Everyone has a debt at one point or another in their lives, whether these relate to mortgage or service charge payments, credit cards, or car repayments. Falling behind with payments is stressful and may affect the quality of care you can provide. This is 258 particularly true in cases where the protected person is a child and it is the parent who fell into debt. How can the Deputy help?
Settlement of debts is best made through the gifting of a lump sum from the protected person’s funds in order to ensure that debts are paid in full. This gift takes the form of an interest-free loan to be repaid into the minor’s funds over a period of time. The Court of Protection normally gives the Deputy authority to make small pecuniary gifts. However, large gifts and interest free loans must have Court approval. When considering making an application to the Court, the Deputy must first decide if the gift or loan is in the Protected Party’s best interest.
When considering a gift to a parent, the Deputy will want to first take into account the protected party’s needs. It is a prerequisite that those needs must be met. Applications to the court must demonstrate that the yearly budget can sustain the proposed plan.
The Court will then consider the Protected Party’s wishes or assumed wishes. The Court will assume that normally most children will want to help their parents. This is especially so if they are caring for the child. However, the decision is not simply what the child would have wanted; the Court will consider wider factors, including the parent’s circumstances and how the debt arose.
The Court will look at the reasons why the parents went into debt and whether this is likely to reoccur, as well as the effect these debts have on the care provided to the child. Parents may have to agree to debt management sessions and repayments plans, if their debts are widespread and the loan is only part of the proposed arrangement. The Court will need also need evidence that the parent will takes steps to avoid future liabilities.
While at times paying off all debts seems like an impossible task, particularly while caring for a disabled child, our experienced Court of Protection solicitors are available to guide you through the application process and support you with financial advice.