Legal position when helping family member with debt

[feefofum]

A close family member has been made redundant for the second time in 6 months. They are not entitled to any redundancy pay, they have no savings, she is a single parent with a mortgage and 2 teenagers and a suspended repossession order on her house. She is also in debt with her electric and gas and has had a pre-payment meter fitted recently.

 

She has begged me for help to cover her mortgage in the short term given the suspended repossession order. This is £805 per month. I am in a position to help as I have £20K in my cash ISA currently paying 3%. This is for my intended house deposit but I am willing to sacrifice this in order to keep a roof over their heads.

 

How do I go about drawing up an agreement? Do I need to see a solicitor? I'm also aware that the family needs money to live day to day, for gas, electricity etc etc. Whilst I want to help I also want to protect myself. She has offered me equity in her house but I don't want to gain from her bad situation (and house prices are still likely to drop anyhow).

 

I don't want to lend her the full 20K (I need enough to look after myself should my own job get the chop). The uncertainty is when she is likely to get a job again -its dire in teh industry she works in and as re-training is an expensive option.

 

What do you recommend in my situation? How much should I lend? On what terms? She obviously can;t begin to pay me back until she gets a job again. How should I draw up thsi agreement?

 

I look frward to you help and replies. Thanks in advance.

[cerberusalert]

Moved to the Legal Forum.

[The Mould]

A close family member has been made redundant for the second time in 6 months. They are not entitled to any redundancy pay, they have no savings, she is a single parent with a mortgage and 2 teenagers and a suspended repossession order on her house. She is also in debt with her electric and gas and has had a pre-payment meter fitted recently.

 

She has begged me for help to cover her mortgage in the short term given the suspended repossession order. This is £805 per month. I am in a position to help as I have £20K in my cash ISA currently paying 3%. This is for my intended house deposit but I am willing to sacrifice this in order to keep a roof over their heads.

 

How do I go about drawing up an agreement? Do I need to see a solicitor? I'm also aware that the family needs money to live day to day, for gas, electricity etc etc. Whilst I want to help I also want to protect myself. She has offered me equity in her house but I don't want to gain from her bad situation (and house prices are still likely to drop anyhow).

 

I don't want to lend her the full 20K (I need enough to look after myself should my own job get the chop). The uncertainty is when she is likely to get a job again -its dire in teh industry she works in and as re-training is an expensive option.

 

What do you recommend in my situation? How much should I lend? On what terms? She obviously can;t begin to pay me back until she gets a job again. How should I draw up thsi agreement?

 

I look frward to you help and replies. Thanks in advance.

 

Good afternoon feefofum

 

Your family is far too important to let legalities come between you. Keep your good heart and help your family member, be a good sheperd, you will be able to help and support your family member and you shall not suffer for such kindness.

 

When my family members were struggling with serious financial difficulties, I borrowed money against our home in order to keep my family members alive, I did not request that the money given to them be returned, life is the Gold on this Earth, tend to your precious family member, money will always look after its self.

 

Kind Regards

 

The Mould

[Ruprecht]

If you are not happy with just gifting it and "hoping for the best" repayment wise, maybe you should keep things simple and treat it as a gamble.

 

Amount you are giving her/Estimated value of House x 100 = Your % share of the house

 

The Mould is right though, look after your family within reason. There is too much "everyone for themself" these days.

[debbbbsy]

She has begged me for help to cover her mortgage in the short term given the suspended repossession order. This is £805 per month. I am in a position to help as I have £20K in my cash ISA currently paying 3%. This is for my intended house deposit but I am willing to sacrifice this in order to keep a roof over their heads.

 

I can understand your concern, in your attempts to help her, you could simply be lining the pockets of her other creditors.

 

It maybe better for all concerned, before lending any money, to establish first how deep the problems are. Exactly how much money does she owe. Is there equity in the property. It may be best, rather then struggling to maintain her debts (with your help), but instead consider a different route.

Many people consider bankcruptcy as a big NO NO. But within 2 years she could start afresh. Also, if there is no equity, and she threatens this ( even follows it through). They may consider an offer. Also, I have been told, that even if they have a charge over a property, she could still sell the equity for a nominal fee.That way the home is protected if she goes bankcrupt.

 

You may think your helping by lending the money, but it really depends just how bad it is. The money might be better used helping her to start afresh.

In a gentle and reassurring way. Sit down & go through her finances. Otherwise you could end up using your money to simply delay the inevitable house repurchase & other creditors banging on the door.

 

Debs