Advice NI Debt Service Case Study
Helping a Vulnerable Client with Mortgage Debt
Following her son’s injury, the family home was assessed to be no longer suitable for her son’s needs and the Northern Ireland Housing Executive provided a bungalow for the pair – the client’s son and the client herself as her son’s full-time carer.
While the client and her son were living in the NIHE house, her mortgaged property was damaged to an amount of around £8,000. Unfortunately, the property was not insured at the time and the client could not afford to repair the damage. She was left with a damaged property that she could not sell, while accruing mortgage arrears each month.
In this case, the Debt Service Adviser ascertained that the client had no need of the mortgaged property – not least because it no longer met the needs of her son. At this point the client was considering letting the house be repossessed by the mortgage lender.
The adviser assessed the client’s financial situation and identified she had a monthly surplus of £1; no other liabilities and equity of around £27,000 in the mortgaged property. They also discussed income maximization and reducing expenditure.
Adviser and client went on to discuss the potential equity of around £27,000 and how this could be released by selling the house. After consideration, the client decided that she could, with the help of her relatives, repair the house and contact a few estate agents for a valuation of the property with a view to selling. She was also advised to keep communication up with her lender, who were already empathetic with client's situation and advised her to shop around for a no obligation estate agent quote.
This client felt relieved after receiving advice and delighted that someone was there to help. The adviser also explained to her that if the house was valued at a significant lesser amount or that the property was valued which resulted in a shortfall amount then the client could come back to the service for further help and support.
This is an excellent example of how overwhelmed a client can be in such a situation when sometimes all is needed is a supported discussion of options to allow them to see light at the end of the tunnel in order to move forward.