My daughter has applied to a debt management company?

Question

I am pleased that she is taking action to resolve her difficulties but feel I have let her down badly - I thought she would have known better than to get into such serious debt. This means for five years she will not be able to get a mortgage - she will be 28 before she can even apply - would it be better if I got out a loan and helped her out - I could not afford to do it for both my daughters though - the other one is very sensible with money so I feel that I would be letting her down too by seeming to favour the other

Answer 1

I'm answering this from your daughters perspective, I have been there, and my mum didn't help me out at all, she let me make the mistakes, and then let me sort them out on my own. Although you think it's 5 years and then everything is fine...it's not. Debt management in itself, is forcing those who are owed money to accept less each month than they would normally require...it is legal, but that's not to say it doesn't affect your credit history, because it does...BADLY. Her credit file will be marked down badly each month for 5 years, and although you assume it will then magically go back to perfect credit, it won't...it will stay bad, and finance companies will not touch her.

It has been 7 years now since I went through the debt management process, and I am still unable to get even the simplest credit...a mobile phone contract for example. I have a mortgage with my partner, but we had to use a company who takes less than perfect credit, and my parents had to lend me £28,000 as a deposit on my behalf, because no creditor would touch me without such a hefty deposit. Things will start to get better now I'm paying on a mortgage, but I can't ever see myself having a credit card, cheque book or anything "normal".

I wish my mum would've paid off all my debts at the time. My life would've been easier...BUT, I may not have learnt my lesson, because I wouldn't have had to struggle...who's to say I wouldn't have got into debt again and again?? At least now I know I can't do it, because there's no one out there to give me the credit in the first place!

Answer 2

Just a warning about debt management companies - some of them take a percentage of what you owe as a fee, so this can make your debt problems even worse!

You can approach your creditors yourself and offer to make a reduced settlement or pay the money back over a longer period of time. This might work out cheaper than going through a debt management company.

Answer 3

You know what they say: 'You don't solve money problems with money'! It's true - she needs to learn to change the behaviours that landed her in this mess, and she will have no incentive to do this if she gets a quick fix from you.
You might be better off spending some money on getting a financial advisor or accountant to draw her up some sample budgets based on her income and debt repayment plan to teach her what she can really afford (or NOT afford!).
Good luck - hopefully she will learn from this and change her spending habits so that she never runs into debt again!

Answer 4

What a tough question, I would let her learn her own lessons personally but obviously its not my child so its easier said than done

What about pay some off via a loan and leave her to keep up the repayments on the outstanding debts, her credit rating is probably already in a mess if she has missed payments to be honest..............

Look on Experian to see if it is worth salvaging first, because the missed payments will show for a few years

Answer 5

Firstly let your daughter tend to her own mistakes, she has to learn..tell her to go the Citizens Advice Bureau or phone National Debt Line it's FREE!!! and they will do the same service..debt management company are blood suckers and ambulance chasers. I need to know which part of the country you live in as Scotland has a differing system, ie; more rights.

Hope this helps.

Answer 6

Absolutely not. Your Daughter got herself where she is all by herself and she is doing the right thing by trying to get her debt under control. If you interfere now you will be doing her a great injustice. Let her stand on her own and she will never forget it.

Answer 7

Dont bail your Daughter out, I understand you want to help but like me your daughter must learn from her mistakes, she'll sort herself and be stronger for it.

I think banks / credit card companys need to be monitored by the FSA and have tighter controls put on their lending, to many young people are having these problems.

Answer 8

There comes a time in life when your kids have to stand on their own two feet and not expect mum to bail them out.I think your daughter is about 23 now then..She really needs to sort this mess out herself is my opinion.

Answer 9

Thats just tough love. She needs to learn how to properly manage her money. You will not always be there to bail her out of trouble

Answer 10

Everybody has to learn that lesson the hard way. Nothing you could have done to stop it.