Defaulting on credit card
Discussion
All
Need some help.
My father in law has just told us he owes over £10k on credit cards and is only meeting the minimum payments to three creditors. However he has been off with a bad knee (under doctors orders) and work will not allow him back due to health and safety. This month he drops (after 6 months full pay) to 50% pay so will not be left with much (if he pays all minimum payments) approx £31.00 left over. He does not run a car or have anything extravagant. However he does own his home outright.
We spoke to the main creditor today to make them aware that this months min payment would not be met, and they said we need to complete an income and expenditure analysis with them.
However a 62 year old man will not be able to do a 5 year IVA and has no way of repaying the debt.
Anyone have any advice?
I have been advised he can default, however can a charge be placed on his house?
What would this mean to him?
Other options?
Help please
Need some help.
My father in law has just told us he owes over £10k on credit cards and is only meeting the minimum payments to three creditors. However he has been off with a bad knee (under doctors orders) and work will not allow him back due to health and safety. This month he drops (after 6 months full pay) to 50% pay so will not be left with much (if he pays all minimum payments) approx £31.00 left over. He does not run a car or have anything extravagant. However he does own his home outright.
We spoke to the main creditor today to make them aware that this months min payment would not be met, and they said we need to complete an income and expenditure analysis with them.
However a 62 year old man will not be able to do a 5 year IVA and has no way of repaying the debt.
Anyone have any advice?
I have been advised he can default, however can a charge be placed on his house?
What would this mean to him?
Other options?
Help please
so form of negotiation can usually be made
citizens advice can usually be a good first port of call
he owns his house therefore has a methord of payment? Technically
tricky scenario i think you will lose some of your inheretiance for wifey when he dies is the most likly outcome as they will put a lean on the house when it is sold.
have you thought of a mortgage on the house lower repayments hopefully??
good luck explore all avenues
citizens advice can usually be a good first port of call
he owns his house therefore has a methord of payment? Technically
tricky scenario i think you will lose some of your inheretiance for wifey when he dies is the most likly outcome as they will put a lean on the house when it is sold.
have you thought of a mortgage on the house lower repayments hopefully??
good luck explore all avenues
hidetheelephants said:
More helpfully, why not remortgage to cover the debt; if the LTV is under 50%(and I can't imagine a habitable house will be worth less than £20k) the rate will be really low, a lot lower than the credit card thieves.
Once he is "late" his credit record will tumble, so the cost of refinancing will increase rather rapidly 
hidetheelephants said:
Not very helpful, but try living within your means?
More helpfully, why not remortgage to cover the debt; if the LTV is under 50%(and I can't imagine a habitable house will be worth less than £20k) the rate will be really low, a lot lower than the credit card thieves.
Not very helpful no, the op has said it's his father in law ffs.More helpfully, why not remortgage to cover the debt; if the LTV is under 50%(and I can't imagine a habitable house will be worth less than £20k) the rate will be really low, a lot lower than the credit card thieves.
He has also said the guy is 62 currently on long term sick, so he won't get a 20 year mortgage ( from most lenders anyway ) and being on long term sick probably wouldn't get a loan or mortgage full stop.
Other issue is why would he remortgage anyway and make the "unsecured" debt then secured against the house when he will have no doubt paid the unsecured high interest rates.
My advice would be to go to the cccs, they are helpful and should be able to negotiate lower repayments until he gets back on his feet.
anonymous said:
[redacted]
Mortgage is fully paid, with no savings, that's the main issue.He has lived beyond his means and finding out now is not the best time for me or the mrs, just bought another house and no spare cash.
We will go along with the CC co, and see what they say. Although after looking at things tonight, he only has £31 to live on after paying everything as it stands
I'd agree with the CCCS option. In my experience they seemed to do a better job with financial statements and chasing things up than Citizens Advice and have more specialist knowledge. He should be able to get one payment of whatever he has left split pro-rata between the different credit cards and look at things again when/if he returns to full time work.
anonymous said:
[redacted]
I'm not sure what the problem is.Get the expenditure sheet off the National Debt Line, make a few copies, and write a letter to each of the credit cards explaining the situation, and set out a payment plan. The credit companies will expect things like food, heating, and rent/mortgage to come before their debt as these have a precedence over the cc debt.
The credit card companies will then more than likely freeze the interest on the spot, and agree to much lower amounts being paid. They will either ask to reassess the situation in 6 or 12 months with a view to increasing.
You will be amazed at how flexible the credit card companies will be if you actually talk to them. The last thing they want is an IVA or bankruptcy or anything like that.
Take some advice though as to what the some credit companies ask you to sign - some seem to want you to waive some of your rights, so best nip down the CAB for that.
tinman0 said:
anonymous said:
[redacted]
I'm not sure what the problem is.Get the expenditure sheet off the National Debt Line, make a few copies, and write a letter to each of the credit cards explaining the situation, and set out a payment plan. The credit companies will expect things like food, heating, and rent/mortgage to come before their debt as these have a precedence over the cc debt.
The credit card companies will then more than likely freeze the interest on the spot, and agree to much lower amounts being paid. They will either ask to reassess the situation in 6 or 12 months with a view to increasing.
You will be amazed at how flexible the credit card companies will be if you actually talk to them. The last thing they want is an IVA or bankruptcy or anything like that.
Take some advice though as to what the some credit companies ask you to sign - some seem to want you to waive some of your rights, so best nip down the CAB for that.
Initially this seems great, but what happens on the 7th month!
AAT1981 said:
We spoke to the biggest creditor today and they have frozen all intrest for 6 months then either set up debt management plan or debt will be sold to a company.
Initially this seems great, but what happens on the 7th month!
Talk to them again and chances are they'll add another 6 months onto it. Initially this seems great, but what happens on the 7th month!
AAT1981 said:
We spoke to the biggest creditor today and they have frozen all intrest for 6 months then either set up debt management plan or debt will be sold to a company.
Initially this seems great, but what happens on the 7th month!
I think you're doom and gloom, he's sitting on a mortgage free property it'sInitially this seems great, but what happens on the 7th month!
not as though he's potless.
Firstly, why does he only have £31 a month left? Is he left with so little because he is servicing debt, or is he still living beyond his means? Is the £10k on the cards his only debt? If he was debt-free, would his income be enough?
If being debt-free would be enough and he could live on his income, release some equity from his property. Sure, it's an expensive debt if you look at what gets repaid, but it's not repaid until the house is sold or he dies so either way shouldn't be too much of an issue.
If being debt-free isn't enough, he needs to list his income vs outgoings and see what can be cut from the outgoings column to make the number at the end black rather than red.
If being debt-free would be enough and he could live on his income, release some equity from his property. Sure, it's an expensive debt if you look at what gets repaid, but it's not repaid until the house is sold or he dies so either way shouldn't be too much of an issue.
If being debt-free isn't enough, he needs to list his income vs outgoings and see what can be cut from the outgoings column to make the number at the end black rather than red.
sussexjob said:
AAT1981 said:
We spoke to the biggest creditor today and they have frozen all intrest for 6 months then either set up debt management plan or debt will be sold to a company.
Initially this seems great, but what happens on the 7th month!
I think you're doom and gloom, he's sitting on a mortgage free property it'sInitially this seems great, but what happens on the 7th month!
not as though he's potless.
And why would he convert unsecured debt, to debt using equity release?
Its more expensive and wold take even longer to pa off at a rate he cannot pay
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