Daughter's Debts

NAR

My daughter has just revealed to me that she has debts amounting to approx £6k and she has not got the means to repay these debts. One of these debts relates to her helping her mother out of debt, one for her soon to be ex for an unpaid phone plan and one that she is responsible for.
My daughter is separated and has a lot of personal issues she is trying to deal with, which is why I am prepared to step in and try and help her sort this out.
Now I am trying to help her and am trying to minimise what I loan her/pay for her to clear these debts. I am thinking about contacting the 3 debtors and asking what they will accept to consider the debts to be cleared, is there a "standard" type letter I can use. Can anyone give any other tips/advice please? If the debts aren't cleared I think she will have to declare herself bankrupt, which I would like to avoid.

Mojisola

Talk to one of the free organisations like http://www.stepchange.org/Howwecanhelpyou/Debtadvice.aspx

fatbelly

If she could post a statement of affairs here (link to calculator) that would help us to work out the options.

Bankruptcy will not be one of them at 6k debt.

How much are you offering as a lump sum in this situation?

National_Debtline

Hi Nar,


Your daughter shouldn't have to go bankrupt at all for £6,000 of debt....she may be able to do a Debt Relief Order (DRO) if she meets the criteria (a smaller version of bankruptcy), but if you are able to help her then that is unlikely to be necessary.


You are suggesting doing full and final offers. We have a factsheet and a sample letter to help people do these kinds of offers. It is advisable for you to approach the creditors with an offer rather than ask them what they will settle for (you have no idea what they will say).


Pick an amount of money that you are prepared to use and divide it fairly between the debts. Write to them (don't agree to any of this over the phone), ask the to accept the offer and agree not to chase the remaining balance (and mark the credit file accordingly). If they accept all of the terms in writing then you can send the money to draw a line under things.


https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx#


Laura
@natdebtline

NAR

Many thanks Laura, very useful

fatbelly

All we know so far is that she has 3 debts: "One of these debts relates to her helping her mother out of debt, one for her soon to be ex for an unpaid phone plan and one that she is responsible for."

So it's hard to say whether an full & final strategy is appropriate or advisable.

It may work on the phone one (these usually end up being bought at a discount by a debt buyer like Lowell so negotiation is possible) but if there isn't the capital to pay off all these debts and little surplus income availiable then it would make sense to go straight for a DRO and not complicate things (preferential payments) with F&F.

NAR

Many thanks Fatbelly for your input. I have taken Laura's advice and written to the 3 parties involved and offered a sum as an ex-gratia payment in full and final settlement of the accounts. Hopefully this will be accepted and put an end to the matter.