Stewarts’ Legal Service team recently assisted the family of a patient who lost capacity and discovered outstanding debt totalling over £50,000 in her name. The patient’s family was eager to address her financial situation as soon as possible so that everyone could focus on her ongoing treatment and wellbeing. However, due to the large number of creditors and the lack of information they held about her accounts and debts, they didn’t know where to start. Our Legal Service team helped to regain control of her finances by closing accounts and making settlement agreements with creditors. This has allowed the patient and her family to move forward and plan for the future.

When someone sustains a serious and life-changing injury or illness, it is often an extremely difficult and stressful time for both them and their family. This situation is often exacerbated when families are required to address practical issues that persist due to the person having lost capacity to manage these themselves. One area that can be particularly onerous and time-consuming is addressing someone’s finances. The issues involved can range from having to notify banks of the change in circumstances to dealing with debt on their behalf. Creditors can often be slow to respond and hard to contact. It is easy to lose track of what is happening, particularly when you are dealing with many creditors at one time and have many other things on your plate.

Case study

Stewarts initially met the daughter of this patient in September 2019. The patient had sadly acquired a brain infection, which over time had resulted in number of cognitive impairments. The doctors at the hospital confirmed that she now lacked the mental capacity to manage her financial affairs and that it was unlikely she would regain this in the future.

At our meeting, the patient’s daughter informed us that in the past, when her mother still had capacity they had made the sensible decision to execute a lasting power of attorney (LPA), which appointed the daughter to manage her mother’s property and financial affairs on her behalf.

We have outlined previously how LPA’s can be an incredibly useful tool to have in place to allow other people to manage your affairs. Unfortunately, many families are left in a difficult situation when an LPA has not been executed as the only option once capacity is lost is to take the more costly and time-consuming route of making an application to the Court of Protection. LPAs are particularly useful when you are helping to manage someone’s finances as the implementation of stricter data protection regulations in recent years has made it nearly impossible to speak to banks without evidence of some form of legal authority.

Getting into debt

As attorney, the daughter had taken over management of her mother’s finances now she had lost capacity. She soon realised that her mother was in substantial debt with payments outstanding on approximately 15 credit cards. Unfortunately, it transpired that her mother had been a victim of online fraud, which had resulted in her debt spiralling out of her control. While she had been able to contact the banks in her capacity as an attorney to ask that they freeze the accounts, she did not know what to do next. Her mother had some limited savings, but as she was unlikely to be able to return to work, it was important that she had some money set aside for the future and her ongoing care costs.

Managing debt

Facing an uphill struggle and the onerous task of contacting many different creditors, the daughter decided to contact Stewarts to see if we could assist her with this so that she could focus on supporting her mother at this difficult time. With the assistance of her daughter, we started sorting through the letters she had received from creditors and creating a record of the outstanding accounts to get a clear view of the financial situation. Arguably the most important step where a patient has lost capacity is to contact creditors and establish authority to speak to them about the account. In this instance, this was done by providing them with a copy of her LPA document and the attorney’s signed authority.

How we can help

For our pro bono clients who have sustained serious injury or illness, an essential step is to provide clear and up-to-date medical evidence to support our write off requests to creditors. Doctors will often kindly provide us with a ‘to whom it may concern letter’ to confirm the patient’s condition and stay in hospital. It ensures that creditors take the request seriously and usually elicits a quicker response. In most situations, it will result in the account being transferred to a specialist support branch who have experience dealing with customers who are vulnerable and find themselves in difficult situations.

To date, through persistently writing to and calling creditors, we have successfully had £44,125 of debt set aside for this patient by over 10 creditors. With settlements and requests pending from a final few creditors, her daughter has finally been able to focus on moving forwards with the knowledge that her affairs are in order and is able to start planning for the future.

Client’s comments

When asked how the Legal Service had helped her and her mother, the patient’s daughter said:

“When my mother became unwell, and I had to take care of her finances, I felt quite overwhelmed when I found the accounts to be in disarray, months behind in bills and discovered large debts. Emily at Stewarts has helped me take control of the situation, contacting creditors on my behalf and keeping meticulous records. Her communication has been faultless, keeping me informed at all times and often prompting me when I forget to return documents to her. I feel incredibly grateful for all the help I have been given, not only reducing the pressure off me but also assisting me to achieve the best possible financial outcome, given our situation.”

This article was written by our  Paralegal Emily Charlesworth.