Paying off debt
"My friend needs some advice − he has got himself into a bit of debt."
This is becoming an increasing problem that now affects more and more people in the U.K., no matter what their age may be.
In this case our client was referred to us by a friend (whom is a barrister); and our client was living entirely upon State benefits due to some health problems that prevented him from working. Our client was living in an unencumbered property worth £240,000 but he had taken out a personal loan which, with other debts, he was finding difficult to honour. Our client asked his friend for some help.
Our client had already been to the Citizens Advice Bureau and had seen through a complaint to the relevant Ombudsman − the findings were that he had no choice but to pay up.
Because our client owned a house, this meant that the creditors would not back down. The only option would be trade down or for him to raise a mortgage to repay his mounting debts. To trade down would have meant leaving the area and his network of care and friends. A conventional mortgage was not possible as he had no employed income and he is unlikely to ever receive any offer of employment.
Having a mental capacity to understand our advice.
We eventually recommended an equity release plan and the provider asked our client to meet with Consultant Psychiatrist who wrote letter to confirm his capacity to understand the implications of what he was doing and the loan was finally agreed.
State Benefits.
In this case (as we do in all cases) we checked how our clients benefits would be affected by taking out an equity release loan.
Are you struggling with debt? An equity release plan may enable you to repay your debts and increase your level of disposable income. Call us to discuss your options in confidence.
You should think very carefully about this information. If you are at all unsure about which equity release transaction is right for you, then you should ask your adviser to make a recommendation. We also offer advice on home reversion schemes and conventional mortgages, either of these products may be more suitable to your own circumstances.