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Credit Card Charges

We've just found out that our father has been withdrawing money from one credit card to pay the other, with 6 credit cards, robbing Peter to pay Paul's minimum payment has meant spiraling charges. Just got the last 6 years statements from 1 card - (MNBA) and he has withdrawn £6000, payed £3500 charges and still owes £6000. The charges for withdrawal and interest has just mounted up. He was never overdue with payments. I am not looking forward to the other 5. This was the smallest. He cannot pay the minimum because all cards have MAXed out. He also has a loan of over £20,000 and he is only on a small pension, HOW CAN I lessen the debt? Any idea's.

Comments

  • Hi,

    Maybe you should post this on the Debt Free Wannabe part of the forum - they can give you advice about debt management plans etc, which might be the best solution.
  • Thanks GirlTuesday, I was initially hoping that rather than interest, there would be charges I could claim back.... But he was a 'good payer' always on time. Do you khow what happens if he dies (As he is 76 and already had a stroke).Heavens forbid. I wouldn't want the debts going on to my mum...
  • Astaroth
    Astaroth Posts: 5,444 Forumite
    They go against the estate (unless he has a valid PPI policy but given his age this is unlikely). So if his estate is £20,000 then this would have to go against the cards and loan and the rest gets written off. If his estate is more than the debt then the debts get paid and the remainder gets divided as per the will/ goes to his wife.

    Lenders can be bad by saying that partners have to pay for credit but this is not the case unless it is in joint names (applies to the loan as credit cards are almost always in a single persons name even if others have "secondary" cards)
    All posts made are simply my own opinions and are neither professional advice nor the opinions of my employers
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  • anniecave
    anniecave Posts: 2,463 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    I'm not sure how it would be treated if the wife is living in a house which they both own. I think a share of the house would count as part of the estate to be offset against the debts. Not good!
    Indecision is the key to flexibility :)
  • anniecave, not according to this:

    http://www.thisismoney.co.uk/tax-advice/article.html?in_article_id=413126&in_page_id=11

    Which says:

    Any assets that are jointly-owned by the surviving spouse, such as the family home, will be classed as being outside the deceased's estate and full ownership will be passed to the spouse.
  • Astaroth
    Astaroth Posts: 5,444 Forumite
    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093

    The above government link says the law is different but it does depend if they are joint tenants or tenants in common.

    Joint tenants is the most common and this is what the link says:
    In this case you owned the whole property together and the deceased person's share passes automatically to you.

    But even though it's now in your estate, you can't ignore the debts. Creditors can apply for an 'Insolvency Administration Order' within five years of the death. This can have the effect of dividing the property in two and force a sale. So it's in your interest to try to come to an agreement with people who are owed money, and try to pay them yourself.
    All posts made are simply my own opinions and are neither professional advice nor the opinions of my employers
    No Advertising or Links in Signatures by Site Rules - MSE Forum Team 2
  • Phoenix79_2
    Phoenix79_2 Posts: 1,434 Forumite
    Why has he got himself in this situation? Whats the underlying issue? Surely at the age of 76 on a small pension bankruptcy is the only (and best) option.
  • I think they can definitly ask your mum for the money if she is named on any of the loans, cards, etc or if she is financially linked with him in some way (named on the mortgage, joint accounts, etc)....if this is the case it may be worth thinking about maybe legally buying their house from them (you get the mortgage, they get the money, they give you the money, you pay off the mortgage..all before he files for bankruptcy)...quite sure they can say what they like about what happened to the money, upto a point of course....

    Someone please correct me if i'm wrong...

    Another idea is to write to the cc's and loan people and offer to pay a very small amount each month (like £5 each? maybe less? whatever your mum and dad can afford to pay) they should take this offer...If they do take it to court, the judge will tell them to accept it, if like you say, he is only on a small pension....if your dad does die and he and your mum are linked she can do the same thing and they'll have to swallow it...as long as your not finacially linked to either of them the debt will die with your mum...this works...my wife pays £10 a month to 5 lenders (egg cc, egg loan, barclaycard, etc) she's 26, and works (although i think she told them she was unemployed, ie. claiming dole money, equivalent to your dad's pension probaly)...2 lenders out of 4 of them took her to court, cause they wouldn't accept her offer of £10 a month....now they are...and barclaycard recently accepted her offer after threating court...(and she owns her own property...her name ONLY on mortgage and deeds)
  • My parents own their own house (probably in the reagion of 150k). All the loans and credit cards were unsecured and only in my fathers name. Debts total 50k. Bankruptcy may mean selling their asset - their home which they wouldn't want to do. If I purchase the house, the debtors can still (up to 6 years) try to 'grab' the asset, claiming fraud. I have looked into IVA's but because he has an asset greater than the debt, this isnt an option. The CAB were involved 6 months ago but were poor. They failed to supply important pieces of information, i.e. open another bank account.
    I am trying to raise the money myself and make the credit cards and loan an offer. Any one any idea's what they will accept? A financial statement was drawn up and he is currently paying monthly installments to all, which leaves him with NO LIFE. My mother suffers as a consequence and also has poor health.
    The last loan was given when he was 72. With the monthly repayments greater than his pension although legally ok, I believe it was morally wrong. Because of old age and health problems (including a stroke) he could be sold anything and if the seller is on commission, -- easy money.
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