Helping Dad with debt

rachelmc_4

My dad is about to retire due to ill health and has debt with companies such as Lowell (around £2k), Cabot (around £2k) and capital one (£?) as well his mortgage (£9k) and a loan (?). I’m trying to help him pay off his debts which I have just found out about as he physically cannot keep working. The loan company has not written to him since 2008 when he went and saw CAB who helped him to reduce his payment to £50 but he has no idea what he owes. We are trying to find all the figures out. My question is, does anyone have much experience in writing/calling companies and asking for settlement figures? Although I can help him, I’m not sure I can afford to pay all of the money. We have been on his credit report which shows non of these debts, not even his mortgage which I cannot understand. Any advice appreciated. 

sourcrates

Debts are likely to be far too old to be reported on his credit file, which is quite good from his point of view.

Right, more good news, you should keep your money, and him his, your Dad has various other ways to deal with this, trying one strategy does not preclude him from trying another should the first fail.

If ill health and retirement beckon, then your first strategy is to write to all the companies concerned and explain the debts are becoming unaffordable due to ill health and reduced income, and ask them to take a commercial decision and write them all off, go straight for the jugular, don`t mess about with "maybe you can accept this or that" ask them to write them off, be crystal clear.

A likely response will be to put the accounts on hold, and they may ask for evidence, so anything that supports this position, Dr`s letter, medical history etc, will be ok.

Quite a few posters to this forum have had success this way, including myself on behalf of my Brothers debts.

Should that fail, there is another avenue that will likely bare fruit, which I won`t complicate matters with now unless you need it, see how this pans out first.

RAS

At this stage, definitely aim for an ill-health write off on all the consumer credit, including retirement, as per sourcrates.

I'd be tempted to stop paying them as well.

Concentrate on getting that mortgage paid off. Is he likely to get a lump-sum payment?

rachelmc_4

Thanks both for your advice. RAS no there will be no lump sum and he will only get state pension plus £250 a month pension from private fund. Mum still works for another 2 years but only earns around £750 a month 

Brie

Is he still paying any of the really old debts? If not when did he stop?  If he(you) do contact any of the creditors ask them how much is owed but don't admit that he agrees anything is owed. Suggest all contact is done by snail mail so no one gets any phone numbers or email addresses which might make it easy for them to harass him.

born_again

Given this sounds like no savings. Might be worth investigating if there are any further benefits that may be due, due to illness.

rachelmc_4

Thanks all. He’s paying all the debts. Loan at £50 a month, capital one at £25 a month, Lowell at £15 a month and Cabot at £10 a month.

Brie

Those are all non priority debts. Believe though the mortgage counts as a priority one so I'm tempted to say stop the rest except the mortgage.  I assume this is also your mom's debt too?

enthusiasticsaver

I would not pay any of the credit cards/loans and focus solely on the mortgage. Ask the companies to write off due to ill health. 

rachelmc_4

Only the mortgage is mums joint debt. Rest is solely dads. 

EssexHebridean

Remember that there are three difference credit reference agencies and they don’t all show exactly the same. You can access credit reports for free using the MSE Credit club, Clearscore, and Credit Karma - I think those are the three avenues that cover all three CRA’s. If you have only checked one though this might be why you aren’t seeing the debts. 

Echoing also that your parents should concentrate on their priority expenditure - so mortgage, council tax, heat, light and water, food, essential travel, insurance.  Could I suggest that you sit down with them and use the Statement of Affairs calculator we recommend on here (link in my signature below) and make sure that they have sufficient to cover everything - including beginning to ensure some money is set aside each month for an emergency fund. This can be done simultaneously to going through the process Sourcrates has outlined in connection with the debts. It might also be a good plan if you can get to the bottom of why and how the debts occurred although I appreciate as effectively “child to parent” that conversation will need to be a gentle one! It is important though as they will not have the money to service debt going forwards - this is also the reason for the emergency fund.