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    • Smithy22
    • By Smithy22 12th Oct 19, 11:38 AM
    • 36Posts
    • 103Thanks
    Smithy22
    How best to help my Mum?
    • #1
    • 12th Oct 19, 11:38 AM
    How best to help my Mum? 12th Oct 19 at 11:38 AM
    Hi,

    I am looking for ways that I can help my mum with her debts but I don't really know what to do for the best.

    A little bit of background and context would probably help.....my parents are separated and have both been with stepchange for around 5 years now. My mum has been trying her hardest to pay off all her debts and has put her retirement off but she is approaching 70 and can't continue like this. I am keen for her to retire as soon as possible.

    She does not own any property (neither do I) so is currently renting. We are worried about the future and her lack of security. I am trying to get a total figure for her outstanding debt, it's still in the tens of thousands but exact amount tbc.

    I have been saving for my own mortgage but could use some of this money to help her - probably between 10 - 15k. I don't know if I would be best trying to pay off some of her debt (maybe by making f&f offers) or looking to buy her a small flat by using this money for a deposit. Though my research leads me to getting a mortgage for property for parents to live in is not easy - esp with a low deposit amount.

    Sorry I know there are not a lot of details here but just wanted to make a start. I will come back with figures once I have them

    Any advice gratefully received.
Page 1
    • Grumpelstiltskin
    • By Grumpelstiltskin 12th Oct 19, 11:41 AM
    • 2,507 Posts
    • 2,857 Thanks
    Grumpelstiltskin
    • #2
    • 12th Oct 19, 11:41 AM
    • #2
    • 12th Oct 19, 11:41 AM
    If she doesn't own property is there any reason she hasn't considered bankruptcy?
    • Smithy22
    • By Smithy22 12th Oct 19, 11:52 AM
    • 36 Posts
    • 103 Thanks
    Smithy22
    • #3
    • 12th Oct 19, 11:52 AM
    • #3
    • 12th Oct 19, 11:52 AM
    We have discussed it numerous times over the years. She doesn't want to and I can't change her mind. She wants to repay her debt if possible. Also, no one outside of my siblings know about my parents money problems and she thinks of she goes bankrupt everyone will know (I'm sure they wouldn't!)
    • Karonher
    • By Karonher 12th Oct 19, 12:05 PM
    • 699 Posts
    • 2,377 Thanks
    Karonher
    • #4
    • 12th Oct 19, 12:05 PM
    • #4
    • 12th Oct 19, 12:05 PM
    If the debt can come down to below £20,000 then she could apply for a Debt Relief Order. It would appear on a public register but who would be looking on it?

    If she was successful she could save her payments for the year and make F and F after that if she really felt that she wanted to pay back. If it was that or nothing I am sure most companies would accept very low offers.

    https://www.stepchange.org/how-we-help/debt-relief-order.aspx
    Last edited by Karonher; 12-10-2019 at 12:08 PM.
    Getting ready for Christmas 2019

    Aiming to make £5,000 online in 2019.
    • sourcrates
    • By sourcrates 12th Oct 19, 12:05 PM
    • 18,461 Posts
    • 17,357 Thanks
    sourcrates
    • #5
    • 12th Oct 19, 12:05 PM
    • #5
    • 12th Oct 19, 12:05 PM
    Hi,


    At her time of life the last thing she should have are money worries, bankrupcy is not the stigma laden poison challice it once may have being percived to be, you pay the fee, currently £680, everything is done online, and by post, there is no longer any requirement to appear in court, its all very low key to be honest, the official reciever will phone up to discus the bankrupcy procedure, and that is it, basically, after 12 months, she will be dis-charged, and that, will be that, all done.


    Another option is a Debt relief order, if her debts are 20k or below, a bankruptcy will appear in the gazette, still, i beleive, and on the insolvency register for a time, no one would know, unless they were looking.


