My dad is in debt too and I need advice.

worriedwilf

Hey,


I found out yesterday that my dad is in some debt. It has come as a real shock. He is 68 and my mother 65.


I was helping him sort through some paperwork when I came across a letter from a collections company. He knew I had seen it so I had to ask him If everything was ok. To cut a long story short, he owes about 8k on credit cards and he is also on a repayment plan for his gas and elec for which he owes £1800. The gas and elec is coming down so I am not worried about that.


One of the credit cards has a balance of 5900 and he has set up a repayment plan with the lender to pay £50 per month. Will the interest still being added to this? If so, surely this is just going to spiral????


the other credit card has a balance of £2400 but this seems to be under control.


My parents have a monthly take home of £2000 made up from state and private pensions.


I know that their debts aren't huge but it does worry me that they are dealing with this at this stage of their lives. They are amazing parents and if I was not in a difficult financial position myself I would happily take on the repayments for them. They have always support my sister and I and not it appears that this has been to their own detriment.


They have 1 months to pay on their mortgage so this will save them £300 per month which is going to help.


So, I need to know...


Will there be interest on the CC repayment plan set up by the bank or will it have been frozen?


How common is this sort of debt in pensioners? He feels really embarrassed by it and feels like he is the only one of his friends who are not financially secure.


I am more worried by this than by my own debts!!

Brightspark87

Right. First things first make sure you understand (SOA) and where the money that has cause the debt has been spent. Then you can tackle how to pay them down. Its amazing how little things add up. £10 a week is £520 a year which if you pay interest on a credit card can really start to add up.

Secondly, you need to work out what interest rates they are paying and what to pay off first. The extra £300 a month will certainly help tackle this.

Finally, rest assured I am sure there are many people who retire in this situation. Its tough to go from earnings to less income (Im guessing this is the case) and if you don't reduce your spending its a simple case of borrowing to cover it.

Please dont panic, I am sure they are grateful for your help and its an a situation you can all control.

take care x

Monkeyballs

Hi Wilf,

On a balance of £5900 at £50 pcm then that's less than 1% so hopefully interest should be either massively reduced or frozen...

Does it say anything on the statement, or maybe they have a letter confirming the terms of the agreement?

Are your folks on the same page re. their debts or is your Dad hiding anything from your Mum (and vice versa)? If not then there may be an element of living beyond their means to hide their circumstances which needs to be knocked on the head

The good news is that they have a reasonably low debt for their income especially if their mortgage is coming to and end but they need to not scrimp but be more conservative with their spending until they're paid up...

MB

longtermplanner

worriedwilf wrote: »

Will there be interest on the CC repayment plan set up by the bank or will it have been frozen?


How common is this sort of debt in pensioners? He feels really embarrassed by it and feels like he is the only one of his friends who are not financially secure.

Did he ask for interest to be frozen? If he didn't, he shoudl do so!

However it sounds as though he will be fine after the last mortgage payment is made. If he allows them an extra £100 a month spending money and ups the payment to this car to £250, it's going to start dropping reasonably fast even if interest isn't fronzen.

Debt in pensioners is really common. Many of them haven't finished paying off the mortgage either!

worriedwilf

Thanks for the replies guys


My mom knows that they have some debt but he doesn't discuss amounts with her and she is happy to leave it him.


Their debts are mainly due to lack or organisation and spending slightly more than they could afford for several years. They haven't actually used a CC for years but they are still dealing with the mess from their past spends.


I am 99% sure that the TSB card has the interest frozen.


I would really like them to downsize their home and pay it off with some of the capital, in fact I would be happy for them to sell up and spend the money on enjoying their retirement. My sister and I have no interest in any inheritance and I would much prefer them to use THEIR money to have a comfortable life now with no debts and lots of fun!


This feels like role reversal!!

Monkeyballs

LOL

Ok, think of it this way - their mortgage is just about paid up and if they're bringing in @ £2k pcm then they could in theory scrimp (or at least tighten their belt) for 6-8 months and have the lot paid off!

It's good that you're looking to help them but don't go over thinking it

MB

-taff

If something happens to your father and your mother is left to discover the debt, she'll be horrified, so I'd push ehr to get involved.

Check he's not paying PPI or anything on these cards because if he's retired, it's now useless to him.