Loan default - urgent advice needed!

Missmuppet_2

Hi all, it's a bit long winded but here we go -
My mum has just been diagnosed with dementia although she was as nutty as a fruit cake before so it's hard to tell the difference! Anyhow i'm trying to sort out her finances to make it very simple for the day to day running of her home.

Last Friday i came across a letter from Barclays about a loan that she had 2 years ago and has defaulted on. Turns out that my sister and her husband had persueded her to have a loan in her name so that BIL could learn to be a driving instructor. Anyhow he never did the training and when taking out the loan for £2,500 decided to do buy now pay next year, and didn't make a single payment in that first year. After 2 payments of £174 they then defaulted and arranged to pay Barclays £30 a month. Personally i thought my mum should've carried on the payments herself but being not so bright she has just been sending Barclays the £30 every month.

They have stopped putting interest on the loan but every month they add the shortfall from the payments (£144). Now the loan stands at £5,500 and the sister is not very forthcoming with any solution on how to pay the loan off. Mum has around £2000 in her bank account but no other savings or property to fall back on.

I thought i might be better to phone Barclays and see if they would perhaps take a settlement of say around £1000 to clear the debt. If they agreed i wouldn't tell my sister and just let her carry on paying my mum the £30 a month or more if i can get it off her.

It's a pretty dirty trick to play on your mother but nothing surprises me any more where my 5 sisters are concerned. What can i do to protect my mum and the little money she has got?

Thanks in advance for your time peeps xxxx Julie

crazyguy

Look after it for her,

cottonhead

I'm not sure if the bank would accept a settlement from ou unless you have power of attorney? If you can do it this way I have to say I would do the same. Seems very uncaring what your sister and BIL have done and you are right to do what is best for your mum. I would try and preserve her savings. Could your other brothers / sisters chip in a bit each ? Perhaps suggest this to the sister who persauded your mum to take the loan. If she knows that everyone will find out she might cough up. If not then splitting the debt several ways will make it more bearable. its not right that you should have to pay it but your are right for taking care of your mum. Good on you and hope it works out.

Missmuppet_2

Thanks Cottonhead, i do have Power of Attorney but it's just taking a little while to get the paperwork through, i think she got stung too with the will company, they charged her over £300 to write a will and POA when she only has £2000 to divide between 6 of us!!!!

Asking my other sisters for a share of the settlement is a no go even if it would bring the issue out into the open, not one of my sisters has my mum's interest at heart and there'd be so much arguing it would be detrimental to her.

I think i'll have to wait for the POA paperwork to arrive and then try to sort it out then. Thanks anyhow

BobQ

Missmuppet wrote: »

Thanks Cottonhead, i do have Power of Attorney but it's just taking a little while to get the paperwork through, i think she got stung too with the will company, they charged her over £300 to write a will and POA when she only has £2000 to divide between 6 of us!!!!

Asking my other sisters for a share of the settlement is a no go even if it would bring the issue out into the open, not one of my sisters has my mum's interest at heart and there'd be so much arguing it would be detrimental to her.

I think i'll have to wait for the POA paperwork to arrive and then try to sort it out then. Thanks anyhow

Have you thought about writing to the loan firm and put it to them that your mother has no means of ever paying this debt and describing the circumstances of the loan and her dementia.

They may agree to write off the loan if they can be persuaded that she has no ability to pay.

BevieB

Hi, Have you made sure your Mum has claimed all available benefits such as Pension Credit, Attendance Allowance or DLA if under 65.
AA/DLA are non means tested and could well qualify if has dementia.

If you mum is unable to deal with affairs you could claim on her behalf and could be made her appointee until POA has been registered.

Just a thought as this at least would increase income.

fermi

I presume the account with the £2000 in it isn't a Barclays one? So no possibilty of a set-off?

How to make offers in full and final settlement

Does she own her home? Have any other assets?

Missmuppet_2

Hi, sorry i haven't responded earlier but my head is about ready to explode! Thanks for all of your replies. BevieB my mum already has all benefits that she can get, my sisters are all experts at what can and can't be claimed so i think she's ok there - i'm sure she could afford the repayments at a push but she's very reluctant to pay as technically it's not her debt.

Fermi, no her money is between 2 banks but not Barclays. She doesn't own a property and has no other assests at all.

After speaking to my BIL he very kindly agreed to up his repayments to £50 a month instead of the £30 he has been paying. I called Barclays to see what, if anything i could do and they have now told me that the debt has gone too far (apparently not one full payment has ever been made!) and so it's has been sold on. I have arranged for the payments to increase to the £50 but am concerned now that baliffs may now get involved.

I think my next step is to write to them to see if i can agree a settlement before it gets sold on - they can only say no i suppose!

McKneff

Bailiffs wont be involved unless its been to court and the bailiffs are appointed after a CCJ is given.

Missmuppet_2

Oh thanks for that - i was getting seriously worried about someone turning up at her door!

chanz4

if they have sold it, it will be moorcroft and they will be in the process of getting a ccj application