Inappropriate / irresponsible lending LTSB

[mrsred]

Hi everyone - any advice would be much, much appreciated.

 

I found out today that my mum is drowning in debt.

 

I called the bank to try and arrange some sort of management plan and was completely shocked at how much debt she had managed to run up

- i am in now way trying to shift the blame here.

. my mum has been very foolish and has become so embarrassed that she has buried her head in sand hoping this would go away...

but my mum is unemployed and only gets benefits paid into her account every single month..

how on earth she managed to get the loans approved is beyond me..

 

She took 1 loan in 2009 for £15k

a second loan in 2010 for £7.5k

and has a credit card bill of £6k

- all from LTSB.

 

To top it off she abandoned her LTSB account back in Nov 2011

and ever since has had another current account that receives all her benefits..

. she thought she just stopped paying the loans and it was her intention go to CAB to sort something out (which never happened).

 

It appears however that LTSB have continued honoring the direct debits by increasing her overdraft limit every month!

When she left them back in Nov her overdraft of £500 was clear.

. she now has an overdraft of £4500 ontop of the remaining balances on the loans.

How could this have happened???

 

LTSB have claimed today that the account is now closed

and they had no way of opening or viewing the account so they could not explain why they continued honoring the payments..

 

. i have been asked to call back on Monday to speak with the collections department.

 

Does anyone have any advice how we can handle this?

 

I have recently been made redundant so i will pay her credit card bill for her...

but i cannot afford to pay anymore.

. i just hope they let her pay a smaller amount each month and that they STOP adding interest and charges for the remaining debt.

 

So i am not trying to make this go away..

i do however feel that the bank have a responsibility and have been completely irresponsible in their lending.

. they just kept throwing money at her.

 

.. what can i do about this??

[dx100uk]

well dont settle anything till your are sure PENALTY charges & PPI have been reclaimed where they exist.

 

dx

[mrsred]

Hi there im sorry can you confirm what you mean please? This is all very new to me... I will ask for interest and charges to be frozen.. there was no PPI because my mum was unemployed.. Do you mean that CAG cant give advice until i make sure charges are reclaimed?

[citizenB]

No, not at all, it is just in your interest to check that there are charges that can be reclaimed and then reclaim them.

 

You might want to have a read of the following and then perhaps have a chat with one of the agencies mentioned.

 

If you are experiencing difficulty in repaying your debts, CASHflow is a way for you to negotiate affordable repayments with your creditors. Before you can use CASHflow, you must have spoken to one of the free advice agencies licensed to offer CASHflow to their clients. The advice agency will start by talking to you about all of the options available, and can help you to decide if CASHflow is the right one for you.

 

If you decide to use CASHflow, you will be provided with all of the tools you need to be able to complete your own financial statement and negotiate offers of repayment with creditors yourself. This will enable you to stay in control of your situation, but still have support from an adviser at any stage if you need it.

 

You can contact a local advice agency to check if they offer CASHflow. You can find a list of free advice agencies that are near to you by searching for a money adviser in England or Wales, Scotland, or Northern Ireland.

Alternatively, you can call National Debtline on 0808 808 4000

CASHflow: http://www.cashflow.uk.net/

National Debtline: http://www.nationaldebtline.co.u k/

https://www.mymoneysteps.org/

Also as highlighted in the CAG newsletter...

There is the new CAB system that might also be worth a look, this system saves all your details, has guidance allowance figures to work with if you wish and you do not need to be invited / signed off etc with this system, just log in and away you go (see below)

 

(Also, there are a number of other self help tools and systems around so might be worth a little exploration if this is what you eventually decide on.)

 

http://mymoney.nedcab.org.uk/moneyadvice/

 

http://mymoney.nedcab.org.uk/moneyadvice/ (example of completed dmp)

 

IMHO, National Debtline would be the better of the agencies to have a word with.

 

Whilst it is very good of you to consider parting with some of your redundancy money to clear Mum's credit card, it might be worth considering offering a lower amount in Full and Final Settlement.

 

I am really surprised that the bank have continued to raise her overdraft in order to pay direct debits knowing her financial situation.

 

IMHO, you need to seriously think about negotiating with the bank and getting them to accept some of the responsibility for helping your Mum dig the hole she has found her self in.

 

Perhaps if there are any charges on the current account - dispensing with them, and again perhaps accepting a lesser amount in Full and final settlement - if this cant be afforded in a lump sum, then for them to accept installments.

 

Please dont do anything without first seeing what alternatives you have.

 

 

[dx100uk]

and dont think just because she was unemployed they'll be no PPI!!!

 

check and double check all her accounts

 

dx