Neg equity/underpaying mortgage/implications of inheritance?

N

noreta

Guest
Hello
I really need some advice. I'll try and keep this simple. My husband and I are in negative equity to the tune of at least 50 grand. We are not paying our full mortgage, in fact we are not paying the full interest payments at the moment which means our mortgage is going up instead of down. We have over 60 grand of other debts. We have payment plans in place with 2 creditors and this is all we can afford to pay out. The other 2 will be taking us to court over the larger debts which total about 45 grand. I think this about sums up our current situation. I'm out of work and my husband only works part time. We have a weekly income of 409 at the mo.
So now we look to the future. Apart from the fact that we're in a big hole at the moment and even if things stay as they are we would have to think seriously about what our future holds, there will be another spanner thrown in the works at some stage in the form of an inheritance. I am an only child and will at some stage be the sole benefactor of my mothers house. She is in her 70s at the moment and while i'm not wishing her away I have to wonder what can happen when the time comes? It will certainly still be within the term of the mortgage unless she hangs on til she's gone 100. I hope ye don't think i'm being too morbid, i'm being practical.
So I suppose my question is... what can our creditors do to us at that stage? Her house is currently worth about 280 grand. Can we be forced to sell it? Ideally I would love to have that house as a family home and rent this one.
 
We have an application in and should be entitled to it as far as I can make out but we're still waiting to hear back. I actually just missed the guy at the clinic today by a couple of mins. It's been weeks and we haven't heard a thing!
 
Given your mothers age and state of health I would respectfully suggest that the inheritance issue should not be paramount in your mind at the moment. If you have concerns around this she can in time create a Trust and leave a life tenancy to you. However it would be best for her to discuss any proposals on this front with her solicitor.

In view of your poor financial circumstances at present you should try to arrange a meeting with MABS (acknowledging that they are currently under pressure in agreeing early meetings). It is not clear from your post whether you have approached your Bank in respect of a repayment arrangement under the MARP guidelines. If not you should do this immediately. The priority now is to obtain as much outside assistance as possible and organise your finances in a manner that meets your income and allows for a reasonable standard of living.
 
As with many other similar queries lately if you post a more comprehensive summary of your overall financial situation (maybe on the Money Makeover forum) you might get some useful feedback/advice from others here.
 
Hi Brendan

We're well passed the MABS stage, i.e. we were with them, had payment plans in place, were paying our creditors small amounts and we've now gotten to the stage where our money has gone down further and to maintain any standard of living we have had to stop payments to creditors or starve. All of this is not an issue any more, we are fed and fine. Things are not easy but we have a reasonable standard of living for these times.
I'm really hoping that my inheritance will not become an issue any time soon, but having said that if anything were to happen I would like to know where I would stand. I lost my dad when he was only 65 so it's only mam and me left. Believe me I'm not wishing her away by any means, but I would hate to think that someone could come along and force me to sell the family home. Can you see where i'm coming from?
 
Hi Clubman

As with many other similar queries lately if you post a more comprehensive summary of your overall financial situation (maybe on the Money Makeover forum) you might get some useful feedback/advice from others here.
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Thank you but this is not what I'm asking. Our finances are not good but they are in hand. I am merely trying to find out where I would stand if I got that inheritance in the morning. I know I shouldn't be thinking about it but it does worry me.
 
In line with my last post I suggest that you and your mother address this issue with her solicitor. Your priority appears to be the protection of any future bequest from creditors. Solicitor will be in a position to give you the best advice on how this can be done.
 
noreta said:
Our finances are not good but they are in hand.
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No offence but they don't seem to be in hand to me.
noreta said:
My husband and I are in negative equity to the tune of at least 50 grand. We are not paying our full mortgage, in fact we are not paying the full interest payments at the moment which means our mortgage is going up instead of down. We have over 60 grand of other debts. We have payment plans in place with 2 creditors and this is all we can afford to pay out. The other 2 will be taking us to court over the larger debts which total about 45 grand. I think this about sums up our current situation. I'm out of work and my husband only works part time. We have a weekly income of 409 at the mo.
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But fair enough if you just want comments/advice on the potential inheritance issues.
 
noreta, the short answer to your question is that, yes, if you inherit your mother's house, it will then be treated as an asset like any other that you own and if your creditors come after you/get a judgement against you, you could be forced to sell one of your properties (you could move in to your mother's house and have that as your PPR but then your current house becomes the 'investment' property). Owning a second property may also have implications for any means-tested social welfare assistance you receive.
 
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