interestrateripoff Posted April 25, 2010 Share Posted April 25, 2010 http://news.bbc.co.uk/1/hi/business/8640611.stm People in the UK owe £55bn in hidden debts, according to a survey.Nearly a third of people (31%) hide the true extent of debt from family members, according to the research by OnePoll for the Post Office. One in six women (16%) and more than a quarter of men (28%) do not tell their partners how much they owe, the survey of 2,258 UK consumers suggests. Although it is called personal debt, the family home could be at risk if a joint owner runs up huge bills. Credit cards Nigel (who has asked us not to use his full name), aged 69, who lives near Bath, was unaware his wife had taken out seven store and credit cards. Over a few years the money she owed had spiralled to more than £50,000. She had a good credit score partly because she jointly owned the family home. They have now had to take out a mortgage on their house to clear the debt. Nigel said he believed the credit card companies acted irresponsibly. "They were sending through pre-authorised cards to my wife. She had ticked a box stating that she was a homeowner but I was kept in the dark even though I jointly own the house with her," he said. "The credit card companies should inform co-owners if their partners are running up huge debts, which could affect the family home. "The debt does of course needs to be repaid. We have had to take out a mortgage on the house, which I can cover with my pension, but this was not how I hoped to be spending my retirement." Rules Credit card companies do not have to inform joint owners of an asset about debts run up by just one of the owners. Although a co-owner of a property is not legally liable for their partner's personal debts, a lender can demand the equity the debtor owns. If the case goes to court and a charging order is granted, the property may have to be sold. The British Bankers' Association (BBA) said ticking the "home owner" box on a loan application was part of the credit scoring process all lenders undertook. "It has nothing to do with securing the loan and does not do so," said Lesley McCloud, from the BBA. "If customers do not keep up payments, banks try to come with a mutually acceptable repayment plan. "Only if that completely breaks down will they go to court to try to get the money back. It is during that process when assets are considered. Even then it would be a last resort to force a sale. More commonly the debt is covered when the house is sold voluntarily." Personally I can't see what the problem is clearly what is needed is more debt to solve this problem. Simples. If people have an asset they need to borrow money against it to live the lifestyle they deserve and as the asset is going up in value all the time they can borrow ever more money, then they can borrow even more money against the asset to pay off the money they've already borrowed against the asset. I mean what can possible go wrong in this? Debt is wealth and it all helps GDP. Wealth creation was never as easy as it is today. Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted April 25, 2010 Share Posted April 25, 2010 And it's eejits like this outbidding me for a house... How long can this sticking plaster society hold together I wonder? Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 25, 2010 Share Posted April 25, 2010 (edited) And it's eejits like this outbidding me for a house... How long can this sticking plaster society hold together I wonder? this is another reason why the full scale of house price falls may take 15 years or so to happen - the slow drip-drip of debt-pain and margin calls, in a low-income increase environment Edited April 25, 2010 by Si1 Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 25, 2010 Share Posted April 25, 2010 (edited) "Im only talking from what i done, i had a residentioal mortgage last april, we had the house up for sale for two years and had no luck in selling anyway we decided to remortgage for 5 years fixed rate, and when i done this i asked what the implications was if we decided to rent, and they told us the same as your lender did that it would be okay. When we remortaged we added 60,000 pounds for home improvemnts, anyway we put that money in the bank, before we began the house improvemnts and a new car anyway a house came up for sale that we liked, so i got some agents out come out and see what rent we would get, and it was nearly double the mortgage, anyway, i then contacted my lender and got consent to let. And instead of using the 50,000 pound for house improvemnts i got another residential mortgage and used that money has my deposit. Now you could do exactly the same and avoid high btl mortgages, even if you make 6000 pound a year it will take you years to get a deposit big enough to get a good residential mortgage deal, let a lone a good btl deal. I think the only way you are going to do it is rent your house out save up and hope that house prices dont go up. because even if you save 6000 pounds a year, whos to say house prices wont rise by the same amount. And to be honest at your age do you a really want to be renting a room with a load of strangers?" "At my age! should be settled with perfect husband, kids and lovely house but not going to happen, lol. If I pay off my present house it will be mine and can rent it out to a couple I know. Hopefully find a nice house to share ie rent a room, don't have to worry about bills and have a bit of me time. If a house comes up which I want to buy, I will then look for a btl mortgage on my house, use that as a deposit on a new house, make up the rest with a residential mortgage or once tenants contract comes to an end, could then sell my present house and then move on. OR my knight in shining armour will put in an appearance, whisk me off to his mansion and I can keep the rent from my house and all problems solved. Pigs flying springs to mind but hope springs eternal EVEN at my age." ?? etc http://forums.moneys...=2417789&page=3 TOAST Edited April 25, 2010 by Si1 Quote Link to comment Share on other sites More sharing options...
