Author Topic: HELP!? Do u have to pay my partners debt? (Mental Health Act/ Power of attorney)  (Read 2074 times)

toffobob

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Hello to all,
After some advice please guys for my mother,
My father suffered a stroke middle of last year, which sadly has left him with memory damage and comprehension problems. as such he has been sectioned under section 3 of the mental health act and is currently receiving specialist rehab. Frustratingly he has racked up quite a stack of debt, approx 20k, without her knowing. (how i dont know). anyways, so hes in hospital, and its now looking long term, maybe permanent, his full sick pay has covered everything up until now, but their savings are dwindeling. His employers are being difficult re: releasing his pension etc, so my mother is now getting power of attorney so she can help matters along. now the clincher, her name is on none of the debts, but she is terrified of people coming knocking on the door, we have already been told he will not regain capacity to return to work, so how do we get the creditors to cease chasing payments etc. will she be forced to sell HER house to pay her husbands debts?
any advice/links or anything would be so greatfully appreciated.
Cheers
Richard.

James Falla

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Hi there toffobob
 
The first thing to say is that as long as the debts were in your Father's name alone, then your Mother can never be held responsible for repaying them from her money. I assume that their house is in joint names? As such, it is possible that if the debts are not paid, the creditors will eventually secure county court judgements against your Father and then seek charging orders which would secure the debts against the property.
 
You mentuoned that your parnets have some savings. It might well be possible to appeal to the creditors given the circumstances and offer settlement lump sums in return for them writing off the debts. Are you aware whether any lump sum might be made available? For this to work your Mother would have to stop making the regular monthly payments so that they go into default.
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toffobob

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Hi james, thanks for replying,
When i stated they had savings, its nothing, litterally whats left of his fullrate sick pay (6months at full, 6months at half). Once his half pay sick pay finishes, (approx 4months), there will be no income to speak of, obviously my mother will return to work shortly, but my father will be unable, so the only income coming in is hers. Correct also, the house is in joint name, and thats what she was afraid of, she doesnt want to loose the house shes put so much into. Once she has power of attorney, guessing that there will be a delay in the accounts going into default, is she able to change to mortgage to her name only to prevent them securing money against it?
 

James Falla

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Hi toffobob
 
Unfortunately I am not able to comment on what your Mother will be able to do when she gains power of attorney over your Father's affairs. You would be best taking legal advice about this and then whether or not this would enable her to move the house into her name alone. Ultimatley even if she does manage to get the house in her name, your Father's creditors might be able to successfully argue that she has done so with the sole purpose of unfairly prejudicing them and so they may still gain charging orders.
 
Can I ask whether there is any equity in the property at all? Also have you sat down with your Mum to go through all the household income and expenditures and work out whether there is any disposable income with which to make offers of monthly payment to the creditors. If this can be achieved it could well stop them from taking further court action given the circumstances and give a breathing space while you decide the best course of action.
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toffobob

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Hi james,
regarding the property, there is still a mortgage on the house for about a third of the value. Ive gone through income/expenditure with her following an advice sheet we got from CCCS, at the moment the only household income is his sick-pay (at half rate) which will cover their mortgage, council tax, utils, food, but with no disposable income to speak of. in 4 months time (when half rate sick pay runs out), assuming that my mother is unemployed at this time, there will be nil income what so ever. Im unsure yet, but i believe she can apply for disabilty benefit for my father, and perhaps carers allowance, but that will be next to nothing. short of selling the house, or his pension being released early, there is no money to pay the creditors. thoughts?
thank you by the way!
 
Richard.

James Falla

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Hi Richard
 
Unfortunately this is a very difficult situation. Given that there is significant equity in the property, the opportunity for your Father (or your Mother on his behalf) to apply for bankruptcy or an IVA to try and clear his debts will be limited and his equity in the property would have to be released.
 
As such short of selling the house, settling the debt and moving on from there I feel the only option will be to put in place a debt management plan, perhaps based on token payments of £1 - £5 a month initially. This should help prevent further legal action from your Father's creditors and give a breathig space. Perhaps it will be then possible for the family to rally round and get a lump sum together which could be offered to th creditors to settle the debts. You may be able to settle for as little as 30% of the outstanding debts after the accounts have fallen into arrears and a debt management plan has been paid for 6 months or so.
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toffobob

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Thanks james, she's popping to citizens advice today to see about starting the debt management plan, i think it will be her only option. Hopefully when my fathers pension is released there will be a tidy enough lump sum to make an offer. lets hope anyways!
 
thanks again.
 
Richard

James Falla

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No problem at all Richard. I hope your Mother had a good meeting at the CAB. As you say if she starts a debt management plan and then gets a lump sum down the line she can offer to settle the debt. This would be the best solution all round.
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