    A third option would be to write to the creditors with a CCA request, i assume these debts will be quite old by now, so compliant paperwork may not be available, dependant on the outcome of that, you could write and ask them to take a commercial decision and write off the debts due to your mothers circumstances, there are a few options here, but all require the cooperation of your mother.
    Last edited by sourcrates; 14-10-2019 at 11:16 AM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • Smithy22
    • By Smithy22 12th Oct 19, 12:26 PM
    • 36 Posts
    • 103 Thanks
    Smithy22
    • #6
    • 12th Oct 19, 12:26 PM
    • #6
    • 12th Oct 19, 12:26 PM
    Thanks for the replies, she is co-operative...to a point! She finds it very hard to talk to anyone (especially me) about any of this. I will do some more research on bankruptcy before I talk to her again today. I think her concern is also how it would affect her pension but I will find out.

    I have been reading up in the cca thing today so will look into that too along with the debt relief order.

    Thanks
    • Unicorn cottage
    • By Unicorn cottage 12th Oct 19, 5:03 PM
    • 360 Posts
    • 426 Thanks
    Unicorn cottage
    • #7
    • 12th Oct 19, 5:03 PM
    • #7
    • 12th Oct 19, 5:03 PM
    Hi Smithy22

    I can't offer any advice but just want to wish you the best of luck with dealing with this. Sounds like the CCA route could be a winner but of course it depends on your mum's willingness to go down that route.

    It must be a very stressful situation for you.

    Xx
    Following the Martin mantra "Earn more, have less debt, improve credit worthiness"
    • sourcrates
    • By sourcrates 12th Oct 19, 5:11 PM
    • 18,461 Posts
    • 17,357 Thanks
    sourcrates
    • #8
    • 12th Oct 19, 5:11 PM
    • #8
    • 12th Oct 19, 5:11 PM
    I will do some more research on bankruptcy before I talk to her again today. I think her concern is also how it would affect her pension
    Originally posted by Smithy22

    If you're retired and your only income is a state pension and pension credits, the official receiver won't order you to pay anything after your bankruptcy. If you get any other income on top of your state pension and pension credits, for example a private pension, you may have to make payments after your bankruptcy.

    Basically anything more than £20 a month disposable income from a private pension will be taken by an IPA (Income payment arrangement).
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • BabyStepper
    • By BabyStepper 13th Oct 19, 6:39 AM
    • 457 Posts
    • 1,998 Thanks
    BabyStepper
    • #9
    • 13th Oct 19, 6:39 AM
    • #9
    • 13th Oct 19, 6:39 AM
    Wow, the people on this board really know their stuff. I learn something new every day here.

    Just wanted to say, please do not try to help your mum by sacrificing your own financial future. It will end up with both of you in vulnerable positions and that helps no-one. The advice you've been given above sounds good but your mum has her head in the sand a bit about her capacity to pay off the debt before she retires. It may be your job to help her understand the reality of it. In your position I might draw up some plans of what things might look like if she tried to pay it off herself, or if she went down the BR route, or CCA, or DRO. And talk her through the options.

    You are already helping her massively by exploring the options, gathering info and helping think it through. And that's enough.

    Best of luck.
    May '18 £21,228.07/October '19 £7,985

    62% paid

    Getting it done

    • Smithy22
    • By Smithy22 13th Oct 19, 3:57 PM
    • 36 Posts
    • 103 Thanks
    Smithy22
    Hi,

    Thanks, having had my own debts in the past I definitely won't be doing anything that I can't afford to do but I understand what you are saying.

    We have had chance to have a good chat and will definitely be looking to go down the CCA and F&F offer route. I think the main thing for her has been the realisation that, unlike me and a lot of people on these forums, when she pays back her debt is the day she retires (as she has worked this out). So at that point although she will be debt free (and have paid back over 60k) she doesn't get to 'start living' as her income drops to her pension and the extra she has been using to pay off her debts no longer exists...

    If I can look to get these debts paid off sooner and she can try to get another job that is more suitable for her age then this might be the way to go.
    • sourcrates
    • By sourcrates 13th Oct 19, 4:05 PM
    • 18,461 Posts
    • 17,357 Thanks
    sourcrates
    Do you know what type of debts we are looking at here, credit cards, loans, overdraughts, ???

