I've discovered my neighbours huge debts

BSideBaby

*I’m a normal guy trying to help his elderly neighbour who has herself in some bother.*

The more I think about this, the more concerned I am.

Firstly, at 69 your neighbour is not 'elderly'. Secondly, has she asked you to step in and help? Is she incapacitated in some way? Taking away her iPad and cancelling her bank card without authority could land you in trouble if it comes to light.

As I've said previously the best you can do is give her contact details for StepChange and let her sort it out with their help (hopefully she still has access to the internet now you've taken her iPad away?). If I was one of her family members and discovered this had been going on I'd report it to the police.

[Deleted User]

sourcrates explained who IVA are suitable for when you were helping your parents with their finances in 2019. An IVA does not sound suitable for your neighbour with no assets. 

https://forums.moneysavingexpert.com/discussion/6012724/ccj-advice

Perhaps the best course of action would be to signpost your neighbour to the debt charities Step Change or National Debtline. 

fatbelly

Savedotmoney said:

I think the plan so far… hold letters to all debtors and potentially use breathing space, calculated payment amounts and try to negotiate a payment plan with them all based on available money.

we have a ref from the national debt line to give to Scottish power to hopefully use hardship fund to pay some of the remaining balance with them.

I agree a payment plan sounds more suitable than an IVA. I'd suggest getting her to talk to Stepchange or payplan (neither of whom charge a fee for dmps) and then backing out of the situation

sourcrates

fatbelly said:

Savedotmoney said:

I think the plan so far… hold letters to all debtors and potentially use breathing space, calculated payment amounts and try to negotiate a payment plan with them all based on available money.

we have a ref from the national debt line to give to Scottish power to hopefully use hardship fund to pay some of the remaining balance with them.

I agree a payment plan sounds more suitable than an IVA. I'd suggest getting her to talk to Stepchange or payplan (neither of whom charge a fee for dmps) and then backing out of the situation

I agree this is the best strategy for all concerned.

MrFrugalFever

Sorry I’m with sea-shell and bsidebaby on this one.

at no point have you made clear that you have either power of attorney or any other legal right for that matter.

whilst your intentions appear gratuitous, when things start hotting up with creditors, your ‘neighbour’ may well change her tune. A simple discussion with the bank by your neighbour alerting them to your activity is enough to start a full scale fraud investigation case.

You do not mention whether your neighbour is ‘of sound mind’ either.

theoretica

Savedotmoney said:

I've already inherited my parents debt problems in the past and I'm not prepared to take on responsibility of managing someone else's again. I will help but I have enough to manage in my own life. The fall out of my parents money problems etc has been poor mental health for myself so I don't want to go down that road.

I agree with others that the best thing you can do is help her get professional help from one of the charities - Stepchange as mentioned, Christians Against Poverty are another good one (and don't proselytise the Christian bit!).  With all respect for your good intentions, as well as knowing all about the available debt solutions for her situation the experienced assistance available from these charities will not have the personal emotional aspects to their assistance.

Savedotmoney

The pessimism on this forum is rife as ever. Let's clarify a few things so people don't assume every scenario.

I've known my neighbour for several years now and we're close friends, I'm also friends with her Son. The last thing I want to do is upset her son or my neighbour so I haven't taken it upon myself to tell him. The problem here lies in protecting her in the future and to stop her hiding away from her problems. She has hidden a LOT from her son and it has gotten her to the point where she is now, she won't ask for help. If she doesn't learn to ask for help then she will find herself back in the same position she has been. She has a spending problem, due to various problems in her life (like divorce) this has taken over and manifested itself as a coping mechanism for the pain. I have experience with creating my own debt this way so I understand why this has happened. I am trusted by her family and by my neighbour, she is sound of mind.

I am also aware that I have to safeguard myself from any events in the future, should she say pass away and people look back through the actions taken. So that's why I'm encouraging her to open up to her Son so she can talk about these issues rather than holding them all on her shoulders. She hasn't talked about these problems for 15 years and now we're in this position. I have been in touch with the National Debt Advice line and also StepChange. I've helped put Breathing Space in position for now so that they can help us make offers to the debtors and get in control of the payments. If things had remained as they were without cancelling direct debits, she would not have had enough money to eat. She was paying out about 30% more than she was earning and living on the bread line. I've identified priority debts like Scottish Power and we're working with them to access the hardship fund to reduce the debt. I've gone through all of her debts and written them all down on the StepChange website, including her budget etc. Now we have this time to get things under control. By putting StepChange in place they can take the reins and support her going forward.

