Helping an elderly lady in debt

Grumpelstiltskin

First thing, the debt management plan, it it being run by one of the debt charities or a fee paying company?

If it is a fee charging company she should cancel it NOW .

See if you can find out if there is a CAB where she lives, they will help her sort this out, basically if she stops payments to the debt nothing terrible is going to happen.

claret140

Grumpelstiltskin said:

First thing, the debt management plan, it it being run by one of the debt charities or a fee paying company?

If it is a fee charging company she should cancel it NOW .

See if you can find out if there is a CAB where she lives, they will help her sort this out, basically if she stops payments to the debt nothing terrible is going to happen.

Hi,

I've messaged you the name of the company. Seems charity based but unsure.

She has been to CAB, perhaps a while ago and they were not very helpful and just suggested bankruptcy. 

Perhaps things have changed since.

Grumpy_chap

claret140 said:

Hi,

I am an IFA by trade and although I have a good knowledge of many financial aspects, loans are not something I recommend or deal with.

claret140 said:

I went to see the lady today at my referral client’s office. My referred client is her therapist for context.

Sorry if this is "teaching granny to suck eggs" but are you, and the Therapist, at risk of compromising your own professional standing by having any involvement in this situation?

Helping is very admiral, but you may be better to point in the direction of the appropriate debt services or CAB - at least they will give advice that is covered by suitable PI.  Does your PI cover any advice in regard to debt?

Doe the Therapist risk contravening client confidentiality by becoming involved?

Grumpelstiltskin

OK these people do need specialized help and you must be careful how much you get involved.

The best way forward would be for them to stop paying and try and get the debts written off because of their age and health but it does need someone who knows what they are doing,

Christians against Poverty would be ideal, you don't need to be a Christian to ask them for help and they don't push religion. Problem is they don't operate in all areas, the website would give an idea if they operate in their area.

RAS

I'm not a debt advisor but I've been knocking about these fora for some years.

Once upon a time, it was common for the non-charging DMP providers (National Debtline, Payplan and CCCS as it was then) to advise debtors to make token payments towards debt to deter legal action.

And 20 years later some were still making token payments, and still liable for the debt. Had they just stopped paying, the debt would have been statute barred after 6 years and even if they'd got a couple of CCJ's those probably wouldn't be enforced because there was no money.

If you read more recent threads here, you'll discover that those on MSE have issues with way the debt charities set up DMPs. Even now, they tend to do so immediately, which means that the debtor's credit records are marked Arrangement to Pay and creditors don't issue defaults. 

When a debt is defaulted, interest and fees are halted. Given this lady's debts aren't going down, I'd suspect that they are still attracting interest and fees because they were never defaulted. And she's living with the consequences of old practices in the debt relief industry. 

I'm not sure you need anyone legal to deal with this. 

The hard core answer to this would be that the lady does a DRO. A lot of the family income would be excluded from any calculations of spare income.

There are however two other tacks. 

It may be worth just doing credit record checks, in case any of these creditors are still reporting? But after this time it's unlikely.

I would suggest CCA requests as listed above. Any creditor who can't supply the required documentation has to stop debt collection. Given the age of these debts, there's a decent chance they simply don't have the evidence of liability required to continue pursuing the old lady. Certainly when I first joined it was common for debtors to massively reduce their debts because of shoddy and missing paperwork. Some very rarely had documentation.

EDIT: sold on debt doesn't often have required documentation.

The other factor is that the whole ethos has changed now; creditors need to consider affordability in a way that would have been alien 15 years ago. 

Your "client" appears to have been paying interest for 2 decades so should have no qualms about asking the creditors to write off these debts. Not least as the current owners probably paid 5 pence in the £ for the debt, so they've been rewarded already.

You suggest PTSD? Would her counsellor provide supporting evidence if the lady consented? Certainly, her age, the age of the debts, finances etc indicate that write offs would be very reasonable. We don't see huge numbers but some debtors here have cleared all or much of their debt after asking for write off, although it often takes two goes. 

I do also think that it might be an idea to ask her DMP provider to review how appropriate their current management of her situation is? Have they just been on auto-pilot, without consideration for her changing circumstances? Would, or could, her counsellor support her in making a call asking them to consider whether they should end debt collection and request write offs?

If the DMP provider won't or hasn't the resources to deal with write offs, then the lady could terminate the relationship and look for support elsewhere. There'd certainly be folk here who could provide advice, and she could get personal and practical help from CAB or CAP. 

ManyWays

The bankruptcy suggestion from CAB was probably spot on.

If a client doesnt want to go bankrupt it is unlikely that the DMP firm has done much wrong. It would help if you name them though unless you are 100% sure that they don't charge for the DMP. 

The lending may well have been irresponsible but it can be hard to win cases about lending that happened decades ago. I have never heard of insurance covering the legal fees for this. Irresponsible lending only removes the interest anyway.I think this sounds like a complicated red herring for your client.

Your client needs the debts cleared. That can be done in four ways: bankruptcy; DRO (probably); write off requests; and asking for CCA agreements and stopping paying if they cant be produced. 

Will your client be prepared to stop paying if told the debt is unenforceable in court?

Much the simplest option is a DRO or bankruptcy. 

Grumpelstiltskin

Manty Ways it is one of the non fee charging DMP providers.

Problem is as RAS says this has been going on for so long it should have been sorted out years ago.