Topic: Help PLEASE!!! Parents in debt for over 25k.....

[Daughter]

I live in the US and have just ended a call to my son who lives in the UK to tell me he has just found out that my parents are in debt for at least 25k!!
Unfortunately they never ever tell me whats going on, they are in their late 70's and the last I knew, they owned their house with no mortgage. They wont talk to me about it and unfortunately I am not in a financial position to go over for a visit to help. My brother lives with them who is 40 but is for a better word useless!! Plus we do not talk either!!
I need some advice, because they are at retirement age can they file for Bankruptcy (sorry dont know how to spell it) and if they did would they loose their house.  They have nothing really of any value. Or the other option, I suppose, would be to get a loan on the house and the 'mortgage' company own the house upon their death, however would this be an option assuming the amount they owe is registered against the house (I think you call it a lien).
Can anybody give me some advice as to what I or my son can do, I'm sorry for the lack of information but this is all I have to go on at the moment!!
Thanking you in advance!

[James Falla]

Hi there
 
Sorry to read about your situation. Can you confirm whether the £25k your perants owe currently is secured on their property or unsecured. If it is unsecured they have a number or options. The first thing for you to try to understand is what money they have available each month to pay debt. If they can afford say £200 a month, they may be able to simply get a loan secured against their property to pay off the unsecured debts leaving them with a lower more manageable monthly payment.
 
Alternatively, if you want to avoid borrowing against the property at all, it might be possible for them to start a debt management plan to reduce their monthly payments to a more manageable figure.
 
Given that your parents own their house outright then I suggest that bankruptcy is not an option as their house would be at risk.