Re the IVA, as one forum member has helpfully pointed out I came to this forum years ago asking for advice with my parents. So yes, I have a lot of experience of how debt can affect a family. My experiences with my family has taught me a lot and I've been through quite a few of the processes before. I came here to write down my thoughts and see what various members thought the best course of action was, not to be criticised for what if scenarios. Contrary to popular belief there are good people out there trying to do the right thing.

BSideBaby said:

*I’m a normal guy trying to help his elderly neighbour who has herself in some bother.*

The more I think about this, the more concerned I am.

Firstly, at 69 your neighbour is not 'elderly'. Secondly, has she asked you to step in and help? Is she incapacitated in some way? Taking away her iPad and cancelling her bank card without authority could land you in trouble if it comes to light.

As I've said previously the best you can do is give her contact details for StepChange and let her sort it out with their help (hopefully she still has access to the internet now you've taken her iPad away?). If I was one of her family members and discovered this had been going on I'd report it to the police.

My neighbour is present and fully aware of what is going on. She broke down in tears at the situation she is in and does not know how to get out of it. The iPad was costing her in excess of £120 a month, I phoned O2 to challenge them about it and they cancelled it as a gesture of good will, she agreed she did not need it for now. The iPad was being paid for over 36 months and would have cost thousands over the 3 year term. I'm not even sure how something like that got sold to a 68 year old woman. 100GB 4G plan, 2020 iPad Pro 128GB and insurance for something that sits in the arm of the chair in the living room? If it means anything, I've purchased her a second hand iPad as a gift which is more than suitable for her browsing. This means she can connect with her family and keep up to date online.

Her bank card was cancelled and a new one ordered, she hasn't been left without a card. It was cancelled to stop any websites with her card details charging her going forward.

kimwp

@Savedotmoney, your posts do not give the impression of asking for advice on whether the financial route you are advising your neighbour to take is the right thing (which is what you state above that you were doing)- may be worth you reading them again. They also do not give the impression of someone who understands the financial solutions to debt particularly well - as pointed out by another poster, you have been previously given information regarding IVAs, yet thought that this was an appropriate route for your neighbour when it wasn't.
If your neighbour is of sound mind, then she should be taking control of her finances herself - you can provide support, but she needs to be physically collecting the information, cancelling the subscriptions etc herself, otherwise how can she ever gain control?

JCS1

If there is a continuous payment authority in place for a debit/credit card, cancelled the card won't stop anything and a company can still take the money  The payment needs to be cancelled with the companies.  

https://www.moneysavingexpert.com/banking/recurring-payments/#avoid

Savedotmoney

kimwp said:

@Savedotmoney, your posts do not give the impression of asking for advice on whether the financial route you are advising your neighbour to take is the right thing (which is what you state above that you were doing)- may be worth you reading them again. They also do not give the impression of someone who understands the financial solutions to debt particularly well - as pointed out by another poster, you have been previously given information regarding IVAs, yet thought that this was an appropriate route for your neighbour when it wasn't.
If your neighbour is of sound mind, then she should be taking control of her finances herself - you can provide support, but she needs to be physically collecting the information, cancelling the subscriptions etc herself, otherwise how can she ever gain control?

No one is an expert in everything, we all have life experience in different ways so there are things I understand and some things I don't. I have my own experience of being in debt so it's something I can apply to this situation, given the severity of the debt and inability to pay I thought an IVA should be considered. Turns out it is not! Do you think I want to take on someone else's problems and manage their debt? No not particularly, like everyone I have my own life issues I'm trying to deal with.

Being critical because someone is taking immediate intervention so someone can put food on their plate isn't something I would consider an issue here. The criticism on this forum remains a problem and has been ever since I've been a member here, it appears to be a common theme to assume the worst and then criticise a person for something that hasn't happened yet, rather than looking at what is being done. To come here and people be worried for the neighbour due to the strange man looking in to her finances and taking everything away from her is an insult to be honest. I won't be returning to the forum in a hurry.

She didn't even know all of her debts which I had to find from her credit file and outgoings on her bank statements, so we could at least write them down. She had direct debits set up that were sapping every penny leaving her bank account almost empty every day. She didn't know what debts to pay certain debtors, e.g. she was paying Scottish Power £250 just to pay the debt off when this isn't something that she could afford. Only last month she took out another loan for £1500 to pay off debt with it. That's the cycle we're in and it needed to be broken. Now it has, we're able to stop uncontrollable spending and ask for the help from StepChange etc.