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    Thread: Tryng to help my MIL get out of CC Debt - advice needed

    1. 10-10-2017 01:22 AM #1
      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.

      3. ?

      ---

      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.
      Last edited by Brett92; 10-10-2017 at 01:29 AM.

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    3. 10-11-2017 11:59 PM #2
      Could she possibly move in with you? It seems as if you are in somewhat of a situation to help her out. She could sell her place, maybe use the equity to pay off some of the debt and maybe help out with your bills as they would increase with another adult.

      Good luck with calling the creditor and decreasing the amount. Ive tried doing that in the past and its next to impossible. Hell, Im going through crap with Frontier Communications on money i dont even owe! I believe she would have to put you as an authorized person on the account(s) , but I may be wrong... They are going to see that she has a stellar credit rating and that she wouldnt be willing to give that up for a few $$$. They wont budge. Now, if she had been having trouble making payments in the past, had a crappy score, on the brink of losing everything, they may work with you. Even then, I wouldnt hold my breath.

    4. Senior Member dunhamjr's Avatar
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      10-16-2017 02:15 PM #3
      Quote Originally Posted by Brett92 View Post
      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.

      3. ?

      ---
      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.
      1. the creditor thing could work, but as nibs mentioned if her payments are in good standing and her credit score is good... they are not likely to forgiven any balance. good credit might work in your favor though to get the CC debt swapped into a lower rate CC, personal loan, or even a home equity loan.

      2. imo this is an absolute last resort option and $20k isnt such a huge amount that i would consider this

      about the house. you said its old. does she at least have some equity?
      also since she is old and the house is needing more and more attention, are you going to take care of the house? if not maybe its time to sell and get an apartment.

      frugal living is great. and she sounds pretty minimal, but if that is the case how did the CC debt get to $20k?
      that money is getting spent somehow, unless she really is at such a low income ANY house/car repairs just push her further into debt... IMO, if that is the case, then she has to find more spending to cut. there has to be something there, and its likely the house itself.

      to really know the monthly spending you will need to get her details. IMO, this is going to be 'great fun' if she isnt onboard though. sounds she has been rolling this debt for a long time, so she may not be all that receptive to someone telling her what to do.

      does she really only have cable TV? no internet? because if she has both, maybe you need her to cut the cable, and get an OTA antenna. if you have streaming services, you can typically share them. if no internet, maybe you need to switch out the cable TV at $50/mo and see about an internet plan. i have seen offers as low as $20/mo. OTA, streaming, and dvds from the local library can up trim that cost.

      also look at other monthly items that can be cut that arent as obvious.
      car insurance. is there a way to shop for cheaper coverage, lower the useage levels to allow for a cheaper premium, or maybe even see if 'pay by mile' insurance like metromile could save some $.
      home insurance. shop this coverage as well. consider raising the deductible. doing this i dropped my home insurances costs from $2140 to $1218... not massive, but a couple hundred bucks never hurts.
      home phone. you mentioned that you pay the cell phone. does she have a home phone as well? does she really need it? we cut this for my mom and saved like $35/mo.
      medicines/prescriptions. if there are any, can they be moved to a mail-order program? these are typically cheaper then buying them locally, monthly.

      not sure if this is an option everywhere, but in WA in King Co there is a senior citizen property tax exemption. doing this for my mom cut her taxes pretty decent ($500/yr on $150k house) and locked them it at that rate (2012/2013).
      http://kingcounty.gov/depts/assessor...TaxRelief.aspx

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      10-16-2017 04:35 PM #4
      Quote Originally Posted by dunhamjr View Post
      1. the creditor thing could work, but as nibs mentioned if her payments are in good standing and her credit score is good... they are not likely to forgiven any balance. good credit might work in your favor though to get the CC debt swapped into a lower rate CC, personal loan, or even a home equity loan.

