How best to help my Mum?

Smithy22

Hi,

I am looking for ways that I can help my mum with her debts but I don't really know what to do for the best.

A little bit of background and context would probably help.....my parents are separated and have both been with stepchange for around 5 years now. My mum has been trying her hardest to pay off all her debts and has put her retirement off but she is approaching 70 and can't continue like this. I am keen for her to retire as soon as possible.

She does not own any property (neither do I) so is currently renting. We are worried about the future and her lack of security. I am trying to get a total figure for her outstanding debt, it's still in the tens of thousands but exact amount tbc.

I have been saving for my own mortgage but could use some of this money to help her - probably between 10 - 15k. I don't know if I would be best trying to pay off some of her debt (maybe by making f&f offers) or looking to buy her a small flat by using this money for a deposit. Though my research leads me to getting a mortgage for property for parents to live in is not easy - esp with a low deposit amount.

Sorry I know there are not a lot of details here but just wanted to make a start. I will come back with figures once I have them

Any advice gratefully received.

Grumpelstiltskin

If she doesn't own property is there any reason she hasn't considered bankruptcy?

Smithy22

We have discussed it numerous times over the years. She doesn't want to and I can't change her mind. She wants to repay her debt if possible. Also, no one outside of my siblings know about my parents money problems and she thinks of she goes bankrupt everyone will know (I'm sure they wouldn't!)

Karonher

If the debt can come down to below £20,000 then she could apply for a Debt Relief Order. It would appear on a public register but who would be looking on it?

If she was successful she could save her payments for the year and make F and F after that if she really felt that she wanted to pay back. If it was that or nothing I am sure most companies would accept very low offers.

https://www.stepchange.org/how-we-help/debt-relief-order.aspx

sourcrates

Hi,


At her time of life the last thing she should have are money worries, bankrupcy is not the stigma laden poison challice it once may have being percived to be, you pay the fee, currently £680, everything is done online, and by post, there is no longer any requirement to appear in court, its all very low key to be honest, the official reciever will phone up to discus the bankrupcy procedure, and that is it, basically, after 12 months, she will be dis-charged, and that, will be that, all done.


Another option is a Debt relief order, if her debts are 20k or below, a bankruptcy will appear in the gazette, still, i beleive, and on the insolvency register for a time, no one would know, unless they were looking.


A third option would be to write to the creditors with a CCA request, i assume these debts will be quite old by now, so compliant paperwork may not be available, dependant on the outcome of that, you could write and ask them to take a commercial decision and write off the debts due to your mothers circumstances, there are a few options here, but all require the cooperation of your mother.

Smithy22

Thanks for the replies, she is co-operative...to a point! She finds it very hard to talk to anyone (especially me) about any of this. I will do some more research on bankruptcy before I talk to her again today. I think her concern is also how it would affect her pension but I will find out.

I have been reading up in the cca thing today so will look into that too along with the debt relief order.

Thanks

Unicorn_cottage

Hi Smithy22

I can't offer any advice but just want to wish you the best of luck with dealing with this. Sounds like the CCA route could be a winner but of course it depends on your mum's willingness to go down that route.

It must be a very stressful situation for you.

Xx

sourcrates

Smithy22 wrote: »

I will do some more research on bankruptcy before I talk to her again today. I think her concern is also how it would affect her pension

If you're retired and your only income is a state pension and pension credits, the official receiver won't order you to pay anything after your bankruptcy. If you get any other income on top of your state pension and pension credits, for example a private pension, you may have to make payments after your bankruptcy.

Basically anything more than £20 a month disposable income from a private pension will be taken by an IPA (Income payment arrangement).

BabyStepper

Wow, the people on this board really know their stuff. I learn something new every day here.

Just wanted to say, please do not try to help your mum by sacrificing your own financial future. It will end up with both of you in vulnerable positions and that helps no-one. The advice you've been given above sounds good but your mum has her head in the sand a bit about her capacity to pay off the debt before she retires. It may be your job to help her understand the reality of it. In your position I might draw up some plans of what things might look like if she tried to pay it off herself, or if she went down the BR route, or CCA, or DRO. And talk her through the options.

You are already helping her massively by exploring the options, gathering info and helping think it through. And that's enough.

Best of luck.

Smithy22

Hi,

Thanks, having had my own debts in the past I definitely won't be doing anything that I can't afford to do but I understand what you are saying.

We have had chance to have a good chat and will definitely be looking to go down the CCA and F&F offer route. I think the main thing for her has been the realisation that, unlike me and a lot of people on these forums, when she pays back her debt is the day she retires (as she has worked this out). So at that point although she will be debt free (and have paid back over 60k) she doesn't get to 'start living' as her income drops to her pension and the extra she has been using to pay off her debts no longer exists...

If I can look to get these debts paid off sooner and she can try to get another job that is more suitable for her age then this might be the way to go.

sourcrates

Do you know what type of debts we are looking at here, credit cards, loans, overdraughts, ???

And roughly how old each account is ?

Do you know if the debts remain with the original creditors or have they been sold on at any point ?