help for my brother please

paula7924

I have just found out that my brother is up to his eyes in debt (and has been for years) following a loan of £16,000 to a "mate" using cash advances on 4 credit cards. Unsurprisingly his mate's imminent inheritance payout didn't materialise and he disappeared leaving my brother to deal with the maxed out credit cards.

In 2005 he arranged a Gregory Pennington debt management plan (bad news I know, we are going to get him away from them). He has made all of the agreed payments to GP (but the halifax card shows him in arrears and is charging a late payment fee each month?) and he has managed to clear off his overdraft but his credit rating is lousy. He currently owes about £17,500.

Firstly, without a contract or anything written down about the loans being made does my brother have ANY recourse or is it just a very expensive lesson never to be so stupid again.

Secondly, is there any way my brother can improve his credit rating and/or get a new card? If he's going to apply for cheaper credit to clear the interest charging halifax card (21.95% on £3k) he needs to do it sharpish as he is probably going to be made redundant within the month and he also has to find a new place to live as he has just split up with his long term girlfriend (a fairly lousy February all in all).

Any and all suggestions greatfully received!

Alisonbel

Get rid of GP asap! He probably won't get anymore credit, why would he want anymore? I don't know much about the small claims system, he might be able to do something through them. Sure someone else will be along who knows more than me( not hard)

GirlRacer_2

I agree with Alisonbel. He needs to get shot of GP and go to one of the free debt companies. Do not take on any more credit (that's if he can get it)

bank_of_slate

Hi Paula, is there anyone who knows where this so-called 'mate' is?
...Linda xx

MissEyre

Encourage him to call CCCS or one of the other free debt charities for advice, and see if you can get him to draw up his SOA, so he knows exactly how much he owes, and what his actual income and expenditure are. I know it's hard, and he's lucky to have someone so supportive, but it is still his debt, and he really needs to take the lead in getting it sorted out...all the best x

tyllwyd

If you are already in a debt management plan, I had the impression that applying for more credit wasn't allowed? I could be wrong, but I think he should make sure of the exact position before he even thinks about doing anything.

About his mate - so several years ago, he handed over cash to him with just a verbal promise to pay it back, and now doesn't have any contact details for this bloke? I would think that he probably does have a case against this bloke, but if he's got no record of anything, it would be his word against the other blokes. It sounds pretty hopeless! If he could find a solicitor who could give him an initial consulation for free it would be worth getting a professional opinion, but it's hard to see what he could do about it.

Adrasteia01

Hi,
I think your brother really needs to come on here himself since it's his debt and he's the one who will need to pay it off. It would also be handy if he could post an SOA.

Also, why did he loan his friend so much money with only a verbal promise?

paula7924

I did a midnight reply last night but as it's not here I obvioulsy did something wrong! Saves you all from my ramblings anyway.

In summary
- Thanks to everyone who replied - I really appreciate it (as does my brother). I'm posting as he doesn't have internet access at the moment.
- He doesn't more credit per se, just better credit (we had hoped for a cheap balance trf).
The t&cs says he can't incur further debts other than those relating to normal living expenses. (thanks for the heads up tyllwyd) Does that mean that a balance transfer wouldn't be allowed but that he could try to improve his credit rating by getting a new card from Martin's "poor credit list", making small purchases and paying the card off in full each month.
- My brother tried to track down his friend (or what he thought was a good friend) but he had moved to Spain and disappeared off the radar.
I think the chances of getting any of the money paid back to him are remote, to say the least, but I'm loath to let him get off scot free. We need to have another go at tracking him down I think.

On a positive note DB has spoken to the Halifax who had no record that GP had agreed lower repayments, hence the late repayment fees every month and the arrears notice. He hadn't been able to speak to his account manager at GP at that point - it will be an interesting conversation when he does.....
Let's hope that it gets resolved and the charges are rescinded. In any case DB will arrange to pay off the arrears straight away and pay the extra needed every month to cover the minimum payment & avoid future fees. His plan is to clear the Halifax debt using his redundancy money (unless Halifax agree to stop charging interest) but GP have to agree to all of this.

I'm not clear from the T&Cs whether my DB is even allowed to talk to the Halifax whilst GP are acting.

We're not sure whether to get rid of GP straight away or not.

Ordinarily it would be a no brainer but as DB is about to be made redundant (2nd consultation on Wednesday) is it worth carrying on with them for the moment so that if he doesn't get a new job straight away he can claim on the PPI. Or do we cancel and go for a PPI misselling claim? I don't know if he has a very strong case for PPI misselling at all - the payments are shown on the statement, the PPI gumpf was in the pack so.......

We need to weigh up the potential PPI payout v ongoing costs + potential misselling claim foregone.

The PPI cover will pay £400pm from 1 month after unemployment starts. Costs until until PPI kicks in are £90 pm. PPI premiums paid to date is about £900.......

It's all a guessing game really, isn't it, but we need to look into sharpish.

Thanks for the support you guys - you have no idea how much help it is. x

RAS

Hi

Suggest that your bro gets himself down to his nearest library with a copy of a recent bill and signs up. Most libraries offer free access to computers, with maximum 1 or 2 hour a day slots. Vital for job hunting as well as MSE.

Then see http://www.moneysavingexpert.com/loans/debt-help-plan#help for the details of the debt charities. he does not have to sign up for a DMP to get advice.

And if he puts up and SOA, people can help him, see here http://www.moneysavingexpert.com/loans/debt-help-plan#help

I would also take advice on the PPI, as they do not pay out in many cases. read the PPI article and follow the links from there.

He also needs advice on paying off debts with his redundancy money. I have heard of people being refused benefits because they are in recent receipt of redundnacy payments but have used them to pay debts rather than maintain themselves. Also check the impact of the PPI on his benefit situation.

Most DMPs would require DB to share anything he did pay from his redundancy pro rata to all the creditors.

paula7924

Blimey - it is a minefield isn't it.
GP haven't called him back yet - I'll brief him ready for when they do, and make sure he logs on here.