Interest charges

Ashhouse

I am trying to help my 60 year old mother settle the outstanding care home fees for my deceased grandmother. The outstanding amount via remittances advice from the council states the amount due/payable of £15,327.27. Last statement received Dec 2009. After contact via phone to establish suitable payment method a letter arrived stating a further £8,244.71 was payable as interest on the original fee, with no calculation or interest rate given.

My question is are the council required to have shown this interest charge on the statements received?

As my mother only receives a small amount of benefits and the house this charge relates to is in poor state of repair she could be conceivably paying this for the rest of her life.

The Initial amount is not being disputed but if the council had shown interest accruing on the statements then we wouldn't be in this situation now. As my mother only ever saw the total amount due being the £15,327.27.

wealdroam

Does your mother owe this money or is it a debt of your grandmothers?

Either way, I would advise getting over to the Over 50s board or the Debt Free Wannabe board.

I've sent a PM to our board guide Squeaky to get this thread moved.

bris

There is a charge order on you late grandmothers property, this is normal and will generate interest until it is either paid or there is nothing left. The best advice is to sell the property ASAP and pay the debt, if your mother insists on paying it in very small amounts the council may end up with the whole value of the property, or they may even be able to get a court order forcing the sale. This would depend on who lives there now, but it doesn't stop the debt rising.

Fifty-six days after you die, interest will be added to the amount the council social services have paid for your care home fees. Local councils have a right to set their own interest rates, but it should be reasonable. It is suggested that the interest charged should not exceed the County Court Judgement rate which is about 8%.
When the property is sold, the money the council paid for the care home fees will need to be paid back by whoever inherits the property together with any interest. You may cancel the deferred payments agreement at any time, but would need to find alternative ways of meeting the care home fees.

squeaky

Hi,

I think that some of the members of the over fifties board might be better placed to help you with advice here, so I'll move the query across for you. Good luck

Forum_Team wrote:

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL='forumteam@moneysavingexpert.com']forumteam@moneysavingexpert.com[/EMAIL]

missile

That seems a lot interest. How long has this debt been outstanding?

Your mother may like to seek advice from a solicitor. Most give a free initial consultation. Given your mother's financial circumstances she should qualify for legal aid.

alanq

bris wrote: »

Fifty-six days after you die, interest will be added to the amount the council social services have paid for your care home fees. Local councils have a right to set their own interest rates, but it should be reasonable. It is suggested that the interest charged should not exceed the County Court Judgement rate which is about 8%.
When the property is sold, the money the council paid for the care home fees will need to be paid back by whoever inherits the property together with any interest. You may cancel the deferred payments agreement at any time, but would need to find alternative ways of meeting the care home fees.

The above seems to have been copied and pasted. Why not post a link to allow others to find further information, assess its accuracy and give credit to whoever supplied the information? This appears to be the source http://www.firststopcareadvice.org.uk/downloads/resources/1546.pdf

Savvy_Sue

Welcome Ashhouse.

Ashhouse wrote: »

As my mother only receives a small amount of benefits and the house this charge relates to is in poor state of repair she could be conceivably paying this for the rest of her life.

Can we just get this straight: your grandmother died owing care home fees, and there is a charge on a property to enable to council to get this money back? Whose house is this, and who is living there now?

wealdroam wrote: »

Does your mother owe this money or is it a debt of your grandmothers?

Very fundamental question. Might also be worth saying how old your mother is, decades will do if that's an indelicate question.

The point is that if your grandmother died without having anything to leave, then it's not your mother's debt. If your grandmother had a house, then selling it might indeed be the best way to go, but not if it leaves your mother homeless (obviously).

Just wondering how that amount of arrears was allowed to build up!

Counsel and Care and Age UK may have helpful information on their websites.