Adult daughter and financial mess

[NK346f2849X127d8bca260]

Adult daughter moved back home several months ago after long term relationship breakdown.
I now becoming aware of her financial state!
She is in a low paid job about £14k with no real hope of earning more but is regularly working a lot of overtime.
She has credit card debt of £15k plus a
Littlewoods catalogue account
There is also a everyday loan account that her ex said he would continue paying.
What really concerns me is the loan, I googled them and was shocked at the interest rates! I advised her to request statements from them as it is in joint names but she said the lender won't send out any but they had put a note on file to contact her if her ex misses payment.
I also wonder if there is more! She gives us nominal rent to cover all her meals,has no outgoings apart from her payments to the CC and the catalogue, she hardly goes out and doesn't appear to buy anything.
She also went to her bank, but they refused a consolidation loan as her credit score is poor.
Although we are a financially stable we have younger dependent children and can't afford to help pay them off and then get her to pay it back to us.

Is she paying off her debts other than the one her ex is paying? For the credit card, if she changes from direct debit to standing order it will be paid off much quicker.

For example if her minimum payment is 200 this month and she pays 200 every month then each payment clears more of the debt so the interest added reduces every month.

I know it's more expensive than a bank loan but it will improve her credit score over time. Then she can apply again once the debts are reduced.

And of course she needs to stop using the credit card so the debt doesn't increase.

I can't remember what catalogues do re interest, sorry.

She can contact a debt management charity to help make payments manageable, stepchange are very good.

Of course she needs to understand that from now on any credit is a big no!

Good luck, I hope she gets it sorted.

Looking at the £15k plus figure you mentioned and her income, may I suggest that your daughter visits the local Citizens Advice Bureau, and goes through her all her debts, discusses her income, and thinks about the possibility of a Debt Relief Order - as she will not only get debt relief over 1-year, but I think have the whole lot written off after.

"A debt relief order (DRO) is one way to deal with your debts if you don’t own your own home, don’t have much spare income, and your debts are £20,000 or less. Some types of debt don’t count towards this limit, so check whether you're eligible before you decide."

Please don't get her hopes up, as I'm not sure of the credit rating consequences afterwards which may not suit her future needs, but if like I found several years back that debts were controlling her life, it really is worth looking into. IMO

P.S. I cut and pasted the above quote from a CAB website, so as a lot more there, so may I suggest that you have a read and make a more informed discussion with your daughter, than rely on my scribble.

Good luck.

A DRO is likely to kill her chances of credit stone dead for a few years, which is good in a way that she will be forced to learn to budget and live without credit, but could also be bad in terms of her future mortgage/rental prospects.

If she is living with you OP for a while she has a good chance of sorting herself out while she has low outgoings and perhaps even starting to save up to be able to afford to move out.

Do you know if it is her or her ex who is bad with money? Has she run up the debts herself or has it been his overspending? If she doesn't go out or appear to spend anything, it could be that she is actually sensible with money and it's him that's run up the debts in her name or encouraged her to take them out for him?

He was a very controlling boyfriend several years older than her. Apparently on asking he has no debt in his name apart from the loan that is joint...it is one of those lenders charging extortionate interest to people who can't get credit. Her CC are high interest too although they are with more reputable companies, she said he couldn't get a credit card because of his credit score. The loan worries me as although joint she has no idea how long is left on it, she rang the company who said they can't send statements. Her ex said he would finish paying it off but given his record I am suspicious of him.
Her staying here long term is an issue, we are really cramped and it is incredibly stressful particularly as she is rude and stroppy particularly with me, she hardly lifts a finger to help out either.
I really don't think the spending on the CC is all hers as she isn't fashion conscious, doesn't have a car etc.

I really think there is also something deeper, she seems to lie an awful lot!

NK

As mentioned above, the DRO has its drawbacks, but looking at the situation your daughters problems (and attitude) its putting you in, it may be a good idea to at least consult the CAB, as her application should 'draw out' the truth - as while she might tell porkies to you, if she thinks she will get both protection for a years and then write it all off - her opening up to a consultation should both force the lenders to provide statements, and maybe, give your daughter other options she may not think she has.

FYI with no car to affect her 'asset' column, that is another plus SHOULD a DRO be an option, as by the sound of it, your daughters credit rating is already shot to pieces.

Meh.

I earned 14k in my first job and I had a £2k overdraft, a £25k loan for graduate school, govt student loans £2k on credit cards.

She just has to pay it off as much as she can. She got herself in she can get herself out.

Niki I agree with you there, I live within my means, DH has even suggested we get a bank loan and pay it off for her and get her to pay us back, I am completely against that as it would mean we would have to cut back on our outgoings and as you said it is her mess.Obviously us disagreeing on that is another stress!
She has admitted to a £2k debt on a catalogue this afternoon as well.

If I only owed £17k back then I would have been on easy street.

All my debt was for education though.

Presumably she can afford the repayments? If she can afford the repayments then she just keeps paying it off. It's only an issue if she defaults.

Yes she is paying them all on time and at a higher than minimum payment level and she is doing a lot of overtime to do that, but the CC are a higher interest than somebody with a good credit score will get. So it will be many years before she can pay them back that way. I am hoping if her credit score improves in the future that the bank will grant a loan at a lower interest rate than the CC.

Can she get a credit card with a 0% offer?

thea after becoming aware of more debt, I am going to strongly encourage her to visit the CAB with me in tow.
Although I will be surprised if she does as I am really beginning to wonder what has been going on and am suspicious of what else she is hiding.

Niki I would be suprised if she could get one to be honest, I know she tried a few months back but wasn't successful.

NK

'In tow' is a good idea, but if that makes the difference between her going or not, IMO ease back as the CAB by laying out before her the debts, her income, the service costs, could open her eyes that it can't go on - especially if affecting her daily life, and see any options before her in a more urgent light - as not going to get better anytime soon, even if paying a bit over the Minimum.

P.S. Keep trying for credit and getting knocked back, usually lowers a credit rating.

If it can be proved that she was financially abused then she may be able to get the CAB (or other debt charity. Look at the money advice service website ) to write off the debt