Credit card debts -moving to care home

ctdctd

Hi,

My father is 85 and has just moved to a care home after a fall that caused brain injury leaving him quite confused and unable to manage his finances.

He has no assets, lives in a rented flat, and owes £10K on 4 credit cards.
His stay in hospital has left him with about £1500 in the bank from his pension.
Care home will be state funded but will not leave him with any cash to pay debts.

I do not have power of attorney.

I propose to write to the 4 card companies explaining the situation and offering them 15% of outstanding debt in full and final settlement. I will explain the alternative is that he stops paying them and they can do what they like!

What do you think - worth trying?

troubleinparadise

Does your father still have capacity to handle his finances, as judged by a doctor? If he does, you could write letters he signs if he understands what is written and agrees with the action.

If he still has capacity to understand, you could still apply for LPA, although it will take some time to come into force allowing you to act on his behalf. If he no longer has capacity, you will need to make an application to the Court of Protection to handle his finances:

http://www.direct.gov.uk/en/Governmentcitizensandrights/Mentalcapacityandthelaw/Makingdecisionsforsomeoneelse/DG_176235

In the meantime, you could try contacting the credit card companies to explain the situation, but they should not discuss his accounts or allow you to take action if you do not have a power of attorney. All you can really do is inform them of his health issues, and wait for their decision. At least then they will know what is going on, which is always better than silence.

ctdctd

I have been through POA with another relative and I'm not prepared to do it this time.
It takes weeks and costs a fortune - not only the POA costs, but also the certified copies of everything and the endless letters. The banks all have different hurdles to jump through and I'm fed up of music on hold.

I've always been of the view that they should not have lent him the money in the first place - these debts started when he was in his 70's and was exploited by a family of druggies. Once they were off the scene, I suggested he bankrupted himself but he would not do it so he's been living like a pauper for many years.

If the banks won't talk to me, then tough - they can do what they like! I was hoping a 15% debt repayment offer might close everything down cleanly, quickly, and with the minimum of paperwork!

Time_to_face_the_music

I am very sorry to hear about your father.

I would write to the creditors and explain the situation but would not make any sort of offer and would only include your father's contact details, i.e. recent address and print his name on the letters. I hope I am wrong but feel that if you give your details that these creditors may start to try and pursue you for the debt.

Good luck and please let us know how you get on

ctdctd

Interesting comment T2FTM,

They are his debts and I would not take over ownership of them so I don't think there is anyway they can chase me?

I might think about giving his care home as his address - except that is subject to change as well. I'll have a ponder!

tallyhoh

I tried to sort out my FIL's debts when he went into a care home. The debts companies didnt want to speak to me so I left it at that. Given that he was left with £20 for personal care after the state had taken his pension etc it was a bit pointless anyway. They cant discuss the matter with you or hold you responsible for any debt unless you have POA.

I wouldnt bother giving them his address either.

gizmo111

I wouldn't even offer them the 15% - that's his only asset and he may need things whilst in the carehome that go beyond his £20 per week he has left. My dad was in a care home and had debts and I just paid them a £1 per month token until he passed away and then the debts died with him as there was nothing left after the funeral had been paid for.

ctdctd

Thanks for the comments.

On that basis, new plan:-
He has one credit card with the bank that currently has his pension surplus.
I will move the funds to clear his overdraft with his second bank - this will mean there is no "surplus" that the first bank can take. He does not have a card with the second bank.

This will leave two near empty bank accounts and all the debts on the credit cards.

I will write to the credit card companies giving the change of address as his care home but correspondence to my address and explain the situation.

I'll request they freeze or clear the debt but make it clear to them that there will be minimal (or zero?) future payments.

I know he would be very upset if his main bank called in his overdraft, hence the reason for clearing it. I don't mind picking up the bill for anything he needs in the care home.

How about that?

tallyhoh

Umm, I'm a bit unsure about this as you do not have POA & so it might be questionable whether you should be moving his money about etc. I really wouldnt give his address or your details or they might start questioning things a bit, if you know what I mean?

I would be inclined to just leave things but thats just my opinion.

ctdctd

Thanks Tallyhoh,

Yes,I see your point.

Father is well enough for me to discuss this with him - he may not remember the next day (:-() and he's not able to move any money himself.

I'm old school enough (bit like him!) that I would not be happy just leaving the card companies in the dark. Also does not seem fair to lumber the next occupants of his flat with a stream of bills and repayment demands.

Still considering the best option.

tallyhoh

I know exactly how you feel about the debts. I really struggled with my conscience about this one. However the behaviour of banks etc in the last few years made things easier for me, dont forget they have insurance against these things plus the fact that as he was aged 85 should they have been loaning him money??

Perhaps sending them a letter giving his forwarding address could prevent letters being sent to his old address but I would avoid giving your details. It might not be legal for you to be using his bank accounts without POA even if its for his benefit as he is unable to.

Maybe someone with banking experience could help here??