Help required for someone on the breadline

Dove22

DH and I are helping his mum try to sort out her finances but have got a bit stuck on how to advise her on one particular situation and hope someone on the forum can offer some advice. The situation briefly is as follows:

Mum (70) and disabled son (30) on benefits. Relationship with Dad (60) has broken down and he now spends 90% of his time outside the UK. He doesn't work. Mum is now responsible for all finances and has set up her own bank account. However, they still have a joint account with a £3k overdraft which is currently costing her £25 a month in interest. Dad got some inheritance money when his mum died, and we think he has enough to pay it off, but he won't entertain the idea, not even half of the debt (they are equally responsible for the debt). However, he is still withdrawing money from the account. The bank have said they can't close the account without the debt being paid off and a loan would be at a similar rate, neither of which she can really afford. I suspect he is still claiming benefits (although I can't be sure).

Clearly we would like them to come to some amicable arrangement, but it would be helpful to know if anyone has gone through something similar and if there are any options for how to deal with the situation. They have no assets to speak of and have rented all their lives, so no home equity. As far as we know (new information comes to light every few weeks) there are no other debts.

DigitalJedi

Not sure if this will help but when I split up with my GF, one of the first things I did was convert the joint account to "Both to sign" status. This only needed one of us to request. What this meant is that one person cannot continue to take money out. It won't pay off the debt but will stop things from getting worse.

Not all banks do this but its worth asking.

liney

Or will they not freeze the account as opposed to close it?

She will probably end up paying it off herself by the sounds of her DH's behavior, but at least he couldn't keep adding to the debt.

MiniLaura

Hi

Would it be possible to report the father for benefits? At least alert the system that he is not in UK full time? It may be he is not claiming but would make sure. If its a joint claim then perhaps mum and son would be better off claiming as individuals if they claim anything ie housing benefit etc?

Its never an easy thing to do but it sounds like the man is not taking responsibility and needs to face up to reality. I'd also recommend doing what you can to stop him withdrawing any more money.

Dove22

Many thanks for these replies. Freezing or getting both parties to sign sounds like a good idea to at least stop the situation getting worse. MIL has analysed the debt and worked out how much they've each run up and what is joint responsibility. We're hoping he'll accept this and take responsibility for his part. We're look to see if she qualifies for an A&L account with a 0% overdraft so that her payments are at least starting to eat into her portion of the debt and hopefully leaving him with the responsibility of meeting the rest.

margaretclare

A&L only allow 0% overdraft for one year, AFAIK.

floss2

Re the A&L account, would she not have to have a regular income of more than pension-level to get that account?

I would second the suggestion to report benefit fraud. just to clarify that.