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  • FIRST POST
    • frogga
    • By frogga 9th Apr 18, 6:03 PM
    • 2,109Posts
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    frogga
    Mum's got a DMP
    • #1
    • 9th Apr 18, 6:03 PM
    Mum's got a DMP 9th Apr 18 at 6:03 PM
    Hi All,

    My mum has recently told me she has a DMP. I had no idea at all she was in a pickle until this time last year. She has over 50k of debt now all managed by Payplan. They are really helpful and are now dealing with me over it all as she does not want to know anymore.

    She is nearly 70 and still working FT as a care assistant in order to continue payments. There are 15 different accounts that she makes very small payments to each month. Some of the payments are as little as 1 each month. She will be paying for another 100 years ;(

    The gentleman from Payplan told me on the phone today that I could try writing to each company that she owes to ask if they would consider writing off the debt. I just don't know what the likelihood of that is, and even what I should say? She owes all this money form various loans and credit cards and she did spend the money, but she has no idea at all what it went on and who all the different companies are, or even who they were if you know what I mean.

    The guilt, shame and stress of owing all this money is making her so depressed. I know she made big mistakes getting into all this debt, I am trying not to judge but I can't see what the hell she spent it on??!!! Gifts for other people I think?

    Shall I just help her to continue with the little monthly payments that will never pay off the full amounts, or would you try to see if they would consider writing them off? ALL of the companies write to her regularly asking if she wants to make settlement arrangements. For example she owes Cabot Ltd 7000 and they have said she could clear the debt for 1500, but she doesn't have 1500.
    Think I just wanted to share
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

Page 1
    • fabforty
    • By fabforty 9th Apr 18, 7:04 PM
    • 743 Posts
    • 3,017 Thanks
    fabforty
    • #2
    • 9th Apr 18, 7:04 PM
    • #2
    • 9th Apr 18, 7:04 PM
    Hi All,

    My mum has recently told me she has a DMP. I had no idea at all she was in a pickle until this time last year. She has over 50k of debt now all managed by Payplan. They are really helpful and are now dealing with me over it all as she does not want to know anymore.

    She is nearly 70 and still working FT as a care assistant in order to continue payments. There are 15 different accounts that she makes very small payments to each month. Some of the payments are as little as 1 each month. She will be paying for another 100 years ;(

    The gentleman from Payplan told me on the phone today that I could try writing to each company that she owes to ask if they would consider writing off the debt. I just don't know what the likelihood of that is, and even what I should say? She owes all this money form various loans and credit cards and she did spend the money, but she has no idea at all what it went on and who all the different companies are, or even who they were if you know what I mean.

    The guilt, shame and stress of owing all this money is making her so depressed. I know she made big mistakes getting into all this debt, I am trying not to judge but I can't see what the hell she spent it on??!!! Gifts for other people I think?

    Shall I just help her to continue with the little monthly payments that will never pay off the full amounts, or would you try to see if they would consider writing them off? ALL of the companies write to her regularly asking if she wants to make settlement arrangements. For example she owes Cabot Ltd 7000 and they have said she could clear the debt for 1500, but she doesn't have 1500.
    Think I just wanted to share
    Originally posted by frogga
    Have you or your mum considered bankruptcy?
    • frogga
    • By frogga 9th Apr 18, 7:12 PM
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    frogga
    • #3
    • 9th Apr 18, 7:12 PM
    • #3
    • 9th Apr 18, 7:12 PM
    Hi there fabforty,

    Pay plan recommended against it as she owns her own home and would have to sell it. It is a one bed cottage and the smallest house in the village so she wouldn't be ablt to 'downsize'. There is nothing anything like it in the village to rent which would mean she would have to move away from family into a small rental flat or similar and I think that would just about finish her off
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

    • Silvertabby
    • By Silvertabby 9th Apr 18, 7:16 PM
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    Silvertabby
    • #4
    • 9th Apr 18, 7:16 PM
    • #4
    • 9th Apr 18, 7:16 PM
    Then how much would she be able to obtain through some form of equity release? Would that be enough to clear her debts - especially if they all accept a reduced final payment?
    • frogga
    • By frogga 9th Apr 18, 7:34 PM
    • 2,109 Posts
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    frogga
    • #5
    • 9th Apr 18, 7:34 PM
    • #5
    • 9th Apr 18, 7:34 PM
    Hi Silvertabby,

    THANK YOU for taking the time to read and reply. Mum has thought long and hard about equity release. Step Dad REALLY WANTS TO, but only so he can have some 'spends'. But mum really wants to pay off the debt.

