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wise words would be appreciated on a dilemma I'm struggling with
i'm trying to help the partner of my best mate - long story short my best mate had an aneurysm and stroke 10 weeks ago, is out of intensive care but is in a neurology ward and can't talk/write - its a brain injury so we don't yet know the outlook. he's self-employed but obviously now can't work.
it turns out he has £35k debt on credit cards costing £450p/m, he also has £800p/m mortgage, but is now £4.5k overdrawn. The general (cab) advice is speak to the credit cards but as his partner doesn't have power of attorney (she's applying for deputy but this will take at least 12 weeks) they won't do anything. She does have access to his bank account though, so the question is should she cancel the direct debits on the credit cards so they're not a further £1500 in debt with a view to declaring bankruptcy in 12 weeks when she can act for him or let the charges keep on increasing until the overdraft runs out on the current account?
We've tried to get free legal/financial advice but a) the nearest organisation is based in cardiff and as they don't live in cardiff (20 mins north) they won't help (thanks for nothing!) and b) anyway its tricky saying they have access to his account. Please don't judge her/us on this access, if this happened you'd do what you need to do.
any views on handling credit card debt when you can't directly act for the person involved gratefully received (and it's possible its a proper catch 22). thanks
She does have access to his bank account though,
I believe that to action this would amount to fraud. Probably the last thing needed at this point.
No critical illness cover or owt?
If he's been a good payer the mortgage co should be alright
Deal with the secured debt, they cay the CCS off a fiver a month once it's been through the ccj process, at least he'll have a roof over his head
Worth a call at least to the debt help lines for the cards. They may not be able to help, but she may be able to get advise.
but is in a neurology ward
I would be seeing if the neurology ward has a social worker attached
Call Step Change and get advice.
They are a charity and are very well regarded.
https://www.stepchange.org/how-we-help/debt-advice.aspx
Deal with the secured debt, they cay the CCS off a fiver a month once it’s been through the ccj process, at least he’ll have a roof over his head
this is the aim but we can't get the cc co.s to adjust anything (to be fair their argument is you could be making up the story to stitch someone you don't like) but it's a good suggestion - no critical illness insurance
Worth a call at least to the debt help lines for the cards. They may not be able to help, but she may be able to get advise.
the step change site has been useful pointing to advice such as the above (payment scheme to ccs) but they don't advise on the total default advice
I would be seeing if the neurology ward has a social worker attached
they have a patient advisory service (so a nominated helper beyond the ward) but on financials they point you to cab/lawyers - I will get them to ask though
I believe that to action this would amount to fraud. Probably the last thing needed at this point.
hence the catch-22 situation - that said there are mitigating circumstances I would argue for in court if needed.
thanks all
edit: just seen the stepchange link, yep they're the best so far, thanks
Christians Against Poverty are another charity who get a mention on R4 quite often. Luckily never had need to call them personally, but they sound to be a very decent group of people who (contrary to their name) don’t sell religion. Best of luck, sounds like your having a tough time.
Christians Against Poverty are another charity
good call and a new one to me - I/she will call them a call, and many thanks for the kind words (it's her that is having the toughest time obvs)
Also - are you sure that PoA is what you need? Has the poor chap been assessed as capable of understanding what this means? If not, you'll need to chase Guardianship and this can be a long process.
Also – are you sure that PoA is what you need?
this doesn't apply as you allude - he is not capable of granting poa - how it works is she needs to apply for deputy, the doctor signs that he is not capable of dealing with his affairs, then the court of protection grant or not, in this case the doctor has just signed it so it will now take 10-12 weeks to process - hence in 3 months he will be in another £1.5k debt so is there anything we can do in the meantime...
Secured debt should be your priority - cc’s can get screwed no matter what they say. I’d cancel the DD’s, who is going to prosecute you in the circumstances? And in the unlikely event they do keep records of all correspondence/ calls to show you tried to get them to stop acting like d**ks.
Either way a terrible situation so hope it gets better.
