Irresponsible lending and how to address it

PAH1

Been looking into my parents finances since my dad was admitted to hospital.

Absolutely astounded that my parents (both 61 so my mum is already of pensionable age) and both earning barely above the minimum wage have managed to accumulate 'unsecured' debts of over 40k!

Seems the banks and finance companies have been somewhat lax in their ability to decide when people are taking on too much debt and their long term ability to pay it back. No doubt thinking my parents home can be called on to secure their previously unsecured debt via those lovely things called charging orders when it inevitably went pear shaped.

At this moment my anger at both my parents being so damn stupid to allow themselves to get into this situation and the loan companies not doing their duty to prevent it is making me consider drastic action:

1. stop all payments to these disguised loan sharks
2. move parents into accomodation neither owned or linked to themselves or any relatives, with the additional advantage they would probably be able to claim housing benefit to cover most or all of the rent if my mum finally retired and dad gave up work, assuming he'll be able to work when he comes out of hospital!
3. transfer ownership of their house into my name (me having paid off the mortgage for them) and be prepared to sell it to break all ties between my parents and their only valuable asset.
4. ensure my parents have no other assets worth being taken by bailiffs (sell their car and I'll give them one registered in my name etc)
5. if need be my dad or both parents can declare bankruptcy to walk away from all debt. At least then they'd have to go back to the old tradition of only spending what they can afford.

So what am I missing or is it really this simple? Can't think of a simpler plan at the moment, but I'm all ears!

Alternatively my mum can work herself into a grave trying to support both of them while the 'loan sharks' harass and threaten them into paying what they could never realistically have afforded! OVER MY DEAD BODY :mad:

michaelvintner

What has your parents finances got to do with you?

They are both adults and capable of making their own decisions. Your dad may have been admitted to hospital but unless he has gone senile there is nothing you can do.

Stop being nosey, if you were my kid I would have a serious talk with you.

Joe_Bloggs

A miss-managed financial situation can lead to stress. The realities of stress can manifest themselves in many ways. One of them is through stress related illness, another is relationship breakdown.
J_B.

inmypocketnottheirs

Whilst I appreciate your anger and concern, I would advise extreme caution in your steps 2 and 3 above. If they were to go bankrupt, then the Official Receiver would look back through their affairs and undoubtedly reverse any transactions done to deprive creditors.

The OR is not concerned about irresponsible borrowing, but it would involve him in any steps had been taken prejudicial to creditors interests. This would certainly greatly increase the cost of your parents bankruptcy, should you go down this route.

Partially I agree with the poster above who says, what business is it of yours? I am sure in similar circumstances, I would feel and react the same way. However, I think a better course of action would be to contact CCCS or Payplan, both of which are registered charities that deal with exactly this type of consumer debt. Your parents will be able to default on the debts (which will totally screw their credit history and ability to get further credit - but that may be no bad thing) and then negotiate minimum payments to suit their budget.

Have a look at the Problem Debt Help link in the panel above. There is a lot of help and advice available there.

Hope this helps.

PAH1

Yes, after looking around I think the simpler plan would be to:

1. contact all loan/card companies informing them of the circumstances and offer a token payment until things improve (say £1 or £5 per month, depending on how much spare cash my parents will have)
2. wait until things improve (such as if my dad can go back to work) then reassess the situation


The advantage of making token payments (that are proportionate to how little spare cash my parents will have with my dad not earning) shows an attempt has been made to pay what they can afford if it should go to court. Sounds from what I've read elsewhere that the court would be unlikely to request higher payments if it can be proven they are unaffordable, so more likely the debt would eventually be written off.

As for the comments about what has it got to do with me, well if you can't help your family when they desperately need it, what use are you to your family! Maybe if I'd taken more interest in their finances earlier they wouldn't be in this mess. Yes they've been stupid but so have a large percentage of the population. I think it's my duty to help them and try to relieve the stress and pressure they've been under, otherwise I couldn't live with myself if this led to worse.

Fortunetely sites like these show there are ways out if you're willing to play the rules, and maybe bend them a little.

Aytoun27

PAH1 wrote: »

As for the comments about what has it got to do with me, well if you can't help your family when they desperately need it, what use are you to your family! Maybe if I'd taken more interest in their finances earlier they wouldn't be in this mess. Yes they've been stupid but so have a large percentage of the population. I think it's my duty to help them and try to relieve the stress and pressure they've been under, otherwise I couldn't live with myself if this led to worse.

If you really want to help then you need to start by talking to your parents, that way you can decide the best course of action together. They aren't senile, they aren't even that old and you need to respect their wishes.

The banks aren't likely to let you deal with your parent's affairs anyway, as there's no reason why they can't do so themselves. You need their agreement and co-operation before you can take any practical steps to help them.

PAH1

I am not doing this without full co-operation of my parents!

My mum asked me for help when my dad was admitted to hospital. He's sedated and bed ridden much of the time so cannot really do anything about this himself.

She realised she couldn't cope with the bills/debts on her own and has been doing much of the leg work (contacting the card companies, CAB etc) on my dad's behalf, I'm just weighing up the more drastic options should the initial attempts at solving the situation fail or are likely to lead to more stress/problems.

Aytoun27

Fair enough, but your original post does read as if it is you who is making all the decisions.

I still think that you may have trouble with the banks etc though, as they really shouldn't discuss your parent's affairs with you unless they are mentally incapable of dealing with it themselves or unless they've given you legal power to deal with it on their behalf.

PAH1

Yes that's been one of the problems. My mum wrote a letter for my dad to sign asking his card companies to allow them to deal with her while he is in hospital.

All but MNBA seem to have accepted that, they say they never received it and will discuss the matter only with the cardholder. She's sent another recorded delivery, so will see if they stop being useless.

So far I've been letting her try to deal with it all, offering assistance where I can, but decided it's better to at least have a plan or two up my sleeve in case I need to step in and take over should it get too much for her.

INT1

It works both ways really.
Everyne blames the banks for being over commited. I suppose it's the banks fault as well that person made the spends etc?!

I am sorry to hear of your fathers illness but perhaps an arrangement can be set up or a suitable repayment plan.

PAH1

Yeah currently my mum wants to 'do the right thing' and try to pay off as much as possible. Will see how that goes but I'm making a list of potentially easier more affordable alternatives to fall back on.

The issue I have (and reason for the thread!) is that it seems they've managed to get into more debt than people in their 60s should be able to get anywhere near. Most of it seems to have been in the last 5 years, though I've not delved into the history of it all to see how it built up.

One of the things I'd like to do, though not sure how easy it would be, is see how much they actually originally borrowed and how much is interest, other charges, and 'teasers into more debt' such as raising credit limits without request that then gets swallowed up with interest and other charges!

I cannot believe if they went to any reputable finance company and asked for 40k of unsecured debt they'd get anywhere near that, so how have they been allowed to get to that level?

It's that that is making me think there has been some irresponsibilty from the finance companies, though no idea (yet) of what can be done to use that line of thinking to alleviate some of the problem.