£260 min payments, £5 off the total, please help

Bluefairy

Hi there,

I am trying to help my parents get out of the terrible debt trap they are in. I have had to go into a Trust Deed myself so am trying to use my experience to help them and thankfully they are not as far down the line as me BUT they are in a mess. They have many cards and loans between them, and can only meet the minimum payments each month (as a result, they end up using other cards with space on them to buy food / fuel etc so that their earnings can go to pay for the minimum payments). A couple of the cards are so far gone that a minimum payment of £260 on one only clears £5 off the total and on another £60 pays 50pence! It's insane and horrendous watching them struggle. They work hard and have been through periods of seriously low income (one's self employed) hence the shortfall.

I told them to try Lloyds first of all as 2 cards and 1 loan are with them, one of their cards being the £260 min payment one, to see if they would let them add the card to their loan and they point blank refused. After decades of custom, current accounts, insurance etc etc they said 'oh you have to much in your name.. oh you just have too much in your name already' etc. I can't believe that given that they got so much government help recently! Surely they aren't allowed to make sure their customers are kept in this minimum payment death trap, are they not bound by some kind of lending code these days? Needless to say my parents were really upset and couldn't believe their bank would be so heartless after so many years. I tried to tell them, banks just don't give a s... about their customers..

SO, I need to try and find some alternatives,but if I start applying for more 0% cards or loans, will each credit search generate the same thing? I checked their reports on Equifax and there have been no missed payments.

I thought about a giant consolidating loan but at their age (early 60s) and the nasty things consolidating seems to do they don't think it's an option.

I just don't know what to do and I hate watching them go through this as I know how horrendous it was for me and I'm a bit more resilient but it still affects you.

Any help much appreciated

Paul_Herring

I told them to try Lloyds first of all as 2 cards and 1 loan are with them, one of their cards being the £260 min payment one, to see if they would let them add the card to their loan and they point blank refused. After decades of custom, current accounts, insurance etc etc they said 'oh you have to much in your name.. oh you just have too much in your name already' etc.

Was it made explicitly clear that the loan extension was to clear the debt on the card(s) and the card(s) would be cancelled once cleared?

Hax

Have to say that I am somewhat surprised by Lloyd's attitude - with them having control over both the cards and the loan, then they could have easily extended the loan, paid off the cards and then closed them, without your parents even getting a whiff of the money.

If you haven't specifically told them that you want to do this, and have just asked them to extend the existing loan, then I can understand them saying "no" as for all they know, they'll give your parents the money and they'll just blow it on something other than clearing the cards.

As for a consolidation loan, unless the underlying problem that caused the huge debt to be run up in the first place has been addressed, then all a consolidation loan will do is give a few months breathing space of lower payments, freeing up the credit cards to again be used as a financial crutch.

Bluefairy

Paul_Herring wrote: »

Was it made explicitly clear that the loan extension was to clear the debt on the card(s) and the card(s) would be cancelled once cleared?

Hi there, yes they explained to Lloyds that they were completely trapped with their cards and that they wanted to add one (at least) to the loan as it is much lower but they wouldn't let them. Ironically, the worst card was used to buy a new roof that Lloyds insurance wouldn't pay out for because apparently, after 30 years of custom, they 'don't do part flat roofs':mad:

Saucepot

A trip to the citizens advice might be in order.

Bluefairy

Does anyone know if there is some kind of lending law I can quote in my response? Wasn't there a Lending Code or something that came into play after the bank's fk-ups and the rescue of Lloyds by the taxpayer that means they have to give people a fair chance to pay off their debts and not make it worse for them?

YorkshireBoy

Bluefairy wrote: »

Wasn't there a Lending Code or something that came into play after the bank's fk-ups and the rescue of Lloyds by the taxpayer that means they have to give people a fair chance to pay off their debts and not make it worse for them?

Not specifically to do with any "resuce", no.

Here's the Lending Code...

http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf