should not cash in the endowments without first taking advice from a qualified and regulated financial advisor.

While cashing in the endowments has been identified here as one possible option to deal with your debts, specific advice on the detail of your investments, and advice about making decisions specifically related to your current investments, is a regulated area and outside of the scope of the experts on this website.

When you speak with a financial advisor you will want to cover the subject of how your mortgage will be repaid when your mortgage term comes to an end if you do cash in the endowments. Without having a plan for this you risk merely deferring the wider problem rather than dealing with it fully.

Hi Everyone

Please feel free to read my posts and to leave any comments and advice that you may feel would be beneficial to me in solving my problems. Thanks.

Hi all

I've been following the posts with great interest and also the responses and I think you are still looking for a solution where you write off all your debts and keep your house/equity and policies.

I don't want to sound narky, but with all respect I think the advice has been very exact and think you should perhaps concentrate on following the advice given and not hold out for some magical solution.

D

I agree with diverdown, you really need to think about this and see whats best for you, your family and your future. You sound asthough this is affecting your health and at the end of the day a house is made of bricks and beams a home is made of love and dreams, its what you make of it and the people in it with you and around you that makes a home not what its made of.

I am in a PTD, had to give up my home from which I lived in for 8 years after my husband suffered a brain heamorrhage last November. It was that problem that started off our debt worries as he was in hospital for a long time and is out of work at present. We have a 6 year old daughter and voluntary reposession was our only option. I was heartbroken but there was nothing else I could do as we were in negative equity anyway and they would not extend our payment arrangement after 6mths leaving us not able to meet the payments even though I had got my other debts sorted out with my PTD.

It is an awful thought when you think you have worked hard for it all your days and suddenly its all gone. We are now in rented accommodation and we are happy that we do not have the financial stress and worry hanging over us. You are in a position to pay off your debts albeit you would have to sell your home but im sure you would be able to get rented accommodation with you having your mortgage paid by the DWP.

I neither have my home to leave to my daughter but when she is older she will have her own house and family when I am no longer around. That will be a while as I am still young and my husband and I are hoping one day to get back on the property ladder but might have to be a shared equity property as we certainly cannot afford to save up the ?ú20,000 deposit you need nowadays for a mortgage. My husband is bankrupt and with me in a PTD it will take us a while for our credit rating to get back to normal, we also have a huge shortfall as our house was sold for less than the others are going for cause it was a repo and this was all because of an unsuspected illness.

You just don't know whats round the corner. Sorry for the waffle but realistically you have to think whats best and its sounds asthough you clearly are not managing this way. I hope whatever you decide you manage to get something sorted out and have some standard of living for your future.

Hi LMM.

I found your post very interesting and very much admire your philosophical viewpoint given the considerable challenges you have faced.

I just wanted to check something with you though. You mentioned about having a huge shortfall after the sale of your house - surely this will have been added in to your trust deed and your husband's sequestration? Maybe I have misunderstood what you are saying, but I'd have thought you shouldn't be having to pay this back.

Hi Kevin, thankyou for your nice reply. We have been through it certainly but got to keep the chin up and carry on. I am only 33 and my husband 35 so still very young. I have to keep going for my 6yr old daughter she is my world and my purpose in life no matter what it throws my way. You are correct regarding the shortfall it is huge all ?ú33,200 of it and yes Julie is just waiting for the good old Northern Rock to make a claim to my TD. Likewise with my husbands situation the AIB should also receive a claim too. I have learned not to let things worry me as things have worked out for the best and I am just so glad I came across this site and contacted Julie as I honeslty did not know options like this were open to people. Thanks again for your reply

Brings everything into perspective really, some of us are worse than others and to be honest although money is a great help, nothing is more important than health and family. Hope you all get sorted.