Submitted by honeyoatgirl t3_yxwexz in personalfinance
I’m not sure if this is allowed. I hope that it is, because everyone seems informative here.
My 80-something year old parents are having a really rough time right now and not sure what to do. I apologize if the post is too long. I’ll try and make this as short as possible.
The situation:
83 and 84 year old parents $51,888 in debt (all credit cards and one loan for a water heater) No savings No life insurance Paid off house but has reverse mortgage (that they can’t pull from anymore for a lump sum)
My parents regular bills are around $6300 a month. This is their prescriptions, insurance, utilities for their home, internet, groceries and car payment. Oh, and their debt.
Their income is $5200 a month. That’s social security, one retirement (other one doesn’t get retirement) and payment from their reverse mortgage.
Their credit score is done. It’s shot. Frankly, they’re not concerned about it anymore. They can’t pay all of their bills anymore because their DTI is too high. A couple of us kids have taken over their small car payment each month and thrown cash their way - but after several months of doing this, they’ve gotten nowhere. Their payments all seem to go toward interest. Pay $300 on your discover card? Cool, $60 of that goes toward principal. TL;DR? They’re getting nowhere.
I’ve called my bank to see if they have any advice and I’m pretty much told (credit union) that if I wanted advice about this that I’d have to sign up for financial counseling for my husband and myself, not a family member. And we don’t need that. The guy I spoke to and the other person both said we wouldn’t even be accepted given that we are more than financially set. 😩
What can we do? Debt consolidation doesn’t seem to be an option. Especially because their credit score is done. A lot of the payments they’d be looking at are right around what they pay now, so there doesn’t seem to be a point. There also seems to be a lot of fees on that. They called some place called MMI(?) and my father sent me the spreadsheet that the guy working there sent. They’d be paying about $18,000 in fees. No thanks.
What else can be done? There are three of us children. One of us (brother) cannot afford to help at all and is struggling greatly. My husband and I are taking care of their car payment and giving money when needed but can’t keep it up in this economy. And my sister sends $200 a month which is her threshold.
Side note - we offered the suggestion of bankruptcy but found they can’t do this with a reverse mortgage.
Thank you in advance. Apologies for such a long post.
EDITED TO ADD BREAKDOWN FOR THOSE ASKING:
Discover card - $880/month
AMEX - $672/month
Line of credit - $224/month
Loan they have (ally) - $1094/month
Sears - $466/month
Bank of America credit card - $420/month
Second Bank of America credit card - $861.00
Internet - $65
Car payment - $185
Car insurance - $88
Groceries - $300/month
Insurance for mom - $285.00
Insurance for dad - $292.00
Prescriptions monthly - $230
Gas - $35/month
HOA: $12/month
Personal property taxes - $84/month (they pay quarterly)
Total - $6193
As you can see, their utilities aren’t even listed here. The money my sister sends and I send on top of their car payment covers this.