Advice Needed, OAP's Blameless Loan Default

1connect

Hi I need some advice on a tricky situation:

Mom & Dad take out an unsecured 8.5k RBS (Tesco) loan out.

Loan runs to Jan 2010 at £167 a month = 28 months left = £ 4676 left to pay (based purely on remaining repayments)

They previously had a similar 5 year loan with Tesco/RBS which they completed 100% on time with no defaults.

Mom is 76, dad would have been 76 this year, he sadly died in July 2007.

Mom has senile dementia and is (wheelchair bound) and is a nursing home receiving £19 a week which she is allowed to keep after the local authority deduct all of her care fees.
The remaining £19 is for stuff like clothes shoes toiletries & other absolute essentials. Obviously there is no room to repay £167 a month – and the figure I use of £1 a week is a real one, as she genuinely can’t afford to part with more than this.

I am now power of attorney for mom, I have written to RBS to explain the situation

She has zero capital, her only assets are the clothes in her wardrobe and a bit of jewellery probably worth a £150 at scrap value.

They lived in a rented house so no other capital or possessions. I cleared the house and sold bits to pay for dads funeral... so absolutely nothing left there. (I have all the detailed breakdown of disposal receipts etc)

I have written to RBS explaining the situation and they have written back to me saying "we now require your proposal for repayment" this is from the collections dept - obviously they will blindly try and collect money quite happily with their brains disengaged from the ACTUAL SITUATION- that after all is their function.

There are a few issues here
1) they were in their seventies when they took the loan, surely these companies can make some kind of dispensation for their age and current circumstances - they lent the money knowing there was an increased age related risk
2) I would have hoped that a company lending to pensioners would take out a commercial insurance to cover unrecoverable debt say in the event of default by death and disability as has happened here...

What I really want to do is to get RBS to write off the debt now.
I need to know who to write to that has the authority to authorise this.
She is already 3 months behind.

Now do I say ...

1) we will pay you a £1 a week - here is a copy of her income and expenditure - presumably this will lead to them attempting a court recovery at some future time OR do we
2) Say stuff you , you should bear some responsibility in lending to the elderly when through no fault of their own they become unable to pay, so get stuffed we aren’t paying a penny and the debt is unrecoverable anyway, this presumably will lead to mom getting a CCJ and also possibly a visit from a bailiff to attempt to recover the amount by recovering her clothes and measly bit of jewellery - which are her only earthly possessions. Whilst trying to get her to commit to a future payment plan when she is in a wheelchair and doesn't know who she is most of the time. (I have power of attorney on mom)

So what is the best option? who should we speak to and how should we do this - clearly the monkeys in auto recovery mode at RBS are NOT taking her circumstances fully into consideration, or the fact that over the two loans they have had they probably have already the full loan amounts less any interest, but will now fall short on repaying this interest portion (if you look at it from that point of view)

Anyway all QUALITY advise is welcome particularly if you have had a similar situation.

thanks
1connect

Actually there is a wider issue here in itself possibly for the MSE Man himself regarding responsible lending to the elderly and what happens in the event of a blameless default, Martin, any comments or mutterings on this? :money:Maybe this is an item which should feature as the next Moral Dilemma question, as there are actually 2 dilemmas 1) should we pay and 2) should *Tesco *RBS write off ? (*Tesco uses *RBS for their Tesco Branded Loans, for anyone who didn't know)

peb

I am going to play devils advocate. Your parents borrowed the money and no doubt intended to repay. They, for varisou circumstances, are unable to repay. They have still received the benefit of the loan. So far as the Lender is concerned your mother is still alive and is no doubt jointly and serverally responsible to repay the monies - she cannot at the moment as she does not have the funds. If they are to accept this and close the loan then they will not get anything from her; if they accept the £1 your mother can afford then should your mother come into money at a later date then theycan pursue the same. The alternative is that they do not lend money to anyone who is not working - but your parents paid back the initial loan and I am sure intended to repay this. They are a company with shareholders to report to; not a charity. I would anticipate that they will accept your mothers position - maybe after a little time for the information you have forwarded to arrive on the appropriate persons desk. if then they are still chasing more than the one pound your mother can afford that is the point where their behaviour becomes unacceptable.

misspoppy

Hi

i see your point but I think you should take some professional help on this one. They can't have what your mother doesn't have. Whilst the common sense reponse is to write it off its unlikely, its more likely that it will get sold to a debt collector and then sold again and again.

I think you should contact CAB, National debt helpline or CCCS

1connect

Yes it is a loan in joint names so they are jointly and severably liable.

I should have said in my original post that by absoluteley no strech of the imagination will she be coming into any future monies, no gambling wins, no inheritanvce nada nowt never, amen, kaput, full stop. so this makes recovery impossible, as I said before this is a wholy unrecoverable debt now.

Jacks_xxx

:wave: Hiya honeybun,

First of all a big hug for you as you sound really angry about all this.

Second of all, get some clout behind you in the form of the CAB, CCCS or Payplan and take advice. Perhaps they can help you set up some sort of nominal DMP?

This kind of thing is very very stressful so share the load honey. I bet all of those agencies I mentioned have had experience of dealing with this situation before and will "know the drill" so to speak.

(and they're free!)

Let us know how things work out.

Love Jacks xxx

Floss

I guess you have sent a copy of your dad's death certificate to RBS, have you also sent a letter from your mum's GP to explain her medical circumstances? Maybe sending those and an offer of the £1 a month on behalf of your mother to the Head of Custoemr Service at RBS's Head Office may help? And send them recorded, so they have to be signed for. You may be lucky and find a human!

Good luck :grouphug:

Chubacca

I pressed the wrong one in the poll - because the first word was no, I thought it was not to pursue her - so sorry

Kevicho

I couldnt agree with Peb anymore.

I wouldnt worry too much, i would make sure that you do not have the loan signed into your name or pay for it with an account of your own.

Make sure the offer you send in is recorded delivery, if they persue this to courts, you will have shown that your mother has done everything in her power to repay it, and they wont have a leg to stand on.

I feel for you in this situation, and for your mum, but unfortunately companies are amoral, they loan out money with the expectation it is repaid (and then some) so they are only following procedure.

It may be you point out that with your mothers limited time left, the small repayments that they will receive that they may as well default the debt, as it will cost them less in the future due to processing fee's and there staffs time.

Broken_hearted

I think the bank should back off there is little point chasing it anymore.

Richard_S

Hi 1Connect,

The solution to this one is perfectly straightforward; write to them and offer £1 per month, recorded delivery of course. You'll never get to talk to anybody who can make a decision, all you can do is wait and see which category it falls into with their collections department.

What you can be certain of though, is if they sue for a CCJ and you've already offered a nominal £1, and have a copy of your Mother's Income & Expenditure Budget, there's no judge in this country that'll let bailiffs anywhere near your Mother; they'll be stuck with accepting the £1.

What brainless moron thought it would be a good idea to lend money to people of that age? The banks deserve everything they get; they can't see sense for greed.

Richard