State of affairs of terminally ill father's debts.

Phonix

I recently paid my father a visit and had an insight into his finances. Consequently I think he's unknowingly (as always seems the case) commited fraud. Additionally I think the bank is guilty of misconduct but I don't think there is any proof.

his debts are

£1500 OD with halifax, £200 available. ~16%APR

£5600 MBNA gold credit card (very likely has repayment insurance)

£5000 halifax credit card (has repayments insurance and is being dealt with)

Another MBNA credit card, unsure of amount but is likely to have insurance.

but worst of all a 25k loan from the halifax

My father is terminally ill with cancer, currently in hospital unable to walk properly and has incontinence so is unable to go to the toilet without help and has to wear a catheture.

For the moment please disregard all of the debts apart from the 25k loan.

My father took out a six year 13k loan a couple of years ago to clear his cards. It's a great shame he didn't take proper financial advice or browse this site.

He steadily increased the size of this loan and last year during April increased it for the last time to 25k. He became unable to work in January because of the cancer.

Unfortunately he has known about the cancer for the last three or four years and has used this fact to use the payment protection on his cards.

My father has always insisted on insuring all of his debts, hence his initial loans from halifax were insured. I have rung the insurance company and they have found a number of settled debts on their system that were covered by insurance, however, the outstanding amount that was loaned to him in April last year is not covered by this insurance.

My father has always insisted that he's covered and I know he would not try to sign up to anything else. However abit of an arrogant man and in regards to financial matters he's easily duped through his ignorance.

My father was under the impression that this loan amount was an increase to his previous loan but it seems it's a new loan altogether. There appear to have been increases in the past where the insurance has remained but on this latest debt that insurance was either removed or not offered. I cannot see my father decling to be insured.

So is the bank guilty of misselling this loan and if this is possible, if there is evidence to that effect in the form of telephone conversations, would this evidence be admissible in court?

I'm also aware that my father applied for this extention to his loan (or as the bank says - a new loan) he applied for it whilst he was ill, and I will find out if he lied about whether he had his condition. Even if he didn't I guess he was still commiting fraud, and makes me wonder if bankrupcy may be difficult if his behaviour is found to be fraudulent.

Bankrupcy is obviously an option. The other debts can be dealt with through insurance however, the loan seems more of a legal matter. The crazy thing is during the time he's been ill, he has had loans from halifax with insurance cover, so he could have claimed under that cover during that peroid and written off his debt. As you can see this shows his ignorance in this matter and how it has come to this.

Phonix

I guess he'll just have to go bankrupt.

My intention is to try and delay this as much as possible, if not for how unsettling the process maybe but for the psychological effect bankruptcy will have before he dies, which could be within the next six months

for example I was told by the halifax that if he paid £40 into his account each month then it wouldn't default.

yeah right!

zzzLazyDaisy

Bankruptcy takes time, and I doubt that he will have that sort of time, from what you say.

If he dies, his debts will be paid from his estate once funeral costs have been taken care of (sale of house, etc etc).

If he has no assets, his debts die with him.

You don't mention if anyone else is involved. Just to be sure, these debts are not in the joint name with anyone else are they? Your mother, for example?

boogiemaster

Your farther is entitled to benefits as well now he’s poorly, if he’s under 65? He can claim mobility and DLA.
I would ring the DSS and enquire, sorry about your farther 

zzzLazyDaisy

Good point about DLA, there is a fast-track procedure for terminally ill people.

He won't qualify for payments while he is in hospital, but if there is any prospect of him being cared for at home, it is worth making the enquiry now. Mid-rate care DLA (or above) also entitles the person to extra money on their income support, and someone looking after them may also be able to get a carer's allowance, depending on their own circumstances. Not big money, but it all helps.

If he is over 65, he could claim attendance allowance, but that only has the care component, not the mobility component.

Phonix

Thanks for your support.

His debts are not in anybody elses name.

I should have stated originally that this post is only about his debts. He's been in receipt of benefits since he became unable to work in January, however I wasn't aware that DLA stopped when visiting hospital.

This sounds like incompetence by the council, as he's been in and out of hospital many times. I'd not relish the thought of having to deal with the council everytime he arrives and leaves hospital. Forget the cancer I think that would be enough to kill him.

zzzLazyDaisy

Phonix wrote:

however I wasn't aware that DLA stopped when visiting hospital..

Sorry to confuse the issue. I was referring to a new claim. If he is already getting benefits, they are only affected once he has been in hospital 6 weeks. At that point it is up to the person (or those taking care of his finances) to notify the relevant authorities.

Regarding the debt. Does the lender know he is terminally ill? If he doesn't have the money to keep up the payments, then eventually the first legal step would be to go to court. But this takes ages. I just wonder what would happen if he simply stopped making the payments, and someone intercepted the letters on his behalf? It seems unlikely that they are going to take a terminally ill man to court, and even if they did, by the time it got anywhere, he would probably not still be around.

Have you spoken to the CAB about this? They may be able to help.

I am so sorry you have this on your plate, at a time when you really need to be focussing on your father. Let us know how you get on.

Phonix

I'm basically aware of the routes to bankrupcy and how to go about it but most importantly what happens afterwards.

I've been told that it's best to just pop to cab, pick up some bankrupcy forms, have him fill these out and send them off to court.

I will be contacting cab because I need details for power of attorny, however what I really hope to get out of this post is advice as to whether to go through the bankruptcy process or form a legal dispute over the loan.

No problems. To be honest it seems to effect me less than everyone else but it's true that it would be alot better if these things could be dealt with quickly and that is one reason why I favour the bankruptcy route which is looking more and more inevitable anyway. Even if some of his behaviour is misconduct.

Most of the lenders know he's terminally ill yes, most importantly though the halifax.

Phonix

At that point it is up to the person (or those taking care of his finances) to notify the relevant authorities.

And if this person doesn't notify the authorities, does this person become liable to pay the council back for the overpayment?

This is important Thank you

zzzLazyDaisy

As far as I know, if there has been an overpayment, of DLA or IS, then the DWP will take it back out of the claimant's payments (there are some exceptions to this, if the overpayment is as a result of DWP error, and the claimant couldn't have been expected to know there had been an overpayment).

It sounds like you need to speak to the CAB about this too.

I am surprised that you have been advised to consider bankrupcy in the case of a terminally ill debtor, but, briefly, the fee for lodging a bankruptcy petition is £450, and the debtor has to meet the requirements in respect of debts and assets. You can find more information here:

http://www.debtadvicebureau.org.uk/bankruptcy/petition.html

Hope this helps

Johnhowell

Phonix,

My father is also terminally ill. A good friend advised to apply for attendance allowance immediately because under Special Rules your father is eligible - regardless of age, benefits, pension or hospitalisation.

Phone the Benefits Agency straight away - quoting "Special Rules" - because the allowance (£60.60/week) is only back dated to the date of your phone call. You can apply on his behalf. A medical report in required, but his GP's surgery can supply quickly, and a medical person involved in his case will need to sign the form - my father's Macmilliam Nurse did his.

Apply - nothing to loss - it does not effect his pension, does not even need attendance any anybody.

All the best,
John