    And roughly how old each account is ?

    Do you know if the debts remain with the original creditors or have they been sold on at any point ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • Smithy22
    • By Smithy22 13th Oct 19, 4:09 PM
    • 36 Posts
    • 103 Thanks
    Smithy22
    All I know at the moment is that she has 6 or 7 debts outstanding. A combination of cards, loans and overdrafts. I know 3 were Lloyds, one Tesco and I'm not sure about the other few.

    Some have been sold on but all are being managed through stepchange.

    Total value o/s is 21k and she currently pays £750 a month off them
    • Karonher
    • By Karonher 13th Oct 19, 4:46 PM
    • 699 Posts
    • 2,377 Thanks
    Karonher
    I know you have said that your mum wants to pay but do you think she would agree to a DRO . The debt would need to be below £20,000 so should be in a couple of months. This came from the Stepchange website.

    https://www.stepchange.org/how-we-help/debt-relief-order.aspx

    A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period then all of the debts included will be written off. As we're an approved organisation, we can help you apply for a DRO if you're eligible.

    If your mum really wants to pay something then she could make a full and final at the end and I am sure they would take a low offer knowing they were not legally going to get anything any other way.
    Getting ready for Christmas 2019

    Aiming to make £5,000 online in 2019.
    • Smithy22
    • By Smithy22 13th Oct 19, 5:07 PM
    • 36 Posts
    • 103 Thanks
    Smithy22
    Hi,
    I’ve looked at DRO but I don’t think she would qualify while she is working as it says “ have less than £50 in surplus income per month after paying your household bills and living costs” but while she is still working she has more surplus than this.

    If she stops working then I would imagine she won’t be paying anything off her debts anyway as step change wont be able to allocate money that she doesn’t have? My dad currently pays next to nothing to step change as he has only state pension income.
    • sourcrates
    • By sourcrates 13th Oct 19, 6:00 PM
    • 18,461 Posts
    • 17,357 Thanks
    sourcrates
    I know you have said that your mum wants to pay but do you think she would agree to a DRO . The debt would need to be below £20,000 so should be in a couple of months. This came from the Stepchange website.

    https://www.stepchange.org/how-we-help/debt-relief-order.aspx

    A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period then all of the debts included will be written off. As we're an approved organisation, we can help you apply for a DRO if you're eligible.

    If your mum really wants to pay something then she could make a full and final at the end and I am sure they would take a low offer knowing they were not legally going to get anything any other way.
    Originally posted by Karonher
    Once a DRO is complete, the debts are written off, you are not allowed to pay anything towards them at all, that’s not how a DRO works.

    The debts must be written off according to the insolvency service rules, no payment of any kind can be made, or accepted, if she did pay them anything, they would have to pay it back to her.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • fatbelly
    • By fatbelly 13th Oct 19, 6:52 PM
    • 14,211 Posts
    • 11,231 Thanks
    fatbelly
    Total value o/s is 21k and she currently pays £750 a month off them
    Originally posted by Smithy22
    So as things stand she does not qualify for a DRO. However...

    In 2 months her debts will be below 20k

    when she retires she will probably be below the £50 surplus threshold.

    Can she retire in 2 months?

    Is she OK with all the criteria:


    •Must not be a homeowner,

    • Debts less than £20,000,

    • Can have a car worth up to £1000,

    • No other assets of more than £1000,

    • Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

    • Cannot have had a DRO in last 6 years.

    If so, that's the way forward. I think someone mentioned the London Gazette. DROs do not appear there.
    • Karonher
    • By Karonher 13th Oct 19, 9:17 PM
    • 699 Posts
    • 2,377 Thanks
    Karonher
    Once a DRO is complete, the debts are written off, you are not allowed to pay anything towards them at all, that’s not how a DRO works.

    The debts must be written off according to the insolvency service rules, no payment of any kind can be made, or accepted, if she did pay them anything, they would have to pay it back to her.
    Originally posted by sourcrates
    Thanks - I did not see that in any of the pages discussing them.
    Getting ready for Christmas 2019

    Aiming to make £5,000 online in 2019.
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