Multiple credit card debts - 77 yo pensioner

[MrHat]

Hi all. Looking for a bit of input and for anyone in the know to approve or disapprove of my proposed plans...

 

I am trying to help out my stepfather who is in over £30k worth of credit card/od/loan debt

and until now has maintained minimum payments of c£900 per month out of his £1000 income from state and company pensions.

 

He has 8 credit cards,

1 loan and

1 overdraft.

 

Most of the cards are used to pay other the other debts and this has spiralled out of control.

 

He is married to my mother but has no joint finance and they rent their house.

My mum is the owner of almost everything in the household including car and valuables.

She does not know the extent of this debt by the way and I am keen to help without getting her involved

- it wouldn't help to anyway.

 

At this moment in time, I am thinking of providing a letter for him to send to all creditors

to ask for a freeze on interest due to hardship.

 

I am also thinking of CCA requests for each debt to see where we stand.

 

I am also advising him to set up a new current account

with a bank that he does not currently have debts with in order to stop his pension being swallowed up.

 

I get the impression that we are short of time and some missed payments are likely to occur in the near future due to lack of funds.

 

When I get more information, I will create separate threads for some of the individual debts where necessary.

 

We are dealing with the following (have included creditor...when taken out approx....balance......min payment):

 

MINT CREDIT CARD (RBS)....2007ish........ £2600 Min. Payment (£60)

AMERICAN EXPRESS CREDIT/C ancient… £1800 Direct Debit (£45)

MBNA CREDIT CARD CARD …9yrs ago...... £3000 Direct Debit (£90)

LLOYDS CREDIT CARD …..2001 – just sent it to him/ no agreement..£5100 Direct Debit (£125)

LLOYDS PERSONAL LOAN …3yrs ago, 2 to go....... £1600 Direct Debit £110)

AQUA CREDIT CARD ….last year................. £1300 Min. Payment (£45)

NATIONWIDE CREDIT CARD …4-5 yrs ago....£2000 Min. Payment (£55)

CAPITAL ONE CREDIT CARD 12yrs ago….. £4000 Direct Debit (£140)

BARCLAYCARD C/CARD …4yrs ago......... £7500 Direct debit (£200)

 

LLOYDS PERSONAL LOAN …3yrs ago, 2 to go on loan....... £1600 Direct Debit (£110)

 

£30,000 in total PLUS

 

LLOYDS BANK O/DRAFT £4,000 (Average Monthly)

 

£34,000 in total

 

There isn't any notable PPI or penalty charges to make much difference to the above debts.

Also, to reiterate, he has no property, assets or income besides pension.

 

The reason I was keen for him to set up a new bank account was to avoid Lloyds getting first dips on his pension all the time.

 

Generally,

I think we have a strong negotiating position as he has nothing they can take

and credit rating isn't that important going forward

(due to overall financial picture of the household) if we were to default on some of these.

 

I know we could simply stop paying most of them

and then fight the battles as they come but we would like to try and be reasonable and sort this out together.

 

I do need to make sure that my mum is not affected by any of these debts.

In the short term, I don't think they can.

 

However, my stepdad is worried that the half pension

that will go to mum when he passes away will be claimed by creditors.

 

If anyone has any general advice about how to approach this, I'd be grateful.

[renegadeimp]

Why on earth is he paying these without checking the enforceability of them, checking to see if there are any charges that could be reclaimed, AND paying what THEY tell him? He should be paying whatever he can afford. If thats £1 a month, then so be it. If they refuse to stop interest and charges on the account, then they get £1 a month for the life of the account.

 

He is being caschcowed big time here.

 

Also as he is 77 years old and some of his debts are relatively new, the CC's dont seem to have taken his circumstances into account, and indeed at his age, they should be thinking about writing off the debts.

[MrHat]

I agree. They are milking him big time. However, this has just come to light to me and with CAG and others' help, we are going to tackle this head on. Just need to take the right steps in the right order.

[renegadeimp]

I'd be CCA'ing them all, and if the debts are valid, then i would write to them and ask them to write the debt off due to his age and the fact he is on pensions. If they refuse, then you TELL them to write it off or youll pay them £1 a month for the life of the debt. If they took it to court, chances are a judge would see his age and limited income and the fact that they wouldnt be repayable , and drop the payments himself.

[MrHat]

thanks renegadeimp.

 

 

In the first instance, we will fire off CCA requests to all credit cards.

 

 

Any reason not to also ask for write-offs at the same time (separate letter and envelope)?

 

 

Assume we need to deal with Loan and OD differently. The loan is manageable on it's own, I suppose and in 2 years will be paid off. OD is £70 interest/charges per month, so will at least ask for interest to be frozen on this.

