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I want to find a way to help my mid-70s brother who has $50K+ in credit card debt. He is a widower who understands he has emotional issues that caused this mess. He told me that he sought help at the county credit counseling agency, but they were unable to help because of insufficient income to cover payments -- after consolidation I guess. He also tried to obtain a reverse mortgage, but his house is not in good enough shape. I'm working with him on the house as I am able, but wanted to reach out for any suggestions that would help work toward a solution. He will reach out to each creditor to obtain a figure they would settle for. What are his options?... does he even have any options? Thank you in advance for any advice.
I want to find a way to help my mid-70s brother who has $50K+ in credit card debt. He is a widower who understands he has emotional issues that caused this mess. He told me that he sought help at the county credit counseling agency, but they were unable to help because of insufficient income to cover payments -- after consolidation I guess. He also tried to obtain a reverse mortgage, but his house is not in good enough shape. I'm working with him on the house as I am able, but wanted to reach out for any suggestions that would help work toward a solution. He will reach out to each creditor to obtain a figure they would settle for. What are his options?... does he even have any options? Thank you in advance for any advice.
Been there done that with my dad and his wife. They had $50k+ as well. File for bankruptcy. It will cost between 2k and 4k and the debt will be erased. They (dad) contacted me after going through a credit repairing agency to try to pay it off. Living on SS that combined equaled less than $1800 a month their path to paying it off was never going to be there. My first act was to cut the credit cards up. Second was to fire the agency. Third was to call a lawyer. Done. Car and home saved. Credit card debt gone. I feel bad for those companies a little but honestly they knew what they were getting into when the allowed the card to be used. I have a little sympathy but not much.
Been there done that with my dad and his wife. They had $50k+ as well. File for bankruptcy. It will cost between 2k and 4k and the debt will be erased. They (dad) contacted me after going through a credit repairing agency to try to pay it off. Living on SS that combined equaled less than $1800 a month their path to paying it off was never going to be there. My first act was to cut the credit cards up. Second was to fire the agency. Third was to call a lawyer. Done. Car and home saved. Credit card debt gone. I feel bad for those companies a little but honestly they knew what they were getting into when the allowed the card to be used. I have a little sympathy but not much.
This looks like the plan. But for the life of me I will never understand how anyone can keep their possessions when they file for bankruptcy, that hardly sounds fair to the creditors.
This looks like the plan. But for the life of me I will never understand how anyone can keep their possessions when they file for bankruptcy, that hardly sounds fair to the creditors.
The creditors make up much of it in tax savings as write offs and losses. Creditors know it's a chance they take in order to charge large interest rates on most credit cards. I wouldn't lose sleep worrying about the creditors that hold these cards.
I want to find a way to help my mid-70s brother who has $50K+ in credit card debt. He is a widower who understands he has emotional issues that caused this mess. He told me that he sought help at the county credit counseling agency, but they were unable to help because of insufficient income to cover payments -- after consolidation I guess. He also tried to obtain a reverse mortgage, but his house is not in good enough shape. I'm working with him on the house as I am able, but wanted to reach out for any suggestions that would help work toward a solution. He will reach out to each creditor to obtain a figure they would settle for. What are his options?... does he even have any options? Thank you in advance for any advice.
Been there, done that, too. I sold my house and used the equity to make payments to CCCS, which barely made a dent in my debt, leaving me with no recourse but to file for bankruptcy. Your brother should do the same. There is no shame in this.
Well, I was going to suggest that he try to go back to work. Even doing odd jobs for cash around his neighborhood would help. Plus sell everything that he does not need. And, maybe getting money from relatives to help out.
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But, I suppose that if he is in his middle 70s, a bankruptcy on his record would not hurt too much.
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I know someone who would go on extravagant vacations, buy designer clothes, eat at expensive restaurants, go to expensive concerts, and run up huge, huge credit card bills (well over $100,000) and then just file for bankruptcy. I believe that she did this twice, maybe even three times, in her 20s & 30s.
She said that people who just spent their own money were stupid and planned her extravagant expenses so that they could be erased by bankruptcy. She would call people who actually repaid their debts "chumps". It did not seem to hurt her career wise or when she bought a house or when she married a wealthy man.
Last edited by germaine2626; 11-05-2016 at 09:10 AM..
I would caution against the Reverse Mortgage course. The Deck is stacked against you from the start -- You'll spend good money updating the house, and the results are almost pre-determined. The Lender in these cases is looking for a low-ball Appraisal. The same Loan Officer that screamed bloody murder over the low faulty Appraisal last week......will howl at a true Market Value assessment in this case.
Bankruptcy is a valid option. The Credit Card companies send "Pre-Approved" credit cards to random addresses, counting on the recipient to sign it and use it. The minimum payment puts them into the high interest pool and that just compounds the problem. The borrower will never get caught up with the interest.
This looks like the plan. But for the life of me I will never understand how anyone can keep their possessions when they file for bankruptcy, that hardly sounds fair to the creditors.
I want to find a way to help my mid-70s brother who has $50K+ in credit card debt. He is a widower who understands he has emotional issues that caused this mess. He told me that he sought help at the county credit counseling agency, but they were unable to help because of insufficient income to cover payments -- after consolidation I guess. He also tried to obtain a reverse mortgage, but his house is not in good enough shape. I'm working with him on the house as I am able, but wanted to reach out for any suggestions that would help work toward a solution. He will reach out to each creditor to obtain a figure they would settle for. What are his options?... does he even have any options? Thank you in advance for any advice.
Others have suggested bankruptcy here and that indeed may be the best option. In fact, it may be the only option.
Its worth knowing a little about bankruptcy. A Chapter 7 is a straight liquidation and will wipe out most debt--most particularly unsecured credit card debt. The difficulty is if one owns a home or other real property with a mortgage Mortgage holders are secured creditors under the law and it is difficult to eliminate this debt. Oftentimes, a Chapter 13 bankruptcy will work for someone like this. However, a 13 requires monthly payments into a plan that is devised by the bankruptcy court. Because of the work involved, a lawyer will typically charge more for a 13 than he will for a 7.
There are other issues that affect the decision to file bankruptcy that are important. The federal bankruptcy code allows states to establish "exemptions for debtors". These exemptions allow debtors to go through bankruptcy and keep certain types of property. Every state I am aware of has a "homestead exemption" which allows a homeowner to keep a certain amount of dollar equity in their home. If your brother does not have a mortgage even with a home is disrepair this could be substantial.
The best thing your brother could do is talk to a qualified bankruptcy attorney in his area. Don't delay. He needs education on what his rights and responsibilities are if he files bankruptcy.
People file bankruptcy for many reasons. Poor financial planning, illness, unemployment, or disability are the major reasons. No one should be judgmental about it. The laws are what they are.
Been there, done that, too. I sold my house and used the equity to make payments to CCCS, which barely made a dent in my debt, leaving me with no recourse but to file for bankruptcy. Your brother should do the same. There is no shame in this.
Maybe that is a big part of the problem, there not being shame in doing it. No one forces a person to run up credit card debt.
I guess I am old school and believe in paying off debt.
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