Credit Card debts that cant be repaid

Discussion in 'Money Management & Banking' started by smallbuyer, 28th Jan, 2020.

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  1. smallbuyer

    smallbuyer Well-Known Member

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    I know this old fellow on the pension who has managed to run up a massive CC debt, he is a bit cagey but its 20-30k I believe. My understanding is he got the card back in the old days when credit card offers came in the mail and all you had to do was sign. He has no money or major assets and is unlikely to ever have income above the pension (which I reckon this CC interest must be taking >25%). No chance he could ever pay it back without winning lotto. Did I also mention he is sick (terminal I think) :( and also bad at managing money (hence the debt) :( It is with a big 4 bank.

    What are his options?

    If he just stops paying what will they do?

    Is there any option to get out of it as im pretty sure no time in the last 20 years would he have had the income to qualify for such a credit card?

    Is it also worth seeing if the bank will take an offer to get rid of the card, say if his family will put up $5k?

    If he dies with this debt what happens? Will the bank try to seize personal effects and minor assets from the estate?

    Any other ideas to help a poor old fellow out?


    Cheers
     
  2. Beano

    Beano Well-Known Member

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    Can you lend him the money to pay it off ?
     
  3. Marg4000

    Marg4000 Well-Known Member

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    Poor old fellow? Running up debts he has no hope of repaying?
    Is he even paying the interest, or is the debt escalating?
    Best option would be to contact the bank and see what can be done.
    And yes, a debt can be recovered from his estate.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    He can negotiate, or bankruptcy

    No other options - other than the pay it.
     
  5. smallbuyer

    smallbuyer Well-Known Member

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    Poor - seems poor no money/assets and a CC debt
    Old - i suppose thats a matter of opinion, pension age though
    Fellow - While you can never be 100% these days im pretty sure on this one :)

    I think he just makes the min repayments

    Yeah im think he (or someone on his behalf) should contact the bank, main question is the strategy to use with the bank.

    Im no fan of the credit tightening but surely its never been right to give someone on the pension/dole a 2-30k credit card.

    Never ceases to amaze me the people i see (or know) of all ages who have poor financial literacy. You should have to sit an exam to get finance ;)
     
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  6. smallbuyer

    smallbuyer Well-Known Member

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    If he goes bankrupt will they take money out of his pension?

    What sort of results have people had negotiating?
     
  7. Brady

    Brady Well-Known Member

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    I've previously heard that banks struggled to chase up unsecured debt with estates?
    Anyone shed some light on that?
    If he doesn't have anything, really what are they going to chase up?
    Should they have given him the money in the first place?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    A lender would look at what assets the estate has and then make a commercial decision. If nothing then there is no point in chasing.
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    No, a bankrupt could earn about $50k per year and not have to pay anything back
     
  10. smallbuyer

    smallbuyer Well-Known Member

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    Is he likely to have more success using a financial councilor (like from a charity?) to talk to the bank on his behalf or is he likely to get a similar result with a family member negotiating on his behalf (or doing it himself)? cheers
     
  11. The Y-man

    The Y-man Moderator Staff Member

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    I say do it himself , and take a family member. Credit providers are under the microscope at the moment, and probably would not want this to blow out into another bad news via the ombudsman's office.

    The Y-man
     
  12. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Id engage one of the free community debt counselors. They may even be able to get it written off considering he is terminally ill with no assets.
     
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  13. Shogun

    Shogun Well-Known Member

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    I have read of people making deals. To close credit card and rate is reduced to closer to 10% then the closer to 20% it probably is
     
  14. Beano

    Beano Well-Known Member

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    My friend got into the same problem with her NAB credit card .
    The end result was cancel the card and take out a personal loan.
    Interest rate was halved.
     
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  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    If an elderly person has no assets they should seek some advice on just not making any payments any further. There would be no point really as the worse that could happen is bankruptcy which is essentially meaningless as it will have no effect unless they want to go overseas perhaps.
     
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