what to do about parent's finances

Discussion in 'Credit Talk' started by chilly17, Feb 21, 2004.

  1. chilly17

    chilly17 New Member

    First-ever post, I appreciate any input. Just got off the phone with my parents, both in their 70's, my dad works part-time and they get social security. Basically make enough to pay their mortgage, car payments, and get by. They have racked up nearly $20K in credit card debt: $9K AOL credit card (BankOne), $5K BofA card, $500 Household, $500 Texaco, $3k on a Sam's Club Visa, $1200 on another cc. All cards, predictably, at about 20% interest with substantial monthly late and overlimit fees.

    I am not sure how to proceed. I'm loathe to just co-sign a loan or give them money outright as I doubt they are going to substantially change their lifestyle (new furniture, change cars approx. once per year). My mom says she can pay $1k per month to these bills. At their age, it seems like BK might be a reasonable alternative. I think maybe calling the creditors with the threat of BK and asking them to settle for smaller amounts (ie remove late fees and overlimit fees) and paying now is an option. Any other suggestions? Most of the threads here deal with the problems for younger people, curious to see if anyone has experience with this scenario. Thanks for your help.
     
  2. cinderella

    cinderella Well-Known Member

    Hi Chilly,

    Your parents sound better than mine.......wanna switch? LOL

    I wouldn't consider co-signing for your parents unless they have substantial equity in their home that would not be protected in BK, should your peeps be forced to seek BK protection.

    Should your parents creditors obtain judgments against them, they would not be able to attach their social security. If they attempted to go after their home with the judgment, it would likely be protected with a BK. But these laws vary from state to state, so a BK attorney would best be able to advise you on how much equity would be shielded from the creditors.

    Personally, I wouldn't consider BK until judgments started happening, if they ever do. You said your parents make enough to pay their mortgage and I'm assuming buy their life necessities, so don't worry about it too much. If you had to, you could always have them file BK.

    DH and I have been taking care of his parents, mostly dad for about 4 years. Dad is much older than us, 80, dh was adopted. My grandma, who is 79, is nothing like my dh's dad. Dad gambled everything away, including all his retirement. Most people/relatives tell us to declare him incompetent. I could never do that. I think it would break my dh's heart to do that to his dad. Although he is crazy. Currently he wants us to loan him about $10k to open a day-trading stock account.......he had his 3rd heart-attack last year and he wants to trade stocks, very stessful, when he can't even afford his mortgage payment!

    HTH
     
  3. chilly17

    chilly17 New Member

    Thanks. Anybody else?
     

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