Pensioner Debt help

sarah759365

hi all,

I am looking for some advice to help my 65 year old mum.

My mum has admitted to me over the weekend that she has got herself into a significant amount of debt and doesn't know how to find a way out. I am desperate to find a way to help her but unfortunately am not in a position to pay the whole lot off for her.

She's so desperate that she's said she's had suicidal thoughts as she can't see a way to resolve it but I'm sure there must be something that can be done.

She is still working (in order to meet minimum repayments) 3 days a week but only earns £9000 per year and after she has paid rent and bills is not clearing enough to keep up with her repayments.

I'm furious to see how much credit she has been given at her age and income level too! it's completely irresponsible lending.

Her debts are as follows

- Kaleidoscope catalogue £800 (I just paid this off for her yesterday to get it out of the way)
- M&S Bank Credit Card £2500
- HSBC Credit Card £3000
- Halifax Credit Card £2000
- Overdraft £1100 (£100 over her limit)

Unfortunately her credit score (lower end of fair) won't allow her to shift her debts to a 0% or lower APR option.

What is the best way to progress? If she speaks to the lenders are they likely to help with repayment plans etc?

Any advice would be greatly appreciated.

sourcrates

Speak to National debtline, link below :

https://www.nationaldebtline.org/

they will be able to advise the best course of action, it may be you could write to the lenders on her behalf and ask them to write off the debts as her financial situation is unlikely to improve.

At any rate she should stop paying her unsecured debts straight away, and concentrate on her essential bills first, rent, council tax, utilities etc, everything else can wait.

pmlindyloo

sarah759365 wrote: »

hi all,

I am looking for some advice to help my 65 year old mum.

My mum has admitted to me over the weekend that she has got herself into a significant amount of debt and doesn't know how to find a way out. I am desperate to find a way to help her but unfortunately am not in a position to pay the whole lot off for her.

She's so desperate that she's said she's had suicidal thoughts as she can't see a way to resolve it but I'm sure there must be something that can be done.

She is still working (in order to meet minimum repayments) 3 days a week but only earns £9000 per year and after she has paid rent and bills is not clearing enough to keep up with her repayments.

I'm furious to see how much credit she has been given at her age and income level too! it's completely irresponsible lending.

Her debts are as follows


- Kaleidoscope catalogue £800 (I just paid this off for her yesterday to get it out of the way)
- M&S Bank Credit Card £2500
- HSBC Credit Card £3000
- Halifax Credit Card £2000
- Overdraft £1100 (£100 over her limit)

Unfortunately her credit score (lower end of fair) won't allow her to shift her debts to a 0% or lower APR option.

What is the best way to progress? If she speaks to the lenders are they likely to help with repayment plans etc?

Any advice would be greatly appreciated.

Please check that your mum is receiving all the benefits that she is entitled to by using the calculator on here https://www.entitledto.co.uk

If she is working 16 hrs a week she should be claiming working tax credits.

She may also be eligible for Housing Benefit and Council Tax Support.

If she is not working 16 hrs a week she may be better off claiming Pension Credit instead of working as PC gives her full HB and CT support up to her personal circumstances.

National_Debtline

Hi Sarah 759365,

sourcrates wrote: »

concentrate on her essential bills first, rent, council tax, utilities etc, everything else can wait.

This is correct and your mother should make sure that she budgets for all of her living expenses first. If this means that there is not enough money to pay the minimum payments to the debts any longer then she will have several options available. It is also a good idea to make sure that she has also checked that she is receiving all of her income as pmlindyloo has suggested before cancelling her payments.

If the minimum payments are still unaffordable (after checking her income) she can consider negotiating what she can afford (either herself or through a debt management company) or potentially an insolvency option. The suitability of insolvency options largely depend on her budget and assets.

