Credit Card Debt in Difficult Situation Help Please

glaciercoffee

Hello! I am look for some advice please.

Background: My Spouse and I had some credit card debt but had consolidated onto a 0% card and were managing well, both working and paying off chunks. My spouse became seriously ill and after several months in hospital they came home and I am now full time carer. This was 5 years ago. Over the initial couple of years with neither working we ended up using the credit cards to pay for food, bills and then having to use them to take cash out to pay the other credit card and visa versa and then is spiralled into and unmanageable situation. And the 0% transfer ended. I am so annoyed to have got into this situation.

Current financial situation: My spouse gets state pension and attendance allowance. I get carers allowance and recently started doing a very small amount of work from home. I cannot do any more work than I am due to my caring role and struggling to fit in the little I do at the moment. My spouses condition is life limiting.

The Credit Card debt is all on 1 card in my spouses name solely and is currently £22,300.

What I have done so far: I have LPA so 6 months ago registered this with the credit card company and explained the situation. I wrote to them by post and stated in detail the situation. I asked if we could pay £350 per month (the minimum payments we had been paying were over £700) and asked for interest to be stopped to help us start reducing the debt and getting the situation resolved. I asked that they contact me in writing or email and not to call (I don't cope well on the phone with my own issues) and asked for 6 months to try to work out what to do. The 2 letters they have sent were generic and not specifically replying to our situation and I was hounded by calls which I didn't answer. They stopped interest for 6 months and seemed happy with the £350 per month payments. The 6 months has flown by and they have just restarted interest on the card and the minimum payment is about £650.

We had a 2nd card too which was connected to my spouses bank account. We decided to pay this off a few weeks ago using money from a private pension, leaving just enough in there to go towards funeral costs.

I have started regular savings into different accounts for emergencies and necessities (car repairs, vet bills, dentist, opticians, house repairs, appliances, Christmas etc)

We both jointly own our home with no mortgage.

We have 2 cars there is no public transport where we are and have regular trips to the Drs and Hospitals which are very far away so need one. The other is out of use and needs a lot of work. The main car is only worth about £1,700 the other needing work about £4,000. I am trying to save to get it on the road then will try to sell it to use towards the debt.

I cannot get a loan more than about £1500.

I have done our SOA as best I can but difficult with my earnings fluctuating but the £350 is manageable and this also take into account me continuing my savings pots for future things.

The Advice I need: Am I able to write to the Credit card company again and ask for the stopping of interest and payment of £350 to continue indefinitely?

Should I just stop payment entirely and wait for it to be defaulted and take it from there?

I am just keen to get it down as quickly as I can. I'm very worried what will happen if my spouse dies and the debt is still very high.

Thank you for reading and any help will be greatly appreciated.

FlorayG

I'm pretty surethatifthe ccis in your spouses name and they die then you don't owe anything, the spouse estate pays

sourcrates

Hello, and welcome to the forum.

I`m really sorry to hear about your situation, it must be a very difficult time for you, try not to worry too much about this debt, the way it works, if the worst should happen, and your spouses estate will not cover the amount owed, then the card company will just have to write the debt off, as no one else can be made liable for it, and that includes you.

In your circumstances I don`t think the £350 a month is manageable for you, I appreciate your commitment to pay this debt off, but realistically its not your debt, and your spouse is unable to afford this.

My plan would be to write to them again, referring them to your last letter, informing them of your spouses condition, but this time mark your letter "complaint".

This will ensure it gets looked at by a person, who can then act accordingly.

Don`t make any offer of payment, tell them the payment currently is unaffordable, and you can no longer keep up with it, which I think maybe nearer the truth, then ask them to make a commercial decision and write the debt off now, that would be the ideal outcome.

22k is chump change to them, its nothing, they write more than that off to tax every day, but you have to ask or you don`t get.

I had a similar case with my Brother two years ago, and it went quite smoothly once they were aware of his condition, they wrote off his full balance after just one letter.

glaciercoffee

Thank you both for your replies!

https://forums.moneysavingexpert.com/discussion/comment/82164393#Comment_82164393

This is very interesting and not a way I had even thought of going or knew we could. I feel very responsible for trying to pay it off. Thank you for all your advice. In addition I think it was quite clear to them for a long time that the balance was creeping up with only minimum payments being met but they did nothing to limit the credit available. Is it worth mentioning this in the letter too?

Feels quite a scary step to take but like you say it is worth a try. We are not worried about their credit history being tainted in our circumstances.

I thought when the worse happens I would be forced to sell our home to pay it off.

It's very comforting to be able to speak about all this. Thank you for your time, it is appreciated.

sourcrates

It would be better to get them to write off the debt now, rather than have to deal with it later on, you can, and should also mention affordability as well yes.

I am no expert on this, but I`m guessing you own the house as joint tenants, in which case the property would pass to you with no need for probate etc, and any debts would be paid from any money/other assets your spouse has, and if that didn`t cover all liabilities, well that`s just the way it is.

RAS

In a not dissimilar situation I advised someone to contact the bank with whom their partner had wrack up £25k unknown debt. and now had no income.

They hadn't got the LPA but the response was "Well we'll probably write that off. Can you contact us back in 6 months but we may need you to get deputyship before we can finalise, assuming there's no change in diagnosis."

glaciercoffee

Thank you very much for your advice - I have felt so alone for such a long time in dealing with this. I have started my letter but will finish tomorrow - it's quite a hard thing to face. Thank you

Brie

Just wanted to add my support in some small way and agree with what the others have said about handling this situation. I hope things go smoothly for you both and that you can enjoy the time you have together as much as possible.

ManyWays

A joint tenancy does not provide total protection against a deceased partner's creditors.

With your wife leaving no assets, ion their death their estate is insolvent. You have no liability for their credit card debts.

But the creditor could seek an insolvency administration order. Under Section 421A of the Insolvency Act 1986, a trustee could then ask the court to order the surviving spouse to pay an amount representing the value lost to the estate when the deceased's interest in the house passed automatically to the survivor.

That costs money… whether a credit card company would do this for 24k is uncertain. If there were 4 cards each of 6k, I would be surprised if any of the creditors would think it was worth pursuing the debt, but 24k is a lot of money.

Can you say when this credit card was taken out?

born_again

While not in terms of debt help.

Are you claiming all benefits you can to help with living costs?

https://benefits-calculator.turn2us.org.uk/

glaciercoffee

https://forums.moneysavingexpert.com/discussion/comment/82164637#Comment_82164637

Thank you very much for your kindness