Could bankruptcy be the solution to my debt worries?

2 April 2012


My mother is 73 and has around £10,000 of debt on high-rate credit cards. She no longer works and, although she helps out with our son, we cannot give her any money as I am unemployed and my husband earns just enough for us to get by, even with tax credits and child benefit. My mother uses her entire pension to repay her credit cards, but can still only meet the minimum repayments. As she has no other money after making these payments she is getting into more debt by the day.I wondered if she should go bankrupt as the stress is making her ill, but she is scared that would result in her losing her car, which is her only freedom. Please help.


Dealing with debts at any age is a daunting experience, but this is especially true for older people who are increasingly finding themselves with high levels of debt in retirement.

The stress that people in your mother’s situation are under can be extremely detrimental to health and wellbeing, and I strongly recommend seeking financial advice.

The fact your mother is having to use her pension to meet the minimum repayments on her credit cards is a clear warning sign that she is in serious trouble. But, if your mother petitions for bankruptcy it could have an impact on her pension.

While state pension payments would not be affected, payments from other private pensions might be taken to repay her debts for the duration of the bankruptcy (normally 12 months).

Bankruptcy is far from the only option available to your mother. One much better option would be equity release if your mother owns her own home. In that scenario your mother would raise money against the value of her home in order to pay off her debts. The best solution for your mother will depend on her specific circumstances.

You can seek further help from charities such as Consumer Credit Counselling Service, which has a free debt helpline on 0800 138 1111 or call the National Debtline for free on 0808 808 4000 or visit its website,