[MrHat]

...also - I am going top tell him to cancel all direct debits to credit cards immediately pending responses from letters. He can't really afford the next set of bills anyway. Any reason not to do this?

[fkofilee]

Before you do, Have these actually been defaulted or are they still "live accounts"

 

CCA Requests all the way and also as IMP said, they should have taken his situation into consideration.

One other thing is that £1 seems about right.

 

Hold tight though, if these get transferred to a DCA etc, then its no matter, pay attention to the letters, but dont let them worry your family.

[MrHat]

These are all live accounts. Only just been made aware due to him knowing he can't continue to pay.

 

Defaults are likely to happen in the coming months but hopefully it will reflect well that we have written in advance to explain the situation, ask for write offs and interest freezes etc.

[sequenci]

Considering a lot of these debts are post APril '07 I honestly believe bankruptcy might be the best route to consider - given the circumstances.

 

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy

[MrHat]

Thanks for looking in...

 

I looked at this and don't see the benefit of bankruptcy. Half of the credit card accounts are pre 2007 for a start. The loan and od accounts will be dealt with differently.

 

The way I see it us that he has no assets and no means to pay off these cards. I'd be happier being taken to court by some of them.

 

Why do you think bankruptcy is a good option in the first instance? It may become necessary but doesn't seem like a good option at this time.

[MrHat]

One important question. Can my mother be dragged into this? They are married and she does have (modest) assets such as car, furniture, paintings (inherited) plus some savings that she was left by a relative about 18mths ago.

 

There is already an affidavit in place by my stepfather to say all of this belongs to her, which is true.

 

Fwiw, the affidavit was in place when my stepfather was involved in a personal injury claim due to being rendered disabled because of an accident at work about 6 yrs ago. This was settled out of court but he was worried that if he lost, people could come after the family for costs.

 

On top of being disabled (not wheelchair but severely restricted mobility) he also suffers from stenosis of the aorta. He truly is a vunerable old man!

[BRIGADIER2JCS]

I think sequence has the right approach to this, it must be given serious consideration imo.

[MrHat]

Hi brig, good to hear from you.

 

Fair enough but would find it helpful to get some reasoning.

 

He has no funds to do it himself unless I pay for it.

[BRIGADIER2JCS]

Good evening Mr H, 34K of debt which is likely to go toxic at any time for gentleman of 77 years is a frightening prospect.

 

 

There as far as I can see no way he can possibly continue to service these debts, would you agree?

 

 

If you can, I would suggest consulting an insolvency solicitor to get expert local advice on the way to proceed.

 

 

Read the info on sequencis post.

[MrHat]

Would agree he cant service all of it.

 

Problem is that I will struggle to sell bankruptcy to him. But can try.

 

Would bankruptcy affect my mum (his wife)?

[BRIGADIER2JCS]

No Bankruptcy is personal.

A difficult situation for you and you father, can't think of any other solution to this, there is no property at risk.

[MrHat]

So what IMP said is not advisable in the first instance iyo brig?

[odetter]

Considering a lot of these debts are post APril '07 I honestly believe bankruptcy might be the best route to consider - given the circumstances.

 

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy

I'm sure a DMP with Payplan over the next 12 years could be a solution.

[dx100uk]

sadly I don't think cash cowing or any of the othernormal 'routes' apply here.

 

its not like hes been bad, hes kept things going

but i'd would of expected a better attitude by the creditors

but

if they don't know his circumstances, they can't 'help'

 

no good in really pushing the CCA debacle here....

nor penalties nor PPI.

 

I had reasonable success about 4yrs ago for a neighbour of mine

not in too dissimilar situation.

 

I wrote to each of the creditors about his overall debt situation.

 

I outlined what he owed and paid everyone else

and asked them to write off the debts.

referring ofcourse to the BK option as an end game plan

if debts were not written off.

 

 

surprising out of 12 creditors [the gent was 78yrs old on state+private pension]

 

8 immediately wrote the debts off

 

as a point of note

many he had had credit with for +30yrs

 

of the remaining four

after 2yrs they also wrote the debts off

after numerous attempts/requests for them to WO

though he did keep up the full payment levels.

during this time.

 

it might also be worthy to .pick a debt'

 

p'haps the one costing him the most in interest etc etc

 

and pay them off

by dropping the others to £1PCM?

 

either that or BK.

 

the letters I use are basically the ones in the old library about writin gdebt off.

 

just included a sheet detailing all the others too

 

dx

[citizenB]

Thanks for looking in...

