Advice needed for me and my family

wacklepudding

Hello!

About 6 months ago my dad revealed to my mum that he is in quite considerable debt to credit card companies. I'm not sure of the time frame but at the point of revealing he had amassed a debt of around £50,000 across 6 credit cards. After revealing this he went to a debt charity who spoke to the credit card companies for him and managed to negotiate the repayments which my dad would make every month and stop the cards from accumulating anymore interest.

6 months later and despite him making the repayments every month, my mother and I do not have enough faith in him to be confident that this will not happen again. He has a history of previous financial mismanagement, one particular time leading him to lose his business and his parents house. My mum took the news quite badly when he revealed this to her half a year ago and I feel like any further financial issues would super bad for her.

My question is, is there anything my mum or I can do to prevent my dad from amassing a huge debt again? Additionally, is there anything my mum can do in the event anything does happen again. If it's relevant, they have a mortgage together on the family home.

Thanks

January2015

wacklepudding wrote: »

Hello!

About 6 months ago my dad revealed to my mum that he is in quite considerable debt to credit card companies. I'm not sure of the time frame but at the point of revealing he had amassed a debt of around £50,000 across 6 credit cards. After revealing this he went to a debt charity who spoke to the credit card companies for him and managed to negotiate the repayments which my dad would make every month and stop the cards from accumulating anymore interest.

6 months later and despite him making the repayments every month, my mother and I do not have enough faith in him to be confident that this will not happen again. He has a history of previous financial mismanagement, one particular time leading him to lose his business and his parents house. My mum took the news quite badly when he revealed this to her half a year ago and I feel like any further financial issues would super bad for her.

My question is, is there anything my mum or I can do to prevent my dad from amassing a huge debt again? Additionally, is there anything my mum can do in the event anything does happen again. If it's relevant, they have a mortgage together on the family home.

Thanks

If he is in some form of debt management plan (DMP) then he will no longer be able to obtain credit at any high level or reasonable rate of interest. Payday type lenders may lend to him, but it would be a lot of money (although the repayments would likely add up to a lot of money if not repaid very quickly).

Once on a DMP his credit file will be marked with late payments and/or defaults. This will deter other financial institutions from lending to him.

Our DMP forced us to manage within our means and stop living on credit.

Fireflyaway

It sounds like a trust issue as much as a financial one . What did he spend the money on? Is it just bad budgeting or living beyond means or is there a gambling / drink issue or something else?
I think the cause needs to be identified and then your mum and him need to work out a budget and stick to it. As a grown man he can't really be stopped but his bad decisions can impact your mum because they are financially linked. Hopefully they don't need to apply for a mortgage or anything. Does your mum have her owen money and does she have access to any joint accounts and utility bills to check they are being paid / there isn't a huge overdraft? I think that's all that can be done. Maybe someone can advise legally re the house. I think your mum would be required to sign any credit against the house but not sure beyond that. They need to talk and come up with a plan. Apart from being there, don't get too involved.

enthusiasticsaver

If he is on a debt management plan he should not be able to get more credit but I know some do (usually from dodgy lenders). If I were your mum I would get advice about the house and whether it would be a good idea to remove his name from the deeds. It could certainly impact on your mum and unfortunately because they are financially linked through the mortgage there is little to be done about that. Can you sit down with him and work out a budget - maybe remove him from accounts with overdraft facilities? How open would he be to having cards removed from him and just give him cash spending money every week? I am not generally in favour of grown men being treated like children but as this seems to be a long term ongoing problem I am not sure what else to advise.

sourcrates

wacklepudding wrote: »

My question is, is there anything my mum or I can do to prevent my dad from amassing a huge debt again? Additionally, is there anything my mum can do in the event anything does happen again. If it's relevant, they have a mortgage together on the family home.

Thanks

Hi,

Legally no, not a lot, to be honest, assuming he is a grown man of sound mind and body, he is free to do whatever he pleases.

However, as previously stated, being on a debt management plan will of had an effect on his credit worthiness, so it shouldn't be possible for him to borrow to any great extent for a few years.

Your mum has every right to be worried about losing the house though, your dad, if desperate enough, could forge her signature on any secured loan papers, it does happen, he could obtain a loan without her knowledge, using the house as collateral.

It does seem to be an issue more of trust than anything, maybe sitting down and discussing the potential pitfalls of further borrowing may help, but i understand that may be tricky.

Mojisola

sourcrates wrote: »

Your mum has every right to be worried about losing the house though, your dad, if desperate enough, could forge her signature on any secured loan papers, it does happen, he could obtain a loan without her knowledge, using the house as collateral.

You can register to get notified if anyone tries to use the property as collateral -
https://www.gov.uk/protect-land-property-from-fraud

fatbelly

The other point worth making is that if the mortgage is joint it will probably be marked as such on his and her credit files, meaning that they are financially linked and the effects on his ability to get credit will also affect her.

So fraudulent applications in her name may not be an advantage. And it's in everyone's interest to understand why it happened and work to get debt free.