grandparents credit cards/debts

omega015

My grandparents have a couple of credit cards with debt totaling about £18,000 now, they cannot afford to pay these off along with the mortgage. My granddad is retired and receiving next to nothing and my grandma is 63 and working but minimum wage.
They barely have enough to live. I have taken on paying their credit cards for over 5 years now and have worked out that I have paid over £30,000 in this time. The amount I have paid has wiped about £1000-£2000 in total which is shockingly low.

Is there anything you can suggest that might help take the burden off me without causing hardship to them? At the moment I am paying more than £500 a month to credit card companies and I want to buy a house and start my own family. I cannot do both.

We are seeking to claim back PPI as when I first took on the debt for them there was PPI of about £150 total a month on the cards. Anything we get back will go towards paying off the debt.

Would they be considered for a interest free balance transfer? would banks stop the interest? It sickens me to know I have paid over £30,000 and they have paid £000's over the years and yet the debt still remains.

Hope someone can advise us of the best course of action.

Regards,

Michael.

Hooloovoo

omega015 wrote: »

My grandparents have a couple of credit cards with debt totaling about £18,000 now, they cannot afford to pay these off along with the mortgage. My granddad is retired and receiving next to nothing and my grandma is 63 and working but minimum wage.
They barely have enough to live.

Oops. That was a bit of a silly thing to do, wasn't it? And that say with age comes wisdom. Oh well.

We are seeking to claim back PPI as when I first took on the debt for them there was PPI of about £150 total a month on the cards. Anything we get back will go towards paying off the debt.

Do you have reason to believe the PPI was miss-sold? I trust you are not going to try to claim back the premium paid for no good reason.

Would they be considered for a interest free balance transfer?

With no income, they would be unlikely to get a 0% card with a high enough limit to do the transfer.

would banks stop the interest?

I doubt it. Why would they? They are only upholding their side of the deal accepted when the cards were taken out.

Certainly while the minimum payments are being met they will do nothing about it. I would think that the only option would be to simple stop paying and force their hand, accepting the resulting trashed credit record.

It sickens me to know I have paid over £30,000 and they have paid £000's over the years and yet the debt still remains.

Well, that's how borrowing money works.

They need to talk to the bank and tell them they can't afford the repayments any more and get some discussion going. There's not really any other advice to be offered, unfortunately.

InsideInsurance

If they cannot afford what they have why would any lender consider offering them a new line of credit?

What are the interest rates on the cards? As to have paid £30,000 towards balances, presumably with them not spending, and only removed £2,000 from the balance puts the interest rate at over 100% APR

Speak to those on the debt free wannabees board or to the CCCS charity

omega015

I guess times are hard for young and old. I assume these cards have been like this for a number of years, and they have probably helped the rest of the family without thinking of themselves.

Claiming the PPI back is on the assumption it was miss-sold by they wasn't even aware of this, hence why I am paying this debt off. Would they of even be able to claim due to their age? owning a house etc.. I think the biggest point of them not knowing this was even present is a big indication of being miss-sold. Please don't shoot me down on this as I wasn't present at the point of taking out the credit cards and I am not a banker.


I am hoping, in fact praying that they will get enough back to pay off at least 1 card (if my sums are correct), then the rest of the debt might be enough for a bank to consider a balance transfer. I could have their debt paid off in 3 years if my dream went to plan.

YorkshireBoy

InsideInsurance wrote: »

What are the interest rates on the cards? As to have paid £30,000 towards balances, presumably with them not spending, and only removed £2,000 from the balance puts the interest rate at over 100% APR

Again, assuming no further spend*...

£500 on £18K is around 2.8%. If the debt has reduced (even by a little) then it follows that the monthly interest rate charged is less than this amount.

2.8% monthly equates to an APR of around 39%, so the rate is less than this.


* I don't think that's the case here, but the OP will possibly confirm?

omega015

InsideInsurance wrote: »

If they cannot afford what they have why would any lender consider offering them a new line of credit?

What are the interest rates on the cards? As to have paid £30,000 towards balances, presumably with them not spending, and only removed £2,000 from the balance puts the interest rate at over 100% APR

Speak to those on the debt free wannabees board or to the CCCS charity

Would the banks not see owning (well almost) a house as security? or does it not work like this? and with the income they receive. could they declare extra income from myself as evidence to be able to pay back the repayments?


Correct on the no spending. I have asked them to send me a recent statement up so I can work things out. but in terms of interest I don't know the figures just yet. All I have been doing is paying the minimum plus a tiny bit more to ensure these payments are covered.

Hooloovoo

omega015 wrote: »

I think the biggest point of them not knowing this was even present is a big indication of being miss-sold.

From what I understand, PPI is not a "hidden" charge. It will have been there clearly every month on the statement.

Did they never question what it was? Why not?

While I accept that PPI can be initially miss-sold in that it is added on without the card holder knowing they have accepted it, you can't avoid the fact that they have been told they've got it every month and have had chance to cancel it every month. How many chances do they want?

The miss-selling of PPI is more to do with it being sold to people who would never have been eligible for the cover - ie people on fixed term contracts etc.

omega015 wrote: »

Would the banks not see owning (well almost) a house as security? or does it not work like this?

Not for a credit card, no.

The only way that would work is if they re-mortgaged and used the money to pay off the cards. Being retired, and close to retired, there aren't many banks that would consider a new mortgage application unless they could so they had sufficient retirement income to cover it.

InsideInsurance

YorkshireBoy wrote: »

2.8% monthly equates to an APR of around 39%, so the rate is less than this.

Can't count my fingers and thumbs at times

Back to the OP, credit cards are generally (or at least those with good interest rates) are unsecure and so cannot be secured against their property. Whilst being a home owner does make you a better risk than a tenant it isnt a case of it being night and day between the two.

That all said, the CCCS are a charity and can give them financial advice on how best to deal with the issue seeing as their debts are out of control given they are reliant on family members support. There may be an element of having to make it get worse before it can get better as lenders dont tend to entertain discussions on freeze interest/ accepting lower settlements until the accounts are in arrears etc (as ever there are exceptions)

omega015

Thank you all for your time. I will sit down with them and discuss the next best step for them.

ILW

Probably best to sell up and downsize.

pheonixrising21

Hooloovoo wrote: »

From what I understand, PPI is not a "hidden" charge. It will have been there clearly every month on the statement.

Did they never question what it was? Why not?

While I accept that PPI can be initially miss-sold in that it is added on without the card holder knowing they have accepted it, you can't avoid the fact that they have been told they've got it every month and have had chance to cancel it every month. How many chances do they want?

The miss-selling of PPI is more to do with it being sold to people who would never have been eligible for the cover - ie people on fixed term contracts etc.

This is irrelevant. It doesn't matter how long it was on there, if it was mis-sold, it was mis-sold and all payments should be returned along with statutory interest of 8%. If they weren't told it was there, then it was mis-sold. By your logic, all claims will be limited to a maximum of one month's payment.

I've had PPI refunded on a loan taken out where PPI was a pre-ticked check box on an online form and one where paymenst were taken even though PPI wasn't even on the CCA. Both were refunded immediately and without arguement.

I should add that the loans were off several years in length and all PPI payments were refunded when I complained recently