 

I looked at this and don't see the benefit of bankruptcy. Half of the credit card accounts are pre 2007 for a start. The loan and od accounts will be dealt with differently.

 

The way I see it us that he has no assets and no means to pay off these cards. I'd be happier being taken to court by some of them.

 

Why do you think bankruptcy is a good option in the first instance? It may become necessary but doesn't seem like a good option at this time.

 

I agree with Sequenci - bankruptcy would put an end to this - speak to someone at national debtline - sequenci provided a link for you. The calls are free and they are very helpful.

 

Your Mum's income and few assets cannot be touched.

[BRIGADIER2JCS]

So what IMP said is not advisable in the first instance iyo brig?

It would not be the course of action I would advise.

[renegadeimp]

I posted my opinion. However the others in this thread, are much more knowledgeable about this. I would advise following their advice.

[MrHat]

Many thanks for the response everyone (this thread has attracted a who's who of caggers!)

 

 

Will start by phoning national debt line (they open again tomorrow). I have read the link in detail. Some things are quite scary such as having to close his current account and the fact that the energy companies etc will want to change the way they collect money (deposits, all up front, no credit etc). I was going to advise him to set up a new current account with another bank so he can get access to his pension payments without them being swallowed up. Transferring utilities to mum might help I suppose.

 

 

The hardest thing about all of this is finding the money to go bk.

 

 

This bit is also a worry but hopefully the fact that rent has always been paid on time will help. Assume this is more relevant if there has been arrears which there has not:

 

 

What if I rent my home?

 

If you rent your home, your tenancy agreement may allow your landlord to evict you if you go bankrupt. Check the terms and conditions of your tenancy carefully to see if your landlord can do this.

If you have rent arrears from before the date of your bankruptcy order, your landlord can still take court action to evict you from your home. However, they cannot get the arrears back from you because they are a debt that will be included in your bankruptcy.

If you build up any rent arrears after the date of your bankruptcy order, your landlord can take action to evict you and get the arrears back.

 

 

In general, I am amazed that he has managed to keep all the credit card and loan payments going for such a long time. Don't think he has even been late with any of the payments once. It's just that now, we can see the cliff edge approaching fast.

 

 

NEW INFORMATION: Something quite important that happened last week is that a man came to see him who represents the benevolent charity of his main employer (the one he spent most of his career at) to see if they could help. He suggested trying to deal with each individual debt and get interest frozen etc and go back to him, hence why I started on that track on this thread. I understand that he offered to help with the costs of doing this. Perhaps, if it comes down to bk, this is something that they can help with cost-wise. Will investigate this.

 

 

Whatever course of action we take, I think it is key to have these guys involved as they should be able to offer support in some way (I just don't know exactly what they can and cannot do). The benevolent fund is there to help those in hardship and I can see the possibility that they might help a little going forward. In terms of debt, I think they want him to do everything he can do for himself in the first instance and then go back to him. No way they would be using the benevolent fund to pay debt though in my opinion but their backing could be a very useful thing.

[sequenci]

Hello again.

 

The thing to do is to consider how long it will take for the situation to be resolved with each option considered. I really don't think a 12 year DMP is a particularly worthwhile process for a 77 year old - it's important to bear in mind that a creditor can still apply interest and take further action under a DMP - and many of them probably will at least consider it. The property is very likely to be perfectly safe - bankruptcy clauses are generally in place where the tenant has significant rent arrears which would be written-off as per the order - thus the landlord can seek an easy eviction. Landlords just want their rent, they don't care too much about the wider circumstances of their tenants. Informally requesting a write-off is an option, but creditors generally do this where someone has tangible proof that they are very, very unwell.

 

Although there could be potential challenges to pre-April '07 debts, unenforceability should not be assumed - it can be a long drawn-out process, in addition we are starting to see evidence of cases where judges have found in favour of the claimant even where the CCA requirements have not been met. It's an option but it's a question of time and effort. Of course, if a claimant does get their judgment - you'll be able to ask the court to pay via instalments which should prevent further enforcement. Bankruptcy is a simply process, and once people know how it works it's relatively easy to do. I take on board that some are put off the idea and that there is a degree of stigma attached to it - especially (if you don't mind me saying this) with the older generation. Quite rightly so, it IS an option that should be viewed as a last resort BUT it's also the only sure fire way of getting rid of all of the debt and allowing piece of mind. And I think that's important.

 

- Seq.

[theoldrouge]

bk is very hard to sell to my generation, it goes back to what we were taught 60yrs ago:-). You should certainly give serious consideration to dx's solution. Well written letters may achieve alot without too much stress