      2. imo this is an absolute last resort option and $20k isnt such a huge amount that i would consider this

      about the house. you said its old. does she at least have some equity?
      also since she is old and the house is needing more and more attention, are you going to take care of the house? if not maybe its time to sell and get an apartment.

      frugal living is great. and she sounds pretty minimal, but if that is the case how did the CC debt get to $20k?
      that money is getting spent somehow, unless she really is at such a low income ANY house/car repairs just push her further into debt... IMO, if that is the case, then she has to find more spending to cut. there has to be something there, and its likely the house itself.

      to really know the monthly spending you will need to get her details. IMO, this is going to be 'great fun' if she isnt onboard though. sounds she has been rolling this debt for a long time, so she may not be all that receptive to someone telling her what to do.

      does she really only have cable TV? no internet? because if she has both, maybe you need her to cut the cable, and get an OTA antenna. if you have streaming services, you can typically share them. if no internet, maybe you need to switch out the cable TV at $50/mo and see about an internet plan. i have seen offers as low as $20/mo. OTA, streaming, and dvds from the local library can up trim that cost.

      also look at other monthly items that can be cut that arent as obvious.
      car insurance. is there a way to shop for cheaper coverage, lower the useage levels to allow for a cheaper premium, or maybe even see if 'pay by mile' insurance like metromile could save some $.
      home insurance. shop this coverage as well. consider raising the deductible. doing this i dropped my home insurances costs from $2140 to $1218... not massive, but a couple hundred bucks never hurts.
      home phone. you mentioned that you pay the cell phone. does she have a home phone as well? does she really need it? we cut this for my mom and saved like $35/mo.
      medicines/prescriptions. if there are any, can they be moved to a mail-order program? these are typically cheaper then buying them locally, monthly.

      not sure if this is an option everywhere, but in WA in King Co there is a senior citizen property tax exemption. doing this for my mom cut her taxes pretty decent ($500/yr on $150k house) and locked them it at that rate (2012/2013).
      http://kingcounty.gov/depts/assessor...TaxRelief.aspx

      Does she own a home? Maybe sell it and mover to something smaller? You have to make other changes and make cuts somewhere.
      Current: 2015 RPGM Chevy SS Sedan 6spd - 2000 Chevy K2500 - 2013 Honda Odyssey TE
      Past: 1990 MB 300e @106k - 2011 JSW TDi 6spd @100k - 2006 Honda Accord Sedan V6 6spd @170k - 04 VW Passat W8 6spd Wagon @123k - 1996 Mazda Miata 5spd Base @257k - 2003 Jetta GLI 24v 6spd @74k - 1993 Jeep GC V8 @303k - 1991 Honda Accord LX 5spd @151k - 1993 Toyota Corolla 5spd Base @154k

    6. 11-08-2017 02:14 PM #5
      Thanks everybody for the genuinely helpful responses.

      So to address a few points and clarify:

      1. Her current after-tax income is $1400/month. She's a widow and has no roommate to share costs with. She's living in a 30+ year old house that is reaching that point where it will need lot of repairs soon (more on that below).

      2. She lives in a 1400 square foot home that if it were in good condition would be valued at maybe 80-90K. In its current condition it's probably valued at 50K. Her roof needs to be replaced at some point soon, as well as the HVAC. She has lot of other small issues too that would turn away a prospective buyer, and that's not including it being outdated cosmetically. Additionally, the house is in a neighborhood that has reverse-gentrified if that makes sense (was a good neighborhood 30 years ago, but not so much now). It's not that it's unsafe, just not in a desirable location/school zone. She did own the home at one time, but borrowed against it and has a mortgage payment again. I think it's only 3-400/month though so not bad.

      3. She only has cable - no internet or landline phone. Her smartphone (which is a hand-me-down from us) is her only link to the outside world. We pay for the smartphone service.

      4. I think the debt has just gradually accumulated over the years (10 or so). Her husband died ~20 years ago. This was an incredible hardship, but she was able to make it by and raise her 2 daughters because of the social security money. When that ran out she was month to month. Couple that with no pay raise for the last 8-10 years. Add in a Home repair here, car repair there, interest, etc. and she's on the edge. Her minimum due is around $500 a month. To reference point 1, after she services her debt, she has $900 to pay for her house, utilities, insurance, groceries, etc.

      UPDATE: She has an appointment with a respected bankruptcy attorney. She's not committed to anything - just wanted some info. Also, I'm still in the dark about a lot of this. I think she wants us involved, but then at the same does NOT want us involved. I think she's a little embarrassed by it reaching this point. As frugal as she lives, there were choices made (not recently) that hurt the situation. Had she been frugal earlier on, maybe she would be in a better spot.

      Anyway - thanks again for the non-judgemental responses. I know it can be frustrating to read about people with money problems.

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