Credit Card outstanding balance.. who can be held responsible?

ickle_me

I have a cousin who has around £9k outstanding on a barclaycard. he currently reside with his parents. he pay the minimum payment each month, plus as much extra as he can afford.

What I am trying to clarify is whether the credit card debt is classed as a personal debt, or can the persons parents be pursued for the debt should the account holder become unable to pay the bills?!!

My Aunt has phoned the local CAB, who told her that the next of kin (i.e her) would be responsible, as they reside in the same address, which has freaked the heck out of her. I don't think this is can be right. Surely it is the debt of the person named on the credit agreement?

Also if my cousin loses their job, which given the area he works in, and the current climate.... what can be done about the debt?!!

opinions4u

ickle_me wrote: »

What I am trying to clarify is whether the credit card debt is classed as a personal debt, or can the persons parents be pursued for the debt should the account holder become unable to pay the bills?!!

No. The debt is the liability of the individual. Nobody else.

My Aunt has phoned the local CAB, who told her that the next of kin (i.e her) would be responsible, as they reside in the same address, which has freaked the heck out of her.

Either she has misunderstood what she's been told, or the CAB person who gave her that information is a moron. Either way, it's not true.

I don't think this is can be right. Surely it is the debt of the person named on the credit agreement?

Correct.

If my cousin loses their job, which given the area he works in, and the current climate.... what can be done about the debt?!!

There is still a liability for the debt. Your cousin is still contractually required to pay the minimum payment every month. If they can't, their credit file will be trashed and they'll struggle to borrow again for many years.

Again, the credit record is an individual thing. It doesn't affect the address. As long as your aunt has no joint financial relationship with your cousin it won't affect her.

ickle_me

Thank you, Opinions.

InsideInsurance

On the basis of talking about "next of kin" was your aunty asking about if your cousin was to die what would happen to the debt?

A debt is purely the responsibility of those on the credit agreement including any guarantors. If a credit card holder dies then the bill is passed to their estate, if there is insufficient funds in the estate to clear the bill then it is written off.

Your aunty wouldnt be personally liable for any of your cousins debts unless they signed to be a guarantor for it

lisyloo

No. The debt is the liability of the individual. Nobody else.

This is true, although I think there is a concern for parents if the baliffs come round and seize goods.
I know there are rules, but in practice balliffs do as they please, so there is a danger of the parents goods being seized if it got that far.

what can be done about the debt?!!

The option available to the company are
1. An agreement even if very small and out of benefits.
2. A court judgement which could ultimately mean baliffs being sent round to seize goods.
3. The credit card comapny write it off.
4. Personal Bankruptcy - there are obviously consequences of this,

Normally what happens is that an agreement is made even if it's just a few £s a month because companies would rather have something rather than nothing.
Remember for them this multiplys across thousands of people across the country.
So chances are it will all have to be paid back eventually.

No-one else is liable in life or in death.

So chances are an agreement of a few £s a weeks whilst on benefit, then pay the rest back when he starts working again.

RobertoMoir

If the phrase "next of kin" was used by CAB, I suspect they thought your aunt was asking what would happen to his debt if he had passed on. The advice is still incorrect even if that's what they thought, but at least its an understandable mistake (to the extent that many people make the mistake) at that point, otherwise what the CAB said is not only wrong but nonsensical. This is why I don't recommend the CAB to people myself.

If the credit card is your cousin's credit card (and not a second card on someone else's account) then the debt is your cousin's debt and his alone - and won't go away if he loses his job any more than others can be made liable for it. As others have said, this is it.

@lisyloo - the type of bailiffs that would be instructed if a debt went to that stage are county court bailiffs, who are less "bloodthirsty" than most of the other types, to be fair, and they'd be unlikely to remove goods if there wasn't reason to think they were the debtors. In any case, were a bailiff to remove goods that belonged to someone else - you're right, there are ones out there that would - someone who understood their own rights and those of the bailiff could have those goods returned very quickly with a big apology attached.

lisyloo

someone who understood their own rights

Exactly.
This is a risk for the parents as you are saying they have become knowledgeable about how to get their goods back.

It's isn't that easy in a shared house to know what belongs to whom.
For example a TV in the son's bedroom could be the parents property.

I don't think it's a massive danger and obviously they'd know as it would have been to court and there would have been many letters.
However I do think it is worrying for the parents because if it's gets to that stage they do indeed have to worry about not getting their property taken in the first place e.g. finding receipts and also become knowledgeable about how to get it back if it goes wrong.
This potentially puts the parents in the position of finding receipts for everything they own,

If I was a parent in this situation I'd want the son out looking for odd jobs.
If I couldn't afford to pay him myself for odd jobs I'd want him leafleting the neighbour hood for dog walking, ironing, window washing, baby sitting, car washing, gardening etc.
I know it's a very difficult economic situation but that doesn't mean he can just sit back.
I can assure you the well-off still have odd jobs they want doing, so leaflet the well-off streets.

I live in a fairly average area and every time I go to pay for hand-car washing there is a queue, so there is demand and money out there.
Thre are loads of busy people who'll pay £7.50 to not have to wah their car.
Same goes for ironing.

Fruit_and_Nut_Case

lisyloo wrote: »

same goes for ironing.

+1 ........