    A company she saw advertise on the telly said they would give her 100k maximum. Step dad wants to use 50k to pay off debt, and then spend the other 50k on retirement.

    There are a lot of scare stories about equity release. I think mum is mainly worried that step dad will 'blow the lot' in a few years (as they are obviously both dreadful with money) and then they would have nothing should they need it for care in the future.

    Do you think ER is a good idea?
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

    • Silvertabby
    • By Silvertabby 9th Apr 18, 7:57 PM
    • 2,749 Posts
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    Silvertabby
    • #6
    • 9th Apr 18, 7:57 PM
    • #6
    • 9th Apr 18, 7:57 PM
    Hi Silvertabby,

    THANK YOU for taking the time to read and reply. Mum has thought long and hard about equity release. Step Dad REALLY WANTS TO, but only so he can have some 'spends'. But mum really wants to pay off the debt.

    A company she saw advertise on the telly said they would give her 100k maximum. Step dad wants to use 50k to pay off debt, and then spend the other 50k on retirement.

    There are a lot of scare stories about equity release. I think mum is mainly worried that step dad will 'blow the lot' in a few years (as they are obviously both dreadful with money) and then they would have nothing should they need it for care in the future.

    Do you think ER is a good idea?
    Originally posted by frogga
    It's worrying that your step dad is talking about getting extra equity release for 'spends'. I wonder if he is responsible for your mum being in this pickle in the first place?

    If your mum took out just enough equity release to clear all of the debt, would she then have enough pension income coming in to be able to retire? What income does your step dad have?

    If I were in your shoes I would try to get 'final offer' agreements from all of your mum's creditors and look at just enough equity release to cover them. I fear that you will have to take steps to ensure that the money released is actually used to pay off all of the debts and isn't side tracked by your step dad.

    Some people on these boards will say that you shouldn't touch equity release with a barge pole - but I suspect that most of them are only thinking about their own reduced inheritance, and not what's best for their parent.

    At 70, it's unlikely that your mum will be able to carry on working as a carer for much longer. You need to sort this before she makes herself ill,

    Good luck.
    • frogga
    • By frogga 9th Apr 18, 8:17 PM
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    frogga
    • #7
    • 9th Apr 18, 8:17 PM
    • #7
    • 9th Apr 18, 8:17 PM
    thank you silvertabby, I am so grateful for your opinion.

    You have hit the nail on the head with regards to step dad. He is a 'live for today' kind of person and has no thought for the future or consequences. I would be unkind and unfair if I blamed him for all the debt, mum was as bad, but he certainly didn't help. ALL of the debt is in mums name. The house is in joint names. They both paid the bills and mortgage so that's fair. She 'hid' the debt, but he happily turned a blind eye if you know what I mean?

    She is very fit for a 70 year old, but yes I agree that wont last, and the worry will not help. I do feel very sorry for her, although I know it was all her own doing, she is not a bad person. I think a lot of the spending was on other people as she is very over the top being generous towards others.

    If I write and ask for settlement figures, but then she doesn't ER I wonder if the companies will get annoyed and tell her she HAS to pay it al off. I'm concerned that step dad will not agree to ER to just pay off debt if he isn't allowed any for himself. HE has retired, but only has a basic state pension, and out of that he pays a bank loan and Barclaycard ;( We don't get on or I would offer to help him pay off the card by switching to a 0%.

    His argument is that he doesn't want to be the richest person in the graveyard. That they are both fit and healthy so want to enjoy their retirement with days out etc, but they can't afford to on the pittance they have coming in. He thinks ER will let them enjoy their retirement and he has no desire to leave any money to his children.

    I wish I know how to advise her. If she got hit by a bus tomorrow and her house was sold it would pay off the debt and family would get the rest. I'd rather she had the debt paid off now, and the money was hers now to enjoy. I don't want any of it and nor does my sister. But ER seams SO SCAREY...
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

    • Silvertabby
    • By Silvertabby 9th Apr 18, 9:17 PM
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    Silvertabby
    • #8
    • 9th Apr 18, 9:17 PM
    • #8
    • 9th Apr 18, 9:17 PM
    Would taking out enough ER to pay off both of their debts with just enough - say 2K - as a nest egg work? Would they be able to live on their pensions without the temptation of taking out any further credit? I'm sure that someone will correct me if I'm wrong, but if you were to insist that they close their credit card accounts when they have been paid off then they probably won't be able to take out any further cards/loans with their pension-only income and credit history.

