Should I consolidate Daughter's debts?

jane528

Please can anyone help me? I'm so worried.
21 year old daughter, earns £12000 pa. (takes home £825 per month)
debts totalling £15680.
One loan with Egg, balance £8061, payments £175 per month due to be repaid in 4 years time.
£1000 overdraft
Credit cards totalling £6618 (none at rates below 15%)

She is meeting repayments (about £400) per month but with other living expenses, rent, car etc. she is still spending too much and is continuing to add £200 or so each month to her cards. We've been through her expenses and while she could cut them down a bit, she's not able to reduce them enough to stop increasing her debt. She is so down about it.

Her salary will rise over time, but due to health problems she's not well enough to take on a second job to increase her income now.

Should I take out a consolidation loan on her behalf over say 10 years to reduce her monthly payments?
I presume no-one would give her an unsecured loan for £15K when she only earns £12K. Or would they if I was gaurantor?
I'm confident she would give me the repayments money each month and I've said it would only be on condition she cancels all her cards and doesn't get anymore!

Any advice very much appreciated,
A very worried Mum.

newleaf

I guess my concern would be how would you ensure she cancelled all her cards and didn't take out any more? I've been down the consolidation route myself a number of times and frankly it doesn't work. Consolidation just makes day to day living easier for a while, and then all good intentions go out of the window. Until your daughter has a lightbulb moment and resolves to get herself out of trouble, I don't think bailing her out will help. Sorry, I know how worried you must be, and I'm sure this isn't what you wanted to hear, but she is 21 and has to learn to take responsibility for her own actions.

CLAPTON

take out a loan on her behalf or guarentee a loan only and only if you can afford to pay if she defaults.....she may not want to but you say she has health problems (even if not, anything can happen...lose her job, accident ...anything)
if you can't, then dont even consider it.

can she move back home, does she NEED a car etc. ect.

calleyw

I know that she is your daugther and you really want to help. If you take out a consolidation loan I fail to see how you are really helping her.

Yes you are clearing the debt but how do you know that she is not going to stop paying the loan and you are stuck paying off someone elses debt. Not nice to think about your own daughter doing that but it could if you fall out over something.

Can you post a SOA on her behalf and maybe some people on here can see if she can cut any more from her outgoings.

Also there are many here who tell the same story as newleaf and end futher up in the brown stuff. Because of consolidation loans.

Is there no way to increase income like selling unwanted stuff on ebay, renting out a room if she has the space.

As has already been mentioned is there any chance that she could move home until she has cleared her debts.

All the best what ever you choose to do.


Yours


Calley

lynzpower

My mum and dad consolidated my debts for me, I promised them I wouldnt run the debt up again, but I did. thats why IM in the state i am today

As a daughter whos parents were convinced they were doing the best thing for me, helping etc, I ask you,please refuse. Learning about budgeting is something I wished Id done a long time ago, before I got my parents embroiled in my debt.

the best thing you can do for her, is enable her to become financially independent. Refer her here

Good luck

jessicamb

It sounds harsh but she needs to be able to sort it out for herself.

Without knowing any details could she possibly move home and sell the car? This should give her some extra cash each month to pay the debts and get back on top of the situation.

Good look

moneycrisis

Hi Jane,
if i can possibly offer some independant advice from the otherside. I'm 20 live at home and got myself into debt. I earn similar amounts and in similar amounts of debt strange really. (plus to add to the wierdness my mums name is Jane)

Anyway to the matter in hand. My debt was gambling related and in january was around £7k. I went to my mum and dad and they got a loan out for me I told them i had been spending frivalously and wanted to sort it out. they made the mistake of trusting me and gave me the 7k to pay off my debts.
Lets just say it didnt go on debts and 6 months down the line i was in double the trouble. I had an epiphany with my gambling a couple of months ago which has stopped and a light bulb moment last week.

Of course mum and dad were the people to go back to and thats what i've done tonight. I dont want this sort of debt and this will effect my chances of getting a mortgage and all sorts of things in the future and i want to get rid of it.

They said they are here to help but will not take further loans for me (which i didn't want) I had to realise I wanted to do this and that before I was living outside of my means. I believe that if you did consolidate your daughters loans cc etc it may be counter productive.

She has to realise that she needs to cut back to get herself out of trouble. I have sat down with my mum and dad given them my credit cards. I have worked out a monthly spending budget and have asked my mum to check my account weekly. Partly for her piece of mind and for me knowing she will be checking. Its not your fault she is living outside of her means. Like me she is 21 and at some point we have to learn.

There is a point to this my mum and dad loaned me money in january and it didnt change anything. Now i want to sort it out and realise that consolidation isn't the best option. Maybe you should try and make her understand this. If you consolidate the debt to reduce the payment so that she can live within her means it will mean taking it over a long period and paying back a lot more and will she want to be paying £200/300 for the next 7 years or whatever

I think its great you want to help but you have to be sure you are helping. Try and make it like a team. hope this helps. Chin up and the way im trying to think im only 20 so got enough time to sort things out. I need to learn to deal with my money and so does she

K9cuddles

Well I'm 24.. still at home which at the moment is the BEST way my rents can help me out!!! Means I get cheap housekeeping means I can pay more money of my debts! I don't think the learning curve would be so memorable if they paid it for me (which I wouldn't expect and glad they aren't.. not that they could!).

Having my light bulb moment has changed my attitude to money and my lifestyle.. you need to change both to STAY debt free IMHO.

Good Luck!

Kevicho

I think just about everybody has hit the nail on the head here.

You will not be helping her out by paying this loan for her, in fact it will probably lead to resentment along the road when her spending habits continue and she is no longer able to pay you back.

I think your daughter first of all needs, to realise that she has a problem, shock her with the fact that even if she didnt pay tax, living expenses or for fun for a whole year on her current salary, then she would still be in debt

I think what you should do is get jher on a budget and start paying it off

6 months later if she shows she is willing to stick it out, then get the loan (as long as its cheaper) to help cut interest if you feel you would want to do this.

Hopefully by then however your daughter will have realised the value of money.

All the best to you and your daughter, shes a lucky girl to have a caring mum like you

devon-gnome

My daughter was in a similar position at 24 and though it hurt like hell, I refused to help her out and gave her no option but to go bankrupt. This was a year ago and since then, she's been soooooo careful with her money.

Prudent

I do feel for you. No parent wants to see their child struggle when they could alleviate the problem. From the wisdom, gained from experience, here its osund like it would be best to let your daughter meet the problem. You can still be there to discuss solutions with her. Do point her in the direction of this forum. I am sure she would learn things that would help keep her debt free long term.