Bob Loblaw Posted April 25, 2010 Share Posted April 25, 2010 Chap I know, a financial advisor, had at the last count £177,000 of unsecured debt. Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted April 25, 2010 Share Posted April 25, 2010 Chap I know, a financial advisor, had at the last count £177,000 of unsecured debt. ah was he driving a lambo though Quote Link to comment Share on other sites More sharing options...
Bob Loblaw Posted April 25, 2010 Share Posted April 25, 2010 Perhaps he is right, the government will always pay his mortgage, so put all the unsecured debt on the house via mew, job done. Soaring house price will eat away at the debt - he is rich. He does not own a house (or a Lambo), not quite sure what he has spent the money on. He was boasting to me yesterday though that his partners house is now 'worth' £290k and she bought it for £210k. Will be interesting to see if he will get his just desserts ever as people like him seem to get away with it somehow. Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted April 25, 2010 Share Posted April 25, 2010 He does not own a house (or a Lambo), not quite sure what he has spent the money on. He was boasting to me yesterday though that his partners house is now 'worth' £290k and she bought it for £210k. Will be interesting to see if he will get his just desserts ever as people like him seem to get away with it somehow. Unearned riches. A lot of people believe they have somehow 'earned' these riches through screwing a conservatory on the back wall and polishing the lav seat. Quote Link to comment Share on other sites More sharing options...
jareth Posted April 25, 2010 Share Posted April 25, 2010 Hidden Debts 'amount To Billions' Nearly 33% of people have hidden debts that put house at risk Including the British Government! Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted April 25, 2010 Author Share Posted April 25, 2010 Chap I know, a financial advisor, had at the last count £177,000 of unsecured debt. Did he advise himself? Quote Link to comment Share on other sites More sharing options...
non frog Posted April 25, 2010 Share Posted April 25, 2010 ...A lot of people believe they have somehow 'earned' these riches through screwing a conservatory .... Sometimes you just have to do what it takes. I once screwed a Tory but that is as close as I have ever come to be honest. (It was a mistake - honest) Quote Link to comment Share on other sites More sharing options...
porca misèria Posted April 25, 2010 Share Posted April 25, 2010 If people have an asset they need to borrow money against it to live the lifestyle they deserve and as the asset is going up in value all the time they can borrow ever more money, then they can borrow even more money against the asset to pay off the money they've already borrowed against the asset. How much can I borrow against the shirt on my back? It's old but very comfortable. Quote Link to comment Share on other sites More sharing options...
Errol Posted April 25, 2010 Share Posted April 25, 2010 How much can I borrow against the shirt on my back? It's old but very comfortable. We can securitize it and sell it on to third parties. Make a fortune. No risk. Quote Link to comment Share on other sites More sharing options...
winkie Posted April 25, 2010 Share Posted April 25, 2010 How much can I borrow against the shirt on my back? It's old but very comfortable. ..you must be worth more than your shirt on your back....why not get a mortgage on your ability to earn future income....who needs property, when brains are potentially worth more. Quote Link to comment Share on other sites More sharing options...
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