I believe that to action this would amount to fraud. Probably the last thing needed at this point.
actually while I'm here this is my PSA: - the guy is 45, 3 kids - no apparent reason for this to happen but obviously this is now a tragedy - the main advice I get of what people should have in place is 1) critical illness cover and 2) apply for your partner to have poa - I now have both
https://www.gov.uk/power-of-attorney/make-lasting-power
cc’s can get screwed no matter what they say. I’d cancel the DD’s, who is going to prosecute you in the circumstances? And in the unlikely event they do keep records of all correspondence/ calls to show you tried to get them to stop acting like d**ks.
this is where I am and off-line i've just had advice to send the cc's a letter (keep copies) explaining the situation, acknowledging that per gdpr etc we understand they are in a difficult position but could they in extenuating circumstances pause or reduce the payments to £1, if no reply by end of month cancel the dd's (so on record you've done what you can).
Sorry about your mate.
Secured debt should be your priority
This is true and the advice to deal with a debt charity is good. But they can only advise, they wouldn't particularly be able to speed stuff up
any views on handling credit card debt when you can’t directly act for the person involved
yes- while as above they can be told to go swivel for the time being, he won't be £1500 <span style="text-decoration: underline;">further</span> in debt if you don't pay them; he'll be in default and his credit records will be knackered (so what, if the end result is going to be a voluntary bankruptcy anyway) and he might get some late payment fees and interest which on £35K won't be small but the debt won't be 3xrepayments higher. But I'd consider if there is a means to service that debt as well - parents, GF parents, as a last resort you...... just until the deputy is appointed. Then once deputy is appointed the CC co and the bank may be kinder than you think.
But it is a last resort - to put your own money in. I bailed my wife's brother out 10 years ago with a loan that he paid back good as gold for a few months....then he was a bit short, and then can I miss this month and now it's ten years on and he owes me nearly £8K....and that's all interest free, I had to pay the rest off myself to avoid the interest. If you do, and you know there's money in the house to come back or whatever, make it legal. He's your best mate but he may not be able to influence what happens after, and if he is declared bankrupt I think your loan would just be treated the same without preference.
It's not good advice to lend money to someone who's already in debt and looks like will not be working for a while.
Speak to the creditors but my advice would be to lose the debt as quickly as possible. Bankruptcy is not the evil end of everything, it's a new start.
Looking at the debt you mention, it seems they were living above their means anyway. It might sound harsh but it's the best solution. Start with a clean slate.
A good place to start will be the Money Advice Center.
here
Get your friend to call them.
But I’d consider if there is a means to service that debt as well – parents, GF parents, as a last resort you…… just until the deputy is appointed.
this is where my 'short version' doesn't help - 3 friends and i have already 'donated' £2k for the mortgage but we only realised last weekend the actual financial situation, but yes that was our initial reaction.
it seems they were living above their means anyway
sadly this is probably fair which is now why I am torn (and sharing i guess) between the above (trying to service the debt) and err'ing to your pov iolo that we can't keep paying his debts and so what to do.
ill also look at the MAC site too
thanks both, honestly all pov are considered/appreciated
Sorry for your friend. Provide all the practical advice and help you can but steer clear of financial assistance. There are proper means for that and they should be pursued appropriately. I suspect he will be made bankrupt, but so what? At this stage I am sorry to say it may be life insurance that is a more pressing concern. He has a life-changing injury and things will never be the same again. Your task is to help them see what they will be.
They won’t lose their house in the near term, but I’d be onto the cc companies to stop payments. That debt will likely be written off long term.
I’m really sorry to hear about your mate.
Given the circumstances bankruptcy sounds like the best idea. There’s lots and lots to consider before you do, so speaking to Step Change or the Money Advice Service first, they have excellent telephone advisors.
In any circumstance, given the circumstances I’d cancel the DDs, scary letters may arrive, they probably won’t talk to you or his partner straight away, but you can reply to them and explain the circumstances.
If the decision is made to go bankrupt I’d bet the court will be very understanding, they generally are with most people who aren’t unwell.
Another thing to consider, and it’s slightly more risky is just to default. Either way they’re going to be excluded from further borrowing for many years. The unsecured lenders will send scary letters and maybe even go for a CCJ but they’re all but unenforceable these days. Given the circumstances is almost a no-lose gamble. The goal of course to be maintain the mortgage.
thanks y’all - think writing to cc’s, then cancelling dd’s but replacing dd’s with £1 payments to each is the way to go, then reply to scary letters with copies of previous correspondence until deputy powers arrive and then properly deal with it (prob bankruptcy) - i feel like i have a plan 🙂
moral is keep debt under control and think ahead (being an adult sucks sometimes)