I'm probably going to ramble on, but appreciate the few who read it all the way through...
So, my wife informs me that her MIL (mother in law) has racked up about 20K in CC debt over the years. Basically, she lives paycheck to paycheck. On good months she can pay her bills and put some toward her CC debt, but on bad months (home/car repairs, doctor's visits, other unexpected expenses, etc) she has to use the CC to get by. Unfortunately, her house is around 30+ years old and stuff is breaking left/right. Her car was the same way until we gave her my old car. She's in her 60s and looking to retire soon due to health reasons.
All that said, there's no realistic way for her to "grow" out of the debt. She's a widow with no other income. She hasn't had a raise in 10 years working for the county. She's too old to go back to school or develop a skill. Let's face it - no one would hire her anyway. Honestly her body only has a few years left in it.
The good thing is that she has been able to service the debt (make the minimum due and maybe a little over). Her credit score is supposedly good (700s). She also has a pension. When she does finally retire and collect on her pension & social security she may be able to squeak out more than she actually makes now.
The other good thing (and bad depending on how you look at it) is she already lives very frugally. No car payment. She NEVER goes out to eat and when she does we pay for it. We pay her cell phone bill. Her few "luxuries" are basic cable (probably $50) and one pack of off-brand cigarettes a week. She doesn't drink. I guess my point is there isn't A LOT to cut out.
She consolidated her debt a couple of years ago and got a lower rate (not sure exactly how low - will find out soon). She also refinanced her mortgage too around that same time or before.
***So, what are good options at this point?
1. Ask the creditor to lower the balance or interest rate. I've heard stories of people calling their creditor and just asking to lower their outstanding debt. In my head this makes sense because if the debtor files for bankruptcy then the creditor loses anyway. Plus, I've heard that these companies sometimes buy debt for a lot lower than what is owed. Anybody done this? Any negative repercussions to doing it? Can I call on her behalf and do it? -I'm not a master negotiator but I can press people harder/more respectfully than she can.
2. Bankrupty I would hate to see her ruin her credit so I'm not a fan of this, but maybe for her this would be an okay option.
I know very little specifics at this point, but just wanted to get the ball rolling here with some input from you guys. Thanks in advance.