Helping my Brother with debts

carlw

Hi All,

I am in he process of helping my brother sort his finances out. At the weekend, i went through piles and piles of paperwork for him, and arrange all his bills and debts so he knows where he is. Hes been living in the dark for far too long. I have put together a SOAs which is not actually too bad, there is quite a large Credit card £13,000 with which he only pays the minimum each month so it has remained the same for years. He also has several Direct debits arranged for the day before he gets paid so these have been bouncing every month and as a result hes been getting £100ish bank charges every month. Obviously these are all going to be moved now we know about them.

My question really is, what can be done about the credit card? His credit rating will be shot because of regularly going over his overdraft limit and returned DDs, plus no credit card company will give a limit of £13,000 and id be surprised if he can get enough credit to cover this over several cards either, or a loan. He also has £2500 overdraft limit which is maxed by payday each month, but im more concerned about the credit card initially.

He can afford to pay £300 a month but at this rate and with interest its not going to reduce very quickly, are there any chances of getting interest frozen or reduced, without an IVA or going through a debt charity?

Many thanks

Carl

Tixy

Hi

If he can afford to make the minimum payments then its very unlikely you will get interest frozen or reduced. Your brother is in a common situation and all he can do is try to minimise all other costs to maximise how much he can put to this card.

He could try calling the card provider to see if there is anything they would do, some card providers have been known to give people 6months at a reduced rate to help them on an informal basis.

Does he know to opt out of any rate jacking APR increase they tell him about?

Any other way he can make some more money to pay a chunk off this debt? sell anything he doesn't need? get a second job or overtime?

Is he paying any PPI on the card each month and if so has he considered if he needs it or whether it could be cancelled?

Has he always made the minimum payment by DD? If not you could check back to see if there were any old card charges applied to the account that he could reclaim.

carlw

Thanks for your reply,

It took so long to get all his paperwork up to date over the weekend and put an SOA together that that is as far as i have got as yet. I have a list of thing to work through, from moving DD dates to closing old Credit cards, ect. What i hoped to do was reduce the interest asap and then look at ways of reducing the balance. I havent yet checked to see if he pays PPI, and i know he pays by DD but that doesnt mean some didnt get returned at some point so i need to also check that. Im sure hes had plenty of letters about the rates going up and its too late to do anything about these now. He didnt have any of his most recent statements so i couldnt even check teh rate but based on his balance in September and the DD payment in Feb it must be over 20%.

Can he still apply to the bank and credit card for old statements in order to check for charges? Is there a charge of £10 for these still?

I cleared all my debts and sorted my self out a while ago now, and i managed to claim back bank charges and PPI, ive read this isnt as easy as it used to be though. Is it still worth attempting to claim back:

Bank Charges
PPI
Credit card Charges
Mortgage exit fees

Tixy

Yes he can still ask for old statements/lists of transactions to look for charges and some will charge £10 to provide these. Check first he doesn't have online access to the accounts that you could look at the statements on there for free (maybe he set up online access and then forgot to ever use it?)

Yes worth trying to claim them back still, though bank charges are harder - you have to prove you are or were in financial hardship I believe. There are up to date guides and letters for all on the various reclaim boards on the forum.

Good luck with trying to get him to take control of his finances - I presume the recent statements have been going in the bin? Would he be more likely to read them if you set up online access for him now? or is his bank one of the ones that will send text messages when you near your limit etc? I think this can be useful for people who have previously had a head in the sand approach.