If she decides to negotiate then it is a good idea to follow the tips on our website and only offer what she can afford, treat all the creditors fairly, deal with everyone in writing and understand that their enforcement action is reasonably limited. Have a look at our website at - https://www.nationaldebtline.org/EW/steps/Pages/default.aspx. If she wants to consider an insolvency option then there is normally some criteria to meet in order to qualify. Depending on your mother’s assets and circumstances she may be able to qualify for a Debt Relief Order, you can read more about this at - https://www.nationaldebtline.org/EW/factsheets/Pages/37 EW Debt relief orders (DROs)/Default.aspx

Unfortunately, if it quite difficult to prove irresponsible lending and whilst you can consider a formal complaint about this (to the lender and then escalate to the FOS if necessary), there is a reasonably common argument back that the credit facilities didn’t have to be used just because they were offered. I hope this helps you understand the possible options your mother has,

Laura
@natdebtline

[Deleted User]

OP was it bad lending?or poor borrowing? theres a big difference I'm afraid

viv0147

In her circumstances I think she should look at a DRO providing her debts are under £15000 she could end up having everything wiped off her credit line will be no more but who cares she will no longer have any debt and no sleepless nights.

sarah759365

Thanks for all your advice everyone.

After much research I've decided that best course of action is to take a loan out (in my name) to pay off all the debt. I got a great rate of 4.1% from Tesco Bank and my mum will pay me back £50 a month.

This will save my mum so much stress and will mean she can finally retire and enjoy time with her grandchildren rather than making herself ill worrying.

Woodbine - of course it was poor borrowing, however I do think that she was offered a ridiculous amount of credit (150% of her annual salary), especially considering she is at retirement age. She opened the cards to pay bills etc and it spiralled out of control as it so often does. I think age and salary should have ruled her out of being offered so much.

Pixie5740

sarah759365 wrote: »

After much research I've decided that best course of action is to take a loan out (in my name) to pay off all the debt. I got a great rate of 4.1% from Tesco Bank and my mum will pay me back £50 a month.

What research have you done? Has your mum contacted National Debtline or one of the other debt charities for advice? You consolidating her debts into another loan is most likely not the best course of action for your mum.

sourcrates

Pixie5740 wrote: »

What research have you done? Has your mum contacted National Debtline or one of the other debt charities for advice? You consolidating her debts into another loan is most likely not the best course of action for your mum.

Normally i would agree, but i think its more important to have the worry taken away so her mum dosent make herself ill over this.

I would presume this would be a more important factor to the OP than the cost of the loan.

andyfromotley

Hi Sarah,

i completely understand you desire to just make all this go away for your mum and she is lucky to have such a daughter.

However....... if this debt was built up 'just paying bills' then the underlying problem hasn't been resolved. Your mum did not have enough to live on and retirement and a reduction in income is not going to help this situation.

You need to ensure that between you you find a way for your mum to live within her income in order to prevent it happening again.

Also you need to CLOSE the cc accounts, not just cut em up as new ones will arrive at some point, and hope that she doesn't again secretly build up a debt. HTH andy

National_Debtline

Hello again sarah759365,

sarah759365 wrote: »

After much research I've decided that best course of action is to take a loan out (in my name) to pay off all the debt. I got a great rate of 4.1% from Tesco Bank and my mum will pay me back £50 a month.

This would suggest that £50 a month is all that your mom is able to afford to repay to you and not the total monthly cost of the loan (based on your original post showing your mother’s debts are approximately £8600). If this is the case and the loan will cost you money each month as well, then I think a Debt Relief Order (DRO) may be less stressful than refinancing.

A DRO is a form of insolvency for people who owe less than £15,000 of debt, have less than £50 per month available for the debts and have less than £300 worth of assets, with the exception of a car that can be worth up to £1000. Your mother would seem to meet these rules based on previous posts. A DRO will cost her £90 to do; this would save her repaying you for years and save you the stress of taking out a loan. I appreciate that this is a form of insolvency and, amongst other things, it would be damaging to her credit file, but is this something that she is trying to protect? We do have a factsheet about DRO’s that I think you should have a read of before doing anything else - https://www.nationaldebtline.org/EW/factsheets/Pages/37 EW Debt relief orders (DROs)/Default.aspx

If you have already taken out the loan, don’t worry, you may still be able to change your mind as most agreements will have a 14day ‘cooling off’ period that you can use. I hope this helps to give you another perspective,

Laura
@natdebtline