Credit Card and Loan of 85yr old in care home

paintycait

My Mother in Law has just recently had to go into full time care, so her own home is being sold and investments cashed in to cover the care fees. She is disabled and needs a lot of help but chances are she could go on for a good few years.
We've submitted her list of assets to the council as there is a likelyhood that the sale of her house and assets won't cover all the cost of the fees in her lifetime.
She has a credit card bill and a loan, however as things stand she has no income now to service these items
Bank loan owed as at 6th Dec £5871.17
Credit card as at 6th Dec £2383.61

Can we stop paying these and write to the bank and ask to get them written off? The council will I assume not allow these to come out of the house sale and they will therefore become deductible from the £16,000 she is allowed to have in savings.
Currently the council get her pension and benefits and the shortfall due after that is covered by what is in her bank account. If these are paid off it leaves her very little money for the rest of her life.

Sorry I might be being a bit dim here. Her social worker has said they are non-essential payments and we should stop paying them. I'm not sure how we handle this. It's distressing my BIL no end and so looking for help. Also wondering if there is a letter template somewhere for this type of thing
My husband and his brothers have full POA

Thanks in advance.
Cait

KatrinaWaves

It’s unlikely they will be written off when she has enough capital in her home to pay them.

calcotti

I think that when the sale comes through she should be able to pay off the debts. These are liabilities she has even if 'non-priority'. When you submitted the list of assets to the council I think you should have included liabilities as well. If the council are unaware I recommend that you write to them informing them of these liabilities (with supporting documentary evidence).

parkrunner

I can only imagine that the loan for a person of that age would be a secured loan on the house, so would be paid back automatically on the sale.

xylophone

I don't understand why you should expect them to be written off.

If the money was owed to a friend, relative or neighbour would you expect it to be written off?

Why should it be different for other creditors?

When the house is sold she will have the wherewithal to pay off the debts.

Surely the Attorney should advise the Council of the liabilities and arrange to meet them from the capital realised from sale?

TELLIT01

From a friends experience of a person going into a care home, the council will do everything in their power to stop anybody, or anything, gaining access to the funds. That will include items such as those referred to in the OP. In my friend's situation, it required court intervention even to get back into the mother's former home to retrieve their own property. The council had all the locks on the property changed but still claimed to have no responsibility when the house was broken into.

paintycait

calcotti wrote: »

When you submitted the list of assets to the council I think you should have included liabilities as well. If the council are unaware I recommend that you write to them informing them of these liabilities (with supporting documentary evidence).

We did but we have been informed that these are not priority payments and that we should apply to get them written off.

xylophone wrote: »

I don't understand why you should expect them to be written off.

If the money was owed to a friend, relative or neighbour would you expect it to be written off?

Why should it be different for other creditors?

When the house is sold she will have the wherewithal to pay off the debts.

Surely the Attorney should advise the Council of the liabilities and arrange to meet them from the capital realised from sale?

First of all, we don't expect it but we have been told not to pay it by both social services and the council out of the sale of the house.
Her income is now taken by the council - all her pensions and benefits go direct to cover cost of care. The house sale will have a sort of an order put against it so that the family cannot use that money except for legal fees, and a funeral bond or other items related to tidying up her affairs. They consider this as non-essential and so essentially, the only money she will be allowed to keep is the £16k savings allowance which then will leave her less than £9k for the rest of her life. Because that is all she has

TELLIT01 wrote: »

From a friends experience of a person going into a care home, the council will do everything in their power to stop anybody, or anything, gaining access to the funds.

Thank you for understanding where we are with this

parkrunner wrote: »

I can only imagine that the loan for a person of that age would be a secured loan on the house, so would be paid back automatically on the sale.

Very good point I will put that to the council

This is not my mother, not me....I'm just trying to sort through what is a very messy and distressing situation and researching what I was told by the council and social services. I'm a little upset at some of the very judgy comments

xylophone

very judgy comments

Judgemental? Or just fair to those who are owed money?


And what right has the council to rule that it has priority over other creditors?

Have you advised the creditors that their money is to be appropriated by the council?

TELLIT01

xylophone wrote: »

Judgemental? Or just fair to those who are owed money?


And what right has the council to rule that it has priority over other creditors?

Have you advised the creditors that their money is to be appropriated by the council?

I haven't seen anywhere that the OP agrees with the action the council has taken. I agree that they shouldn't have any priority over other debts but recent experience suggests that councils think otherwise.
It would be advisable to contact other creditors to let them know that the council has taken control of the property AND all her pension income so she has no way of repaying the debt. That might at least avoid more problems with the debt being passed to a debt collection agency and all that might entail.
In the case I referred to earlier, the property had been put into a trust many years previously, I don't know any details of why, or what the trust entailed. Even when the trust solicitors got involved it was months before the council would back down and allow the family any access to the property. They really do seem to think that they can do whatever they want.

calcotti

If you ask for the loans to be written off I expect the request will be refused and you can then go back to the Council.

I have no idea whether the council have the legal authority to disallow the paying of non priority debt.