How best to help my Mum?

Smithy22

All I know at the moment is that she has 6 or 7 debts outstanding. A combination of cards, loans and overdrafts. I know 3 were Lloyds, one Tesco and I'm not sure about the other few.

Some have been sold on but all are being managed through stepchange.

Total value o/s is 21k and she currently pays £750 a month off them

Karonher

I know you have said that your mum wants to pay but do you think she would agree to a DRO . The debt would need to be below £20,000 so should be in a couple of months. This came from the Stepchange website.

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

A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period then all of the debts included will be written off. As we're an approved organisation, we can help you apply for a DRO if you're eligible.

If your mum really wants to pay something then she could make a full and final at the end and I am sure they would take a low offer knowing they were not legally going to get anything any other way.

Smithy22

Hi,
I’ve looked at DRO but I don’t think she would qualify while she is working as it says “ have less than £50 in surplus income per month after paying your household bills and living costs” but while she is still working she has more surplus than this.

If she stops working then I would imagine she won’t be paying anything off her debts anyway as step change wont be able to allocate money that she doesn’t have? My dad currently pays next to nothing to step change as he has only state pension income.

sourcrates

Karonher wrote: »

I know you have said that your mum wants to pay but do you think she would agree to a DRO . The debt would need to be below £20,000 so should be in a couple of months. This came from the Stepchange website.

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

A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period then all of the debts included will be written off. As we're an approved organisation, we can help you apply for a DRO if you're eligible.

If your mum really wants to pay something then she could make a full and final at the end and I am sure they would take a low offer knowing they were not legally going to get anything any other way.

Once a DRO is complete, the debts are written off, you are not allowed to pay anything towards them at all, that’s not how a DRO works.

The debts must be written off according to the insolvency service rules, no payment of any kind can be made, or accepted, if she did pay them anything, they would have to pay it back to her.

fatbelly

Smithy22 wrote: »

Total value o/s is 21k and she currently pays £750 a month off them

So as things stand she does not qualify for a DRO. However...

In 2 months her debts will be below 20k

when she retires she will probably be below the £50 surplus threshold.

Can she retire in 2 months?

Is she OK with all the criteria:


•Must not be a homeowner,

• Debts less than £20,000,

• Can have a car worth up to £1000,

• No other assets of more than £1000,

• Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

• Cannot have had a DRO in last 6 years.

If so, that's the way forward. I think someone mentioned the London Gazette. DROs do not appear there.

Karonher

sourcrates wrote: »

Once a DRO is complete, the debts are written off, you are not allowed to pay anything towards them at all, that’s not how a DRO works.

The debts must be written off according to the insolvency service rules, no payment of any kind can be made, or accepted, if she did pay them anything, they would have to pay it back to her.

Thanks - I did not see that in any of the pages discussing them.

tlc678910

Hi,
I don't think it would be a good idea to buy a flat for your mum to live in as claiming housing benefit for the rent could be complicated by your relationship (seen as a contrived tenancy) and as the flat would be largely mortgaged you would probably rely on the rent to pay the mortgage?

Would you be able to buy a larger house suitable for your mum to live in part of it e.g. considering houses with a dining room/garage to convert or space for an extension with the goal to provide a largely independent living space for her?

Otherwise your mum could just continue to rent with help from housing benefit once she retired.

Best to get a debt solution in place before considering your mum living with you if possible so her debts don't cause you any issues.