    Yes, ER sounds scary so you'll have to take appropriate advice. We're a bit young yet but, as we don't have any children to leave our house to we intend to look at some form of ER to pay for a cleaner, gardener, luxuries, etc when the time comes. There are different schemes, but we will probably look at the one whereby you take out a lump sum but don't make any monthly payments. Instead, the lump sum plus accrued interest is rolled up until the house is sold on both of our deaths or should we have to go into care.
    • Sparx
    • By Sparx 9th Apr 18, 9:40 PM
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    Sparx
    • #9
    • 9th Apr 18, 9:40 PM
    • #9
    • 9th Apr 18, 9:40 PM
    She owes 50k to ~15 different creditors? And she already has 1 and others with 7k balances asking for 1.5k to settle? I'd snap their arms off.

    Ask the other creditors for F&F settlements, or negotiate early repayment offers to them with your mum. You will be surprised seeing your mum's age and jumping at a F&F offer, hence she is getting letters in the first place before they think she will snuff it (in the nicest way)!

    She could get incredibly lucky and get them all settled for 15-30k depending on how hard you negotiate. Meaning she wouldn't need as much ER release. For instance if she could settle the lot for 25k, she could say take 35-40k on ER and use the other 15k odd left to 'enjoy life' should we say?

    More so if you and family are not fussed about inheritance, dependant on mum's home value and what proportion % you and family would receive. If you're more concerned about mum living her final 1-2 decades happy then so what if she gets an ER?

    Just my 2p on the matter after reading.
    Last edited by Sparx; 09-04-2018 at 9:42 PM.
    • frogga
    • By frogga 9th Apr 18, 10:07 PM
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    • 19,130 Thanks
    frogga
    thank you sparx and silvertabby, I appreciate your frankness.

    Yes it does seem like she'd be able to negotiate the amounts down quite considerably. I guess I would have to ask for good deals, then explain that they would have to wait while the ER goes through.

    No my sister and I don't want any money from inheritance, but I worry that once she has released any money, step dad will get a taste for it and want to get as much as they would offer. It would be gone in a flash as he is dreadful with money, and then she would have NOTHING to fall back on.

    If only we could look into the future and see how long we all live for then we could plan...

    I'm going to bed as I'm sick of thinking about it. As always I'm so grateful for people being so non-judgemental and straightforward.

    Night all.

    xx
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

  • National Debtline
    Hi frogga


    Equity release doesn't work for everyone, and your mum will certainly need some independent financial advice before going ahead (it can have implications for things like benefit entitlement). However if bankruptcy is ruled out because of the property and she has no realistic prospect of ever getting the debt paid off herself, it is worth considering.


    You've already pointed out some of the pitfalls, and both your mum and step dad will have to agree on what they would do with the money released. Getting creditors to agree to a full & final settlement would be one way to try and save them some money, but bear in mind that once a creditor agrees they often put a time limit on how soon the payment must be made. It's probably best not to make any offers until they have confirmation that they can get equity release, and how long it will take for the funds to be released.


    You'll find more information on equity release here https://www.nationaldebtline.org/EW/factsheets/Pages/equity-release/equity-release-schemes.aspx, including links to places where your mum can get some independent advice. I hope it all goes well.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • frogga
    • By frogga 10th Apr 18, 12:53 PM
    • 2,109 Posts
    • 19,130 Thanks
    frogga
    thank you so much, that is all very helpful xxx
    Say it once, say it loud ~ I'm an Atheist, Anti-Royalist, Socialist, Tea-Total Veggie Frog and PROUD!

    • debt doctor
    • By debt doctor 10th Apr 18, 2:48 PM
    • 4,257 Posts
    • 5,935 Thanks
    debt doctor
    Hi,

    You have received some good advice on this thread.

    I have used ER for a few clients to get them out of very tricky situations, most often when they have been at court for repossession as they could not afford the repayments - arranged ER - paid off mortgage - kept in the house.

    It's not for everyone - interest rates are about 4 - 5% which is a couple of percent more than the best standard mortgages.

    There can either be no repayments at all (interest compounded and outstanding balance paid off by eventual property sale upon death or long term care) or you can just make the small interest payments each month so the balance owing does not rise.

    AGE UK do a ER brokering service if you feel they are trust worthy? It's just a mortgage that gets paid in one lump at a certain point rather than regular payments along the way - nothing more special than that - and regulated like all other mortgages.

    One thing - I would not directly inform the creditors of doing ER as they are likely to want a much larger settlement. You should just give them the standard comment "the money is coming from a third party" - which of course it is.

    Good luck.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
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