Payplan + Retirement - please help as I want to help my parents

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TLOR
TLOR Posts: 44 Forumite
Hi,

I am new to this forum and this is my first post, an honest plea for advice so I can help my parents.

Both my parents have worked honestly most their lives in factories and down dock, my father sadly has always thought an addition to gambling and the bookies.

A few years ago my mother discovered that he'd ran up a £40k+ debt so they went to payplan for help.

Since then they have stuck to the terms of the agreement and avoided the options of bankruptcy etc (they are old fashioned and they try to pay off their debts when they can).

Basic facts are...

- Mother is 62 and retired
- Father will turn 65 in March and will (hopefully) retire.
- They have a mortgage SOLELY in my mothers name of 80k.
- House value is somewhere between 100-120k.
- The mortgage has been pad via my fathers salary for most of last 20 years.
- Outstanding debt I believe is £40k+ as they have had offers to settle for 22k which my mother said was about half the total.

My question is what will happen when my father retires, and is there anything they can do to get out of this mess (pref without losing all the equity in their house so they can have some kind of enjoyable retirement)?

I understand my father created this mess but I am just trying to understand the options open to them as I have seen this debt take a huge toll on their marriage and well being.

Thanks

TLOR
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Comments

  • molerat
    molerat Posts: 32,007 Forumite
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    edited 15 November 2011 at 1:40PM
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    Answers to a few questions needed.

    Who has their name(s) on the deeds to the house ?
    Whos accounts are the debts on, joint accounts or single ?
    Are your parents financially linked through bank accounts ?

    A reduction in income could result in a reduction in payments though.
  • TLOR
    TLOR Posts: 44 Forumite
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    molerat wrote: »
    Answers to a few questions needed.

    Who has their name(s) on the deeds to the house ?
    Whos accounts are the debts on, joint accounts or single ?
    Are your parents financially linked through bank accounts ?

    A reduction in income could result in a reduction in payments though.

    Hi Molerat,

    Thanks for the reply, I really appreciate it.

    My mothers name is the sole name on the lease and she tells me that they don't have any shared bank / accounts (so I assume the debt is all in my fathers name).

    Regards

    TLOR
  • molerat
    molerat Posts: 32,007 Forumite
    Name Dropper Photogenic First Post First Anniversary
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    Could be worth getting credit reports for each of them http://forums.moneysavingexpert.com/showthread.php?t=51087 to see what they show. If the debt is purely your father's and they are not linked then they have more options.
  • TLOR
    TLOR Posts: 44 Forumite
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    molerat wrote: »
    Could be worth getting credit reports for each of them to see what they show. If the debt is purely your father's and they are not linked then they have more options.

    Thanks for the reply, that is a good plan to be sure. (Apparently my mother paid a solicitor to remove my father from the deeds and put the house completely in her name the last time his addiction got them in trouble!).

    Assuming they are not financially linked what would their options be?

    Any help appreciated
  • TLOR
    TLOR Posts: 44 Forumite
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    Bump :)

    If anyone could give some advice on this it would be great.

    Just want to know what options my parents have when they retire?

    If they sell their house would payplan take half?

    If they are only on pensions how much would they have to pay payplan and if it's minimal would they really care?

    What is the lowest likely % payplan would reasonably except (anyone with experience know this?) - maybe my parents could sell their home and settle?

    Regards

    TLOR
  • Payplan_company_representative
    Payplan_company_representative Posts: 133 Organisation Representative
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    Hi TLOR.

    I think the best thing for you to do is get your parents to speak to their case officer at Payplan as they have details of their situation and will be able to give accurate answers.
    If they were to sell their house, if they are in a DMP we wouldn't have any claim over the equity.
    Their payments to us are based on what they can afford so we would review their income and expenditure to see what is reasonable for them.
    Without knowing creditors etc... it is hard to say a % for what would be accepted as some creditors work on a case by case basis and others have strict criteria.
    As I said above get your parents to speak to their case officer or if they want to give you permission to deal with this on their behalf they can.

    Let me know how you get on.
    Official Company Representative
    I am the official company representative of Payplan. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • TLOR
    TLOR Posts: 44 Forumite
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    Hi TLOR.

    I think the best thing for you to do is get your parents to speak to their case officer at Payplan as they have details of their situation and will be able to give accurate answers.
    If they were to sell their house, if they are in a DMP we wouldn't have any claim over the equity.
    Their payments to us are based on what they can afford so we would review their income and expenditure to see what is reasonable for them.
    Without knowing creditors etc... it is hard to say a % for what would be accepted as some creditors work on a case by case basis and others have strict criteria.
    As I said above get your parents to speak to their case officer or if they want to give you permission to deal with this on their behalf they can.

    Let me know how you get on.


    Hi,

    Thanks for the reply, much appreciate it!

    Sadly my parents are still very old school and they really don't like talking about their finances let alone let me speak on their behalf. But I am getting their slowly and will suggest it soon, I just want to arm myself with as many options are possible before this.

    With regards to the equity, this is of course the biggest concern as I read somewhere that part of the payplan deal was that after a certain period such as 5 years payplan can then force some kind of equity release from the sale of the home.

    This is obviously a grey area in my parents case as the house is in my mothers name and not my fathers who owns the payplan debt.

    If this is the case then surely payplan wouldn't allow people to release equity / sell the home before this period was up?

    Although in this case maybe it is the case that my mother can release equity / sell the home and she doesn't have to inform payplan?

    If you could help with this area of confussion it would be a big help and possibly give thme more options.

    Cheers

    TLOR
  • Payplan_company_representative
    Payplan_company_representative Posts: 133 Organisation Representative
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    Are your parents in an IVA or a DMP? In an IVA they would be required to seek a remortgage in order to release equity, however in a DMP no such thing can be enforced.

    Try to find out the type of plan and they I can hopefully give you some more details.
    Official Company Representative
    I am the official company representative of Payplan. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • dancingfairy
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    I agree with the above - they / you need to know exactly what they have signed up for. A dmp and an IVA are very different beasts indeed.
    If it's an IVA then again they would need to read the exact terms and conditions they signed up to but normally you are expected to attempt to remortgage to release equity - normally there is a clause about what if you can't remortgage etc etc. The issue of who owns the house and would would need to happen would presumably have been addressed at the start of it was an IVA.
    Do find out exactly what's going on.
    Best of Luck
    df
    Making my money go further with MSE :j
    How much can I save in 2012 challenge
    75/1200 :eek:
  • milliemonster
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    Agree with the above, what I would add is that if they are in an IVA, then it is unlikely they would be able to remortgage in the current climate, instead they would probably be expected to extend their payments for a further 12 months beyond the 5 year term, how does this fit in with your dad's retirement plans?
    Aug GC £63.23/£200, Total Savings £0
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