Questions Of Cash; Hope that holiday gift was bought on plastic

Q My wife and I are retired and were given holiday vouchers worth £1,268 as a present last year from our family.

Q My wife and I are retired and were given holiday vouchers worth £1,268 as a present last year from our family.

The vouchers were issued by Brookfield Travel of Chester, which has gone into liquidation. The liquidator says we are unsecured creditors who will receive nothing and ABTA told us its guarantee applies only to booked holidays, not to unused vouchers. What can we do? JK, Tarporley.

You should speak to your family and ask them how they paid, and hope it was by credit card. If it was, then the credit-card issuer must take over responsibility for the vouchers.

But if your relatives paid by cheque or cash then, sadly, you have lost all the money they paid for you. This is heart-wrenching and illustrates the importance of paying by credit card for large-value transactions.

A spokesman for ABTA added that all its members are supposed to warn customers buying holiday vouchers that the ABTA guarantee does not apply until a holiday is booked.

Q I am a social worker working with a couple who are both ill and they have a child. The main earner may never be able to work again after a stroke.

They have credit-card debts of £50,000, which is compounding each year through interest, plus a mortgage of £42,000. All they can do is pay off the odd £5 here and there to try to keep creditors happy.

Their home is worth at least £100,000 but they are very proud of being homeowners and want to leave it to their daughter eventually.

I put them in contact with a Citizens' Advice Bureau adviser a year ago, but their situation keeps getting worse. Can you suggest what they could do? LG, by e-mail.

This story should be a warning to credit-card holders who run up large balances on the assumption they will stay in good health and in work to enable them to pay the debt off.

Nick Pearson, the national money advice co-ordinator at AdviceUK, suggests that the CAB adviser probably arranged with the credit-card bank to freeze all interest and charges, but that your client may have subsequently missed a repayment and the interest regime was consequently reinstituted.

He adds: "I imagine there are a great many debts and hence the payment schedule is difficult for the client to manage. A free debt management programme from the Credit Card Counselling Service may be the best option.

"Your clients will make one payment to CCCS every month, which will distribute it pro-rata to creditors and ask for interest to be frozen."

CCCS is a registered charity aiding people in severe debt. Details on www.cccssecure.co.uk/ew/home.htm.

If you have questions, write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk. We can reply only to letters published. Please send copies, not originals.