Sister's financial situation - what to do?

zzzLazyDaisy

1. Please accept that YOU cannot do anything about this without the cooperation of BOTH your mum and your sister. Why? Because when you are not there, your mum will continue to enable your sister's abdication of responsibility and your sister will continue to manipulate and take advantage of that. You have to face this fact, because it will be the stumbling block to any solution you come up with, and will drive you insane with frustration.

2. As someone else has said, open all her letters, find as much evidence as you can of her debts, and have a family meeting, and get her to admit the debt, tell you what other debts she has (there WILL be more) and agree to a plan of action. Be prepared for her to lie about the dents you have discovered and about the ones that you haven't, and be prepared for her to agree to sulk, have a tantrum, turn this into you being in the wrong, and also to agree to whatever you suggest, just to get you off her back, with no intention whatsoever of actually doing anything about it.

3. You don't live there - she does. Your mum is probably more afraid of being left on her own to cope alone, and being lonely, than whatever problems your sister might bring on her. Be prepared for your sister to play on that, and attempt to drive a wedge between you and your mum.

4. Before you have any confrontation with your sister, get your Mum on board. If you don't, anything you try to do will be doomed from the outset - see above points.

5. To be honest, it is going to be down to your mum to decide what she needs out of this. Probably the best thing would be for your sister to get her own place and stand on her own two feet, maybe with a bit of help from you or her mum in the early stages. She would either sink or swim. But that requires your mum's cooperation.

I feel for you, I really do - but your sister and/or your mum have to be on board with any solutions. You can't do it on your own.

Mojisola

marmitepotato wrote: »

I think a family meeting is needed here. Time for your sister to lay her cards on the table. Time for your Mum to take charge of her own finances.

Time for you to 'hopefully' help them both, but a bail out for you sister is a no no. Maybe the CAB can work out a debt repayment plan for her.

Like ddebski_us, I couldn't just walk away from this. It's a family situation which will come back at some point where she(?) will have to be involved. Why wait until the sister has bled her mother dry and both of them are in financial trouble?

ddebski_us - you will have attempt to empower your mother and to get your sister to face up to her situation. Neither will be easy and it won't happen after one meeting, especially when you're at a distance.

katsclaws

I think sorting out the HMRC tax returns is important. Do you know why she has to file tax returns if you say she has had mostly minimum wage jobs. ? Presumably she was taxed under the PAYE scheme. I would get this sorted out first before tackling anything else.

Lara44

Definitely DON'T bail your sister out as others have said.

It's a good idea to have a family meeting. However, take your cue from the Debt-Free Wannabee forums - there is no judgement there. Any intervention must come from a big-hearted place of kindness. We have ALL made mistakes of one kind or another, and having some empathy for your sister will greatly enhance the prospects of success. At the end of the day your sister is her own person and not your responsibility whatever you may think, so respect her boundaries and don't treat her as a child (even if you think she is acting like one).

There may be reasons that your sister overspends that are sensitive and personal - feeling bad about herself and her life for example. Ideally change comes by addressing these. There may be other ways you can help your sister feel positive about herself.

Definitely introduce her to the DFW forums here - they are an incredible source of support. She may or may not appreciate help with making budgets, ebaying, visiting the CAB as things progress. It might be good for your Mum to also think about budgeting and financial planning too.

ddebski_us

katsclaws wrote: »

I think sorting out the HMRC tax returns is important. Do you know why she has to file tax returns if you say she has had mostly minimum wage jobs. ? Presumably she was taxed under the PAYE scheme. I would get this sorted out first before tackling anything else.

She was self-employed for years - only paid minimum wage - she's always told me she's submitted her returns but I know she never has.

Problem is, she was paid cash in hand I believe - no way she can file an accurate return now.

cazziebo

The debts aren't the real issue here - they are only a symptom and outcome of the real problem. If you pay them off on her behalf it's like scratching an itch - it will momentarily make things feel better, only for it to pop up again.

The problem is her finances are out of control. Until she has that lightbulb moment, things will not change. DFW board has loads of great people who have been there, often in much worse situations than your sister, and are working their way through it. It's a lovely place.

(without more info, it's difficult to know what the HMRC problem is, and how bad it may be. If your sister was paid cash in hand, never kept paperwork, never declared self employed earnings then it may be she's under the radar. However, if she is known to HMRC and just isn't getting in touch then there could be a lot of fines out there. However, I don't think HMRC would let this go on for more than a year or so)

belfastgirl23

Honestly I think you need to let your sister sink at this stage. If you stage an intervention she will deny everything (you know this already, you've said so). And the most likely outcome is that you will get the debt paid off and she'll run it all up again within a year or two, or you'll end up trying to dictate what she does which will cause all kinds of family problems.

Are you sure your mum worrying about this isn't just grief at the loss of your dad getting fixated on something else? It's a very easy thing to do, there are lots of negative emotions floating around and finding a 'thing' that can be fixed can absorb some of them for a while. But they don't go away. In fact do you think this might be some of your own issue as well? I'm not saying it's not worrying but this was going on before your dad died as well.

Honestly I'd say you and your mum need to talk through strategies for what happens when/if your sister crashes but right now I think you need to accept that some of these emotions are just simple sadness and grief at losing your dad and this can't be fixed, it can just be lived through.

McKneff

ddebski_us wrote: »

She was self-employed for years - only paid minimum wage - she's always told me she's submitted her returns but I know she never has.

Problem is, she was paid cash in hand I believe - no way she can file an accurate return now.

Self employed people are not paid a minimum wage, they earn profit from their business.

only employees get paid, whether minimum wage or not.

She may well have submitted her returns. You cannot KNOW she has not.

ddebski_us

McKneff wrote: »

Self employed people are not paid a minimum wage, they earn profit from their business.

only employees get paid, whether minimum wage or not.

She may well have submitted her returns. You cannot KNOW she has not.

I understand how self assessment works; I only mentioned minimum wage to indicate how little she earns in comparison to her debts.

In fact, there would be some debate as to whether she was self-employed. She only ever worked at one place (as a farm hand) and he dictated her holidays etc. She was paid cash in hand (no tax deducted at source). I know this would not be classed as self employed by HMR&C but she has not paid any tax (or NI and so there are pension issues for the future too!)

I know she hasn't submitted her returns. I saw her statement dated Dec 2012 at the weekend - littered with penalties for non-filing from Jan 2006. It amounts to £3.4k and is growing.

getmore4less

ddebski_us wrote: »

She was self-employed for years - only paid minimum wage - she's always told me she's submitted her returns but I know she never has.

Problem is, she was paid cash in hand I believe - no way she can file an accurate return now.

you need stratagy that actualy solves the problem not eat at the edges which paying of a bit of debt does.