tricky financial situation - feel bad that mum is involved.

[cookerlooker]

Morning,

Please be gentle as I am really stressing over this.

in 2021 I found myself in a very difficult financial position. I had a lot of debt and was looking at paying very high interest rates with no options of 0% of low interest cards etc. In hindsight I should have just contacted a debt charity such as stepchange and entered into a debt management plan. I think a mixture of pride and not wanting to totally destroy my credit file prevented me from doing this.
I am very close to my mum and she offered to help me out by taking out a loan at a low rate and also 3X credit cards with 0% offers - this was a massive relief and solved the problem short term. I make all of the payments so it's never cost mum a penny. She lives mortgage free and with no other debts of her own and therefore had a good credit rating. We have moved the cards around a couple of times, all in her name an the debt has reduced.

Fast forward to now and my circumstances have taken a bit of a downturn again and I am unable to work at the same level. This has impacted my income and I am struggling to maintain the loan and card payments. Nothing has been missed but I am robbing Peter to pay paul. We have spoken to the credit card/loan companies and they are willing to offer interest free reduced payment plans, however this will obviously impact on mum's credit file and reduce her ability to borrow in the future. I feel awful about this.

Mum's view is that she is 75 with no interest in taking on any additional borrowing, and therefore I should opt for the reduced payment plans as her credit file is largely irrelevant to her.

WWYD?

At 75 many companies would not be happy lending her significant money anyway.

As she owns her own home and is unlikely to need big loans in the future, and she is also happy to take the hit to her credit file I would let her.

How did she take out credit cards for you to transfer your credit card debts to?I am a bit confused by that.
As for her credit taking a battering if she isn't bothered and is unlikely to need credit then its not too much of a problem but bank accounts and mobile phone contracts etc could be affected too so as long as she clealry understands that

I agree, from what you have said I would opt for the reduced payment plan and (with your mother’s full knowledge and agreement) let your mother’s credit file take the hit.

However, it is concerning that it has been 3 years since you consolidated the debt and you haven’t paid it off yet, I would have thought this situation (needing your mother to take out loans for you) would have been embarrassing, worry you as to how close you came to going bankrupt or on a DMP and a real wake up call to you, and that you would have been budgeting, taking on extra work and throwing everything you can at the 4 debts (1 loan and 3 credit cards). I also would have thought that at least one would have been paid off in full by now, as I would have expected you to feel so concerned that your debt was in your mother’s name, and that you would want to do everything possible to remove her exposure to your mistakes ASAP.

I’m concerned that you actually have a problem managing money, and that doing this, will be another short term fix, and that in (say) 2025 you’ll be saying again that your financial circumstances have taken another downward turn and you now can’t make the reduced payments/pay anything etc.

So that makes me pause before recommending this. As it really depends on the kind of person you are, and if you have woken up to your financial position and responsibilities, which isn’t clear from your post.

I think this over reliance on your Mum whilst not reducing the debt and shuffling credit cards around is the most concerning thing. You say that 'you are unable to work at the same level' So I assume you have taken a pay cut? You need some proper debit advice and take your Mum out of the picture.

Why don't you contact stepchange now as your circumstances have changed?

I can understand why your mother took out a loan on your behalf but three credit cards???

And how do you move credit card debt from a card in one persons name to a card in another persons name?
I din't know that was possible

HI, Apologies for the delay in replying - I have been in bed for the last 24ish hours with a raging fever :(

Here is a little context - I split from my long term partner a few years ago and found myself struggling to manage the bills and debt payments that we have built up - all in my name. He went AWOL and I have never received a penny of support from him.

My mental health spiralled and I was struggling to keep everything going - mum helped by allowing me to use her low interest offers. I have always paid the monthly payments so mum has not been out of pocket.

18 months ago I was in a serious accident and I am still dealing with the repercussions of this, meaning that I can't work at the same level or earn the same amount of money.

It's a rubbish situation and one that I am ashamed of. I just need to work out how to move forwards.

In terms of how mum was able to do this - the loan was paid into her bank and then she sent it to me. Two of the cards allowed her to balance transfer a balance from my card, and the other card had a 0% money transfer option.

She doesn’t need to borrow in the future. Let her credit take a hit. She’s ok with it and you need the help.

This is your problem to solve and not hers. If you can't do physical work because of the accident then you need to take on additional work that you can do from home. You have no idea what the future holds for your mum either. She might suddenly have a huge house repair to do and might need a loan herself.

I agree. You need to find a way of repaying your Mum and not getting her into further trouble. You absolutely shouldn't have allowed her to take over your debts by using credit cards.

Listen to your mum

I think some replies are a wee bit harsh. I don't get the sense that you are being entitled or want to take advantage of your mum. I know I'd do this for my children in a heartbeat if they'd been through what you have and I could do it to help them out.

I don’t think you should let your mother damage her credit. She still might need to use it for something essential like a major home repair.

She can’t not. She can’t pay it back and the debt is now in her mums name.