Help parents refinance mortgage

[bjl584]

This would be a hard no for me.
I get that I'm an outsider looking in, and it's hard to say no to family.
But, there are a lot of problems here that a refi isn't going to fix.

If you go through with it, then prepare to start making the payments.
You said you can't afford to do that, so you're sort of playing with fire here.

Others have suggested helping and coaching your parents to clean up your finances.
That would be a safer way to approach this issue, and it will keep your name off their debts.

[skives]

I’m trying to help him with his situation without him refinancing his mortgage with me on it. I don’t have the exact numbers for his credit card debt but it’s a lot. More than he can afford to pay. I’ll know exact numbers tomorrow.

What can they do besides bankruptcy to get rid of the credit card debt? Should they stop making the payments or what?

I know they are past due on their property taxes which I believe should be more important than credit card payments.

I’ll have more info tomorrow for everyone to see.

[corn18]

One thing you should not do is pay any of their bills with your money. That will just result in you being poorer and them getting right back into debt.

I thought about this a bit because I am like you. Doing nothing is not an option. My parents sacrificed a lot for us kids and I will do the same.

Move everyone under one roof (yours) and sell the house. Use the proceeds to pay off all debt. Figure out the rest from there. I'm sure it will be a lot of fun with the brother, but that should motivate everyone to find a solution. This eliminates the financial burdens and is kindof a reset.

[myrdale]

Do not cosign on the mortgage.

Sell the house. Buy a cheaper house, preferable with cash from the sale.

The brother needs to get a job.

It's odd the property tax wasn't rolled into escrow from the start? To say they want it rolled in now says they can't budget.

Consolidating all the debts won't manner if they keep adding to it.

They need a budget badly. No eating out. No vacations. Work the Dave Ramsey plan hard.

[myrdale]

I don't have the exact numbers for his credit card debt but it's a lot. More than he can afford to pay.......

What can they do besides bankruptcy to get rid of the credit card debt? Should they stop making the payments or what?

I know they are past due on their property taxes which I believe should be more important than credit card payments.

Specific to the credit card debt,

1) Cancel all cards today. Make it impossible to charge more too them.
2) Make a list of the accounts smallest to largest.
3) Pay as much extra to the smallest as they can.
4) Pay the minimum only on all other accounts.

[myrdale]

Currently my brother who can't work according to his neurologist lives with them along with his daughter ever other week.
My brother........hasn't worked in two years.
My brother has been divorced twice and like I said his 3rd wife died 6 months after they got married.
So my parents have helped him with divorces and custody battles and when he made mistakes when he was a teenager. The early stuff and the first marriage and maybe some over spending caused my parents to file for bankruptcy about 14 years ago.
My brother is currently waiting on decisions for disability for himself and his late wife.

To give more detail that just my initial statement of "the brother needs a job".

We've got no details on what his actual condition is. Either he is legitimately disabled or he isn't. Is he having seizures, passing out, or are we talking head aches or vertigo?

Your parents have already filed bankruptcy once because of him. They are now supporting him as he has no job and no disability income.

I am confused by the statement of disability for his late wife.

Your parents can't afford their own lifestyle, how can they support him? There is some sort of job out there he could do, just having a job, even sweeping the floors would help him greatly.

[skives]

I talked my parents out of refinancing and told them they needed to talk with a bankruptcy attorney. My dad contacted an attorney this morning and it looks like they may be filling chapter 7. Nothing is final till the attorney goes over their paperwork but there is relief from my dad and me.

[disneysteve]

I talked my parents out of refinancing and told them they needed to talk with a bankruptcy attorney. My dad contacted an attorney this morning and it looks like they may be filling chapter 7. Nothing is final till the attorney goes over their paperwork but there is relief from my dad and me.

We don't have enough information to know if bankruptcy is the right move but refinancing certainly was not so I'm glad they gave up on that idea. Hopefully the attorney will be a good one and will thoroughly examine the numbers to see if filing makes sense or if the debt is something they can deal with in a less aggressive way.

I can't help but wonder if other than the current debt if they are living below their means. If they do file, is their current situation such that they won't just run up new debt?

[skives]

I am taking over the handling of the finances and have already told them some things they need to cut out or reduce.

They had $68k in debt. $67k was credit cards. There was no way in my opinion they were ever going to pay that off at their age. My mom is 77 and my dad is 73. The bankruptcy attorney they talk to today is the same one that handled their previous bankruptcy and he knows what he’s doing very well.

[skives]

Here are their debts and income attached to this post.

[corn18]

MONTHLY HOUSEHOLD EXPENSES
1.Electric:$125.00 Average-Lower in the summer
2.Gas:150.00 Average-Lower in the summer
3.Cell Phone:250.00
4.DirecTV:175.00
5.Alarm Bill Removed
6.Food:300.00
7.Gas:175.00
8.Church:50.00
9.Trash:31.00
10. Scripts:35.00
11. Auto Ins:163.00
12. Auto Lease:453.00
13. Mike’s Loan:216.66
14. Sue’s Life Ins:184.39
TOTAL:$2,208.0

Why 2 gas bills?

$250 for cell phones? How about one $25/mo from Visible?
$175 for DirectTV? Get rid of that and have them use an over the air antennae (free) or YouTubeTV for $65/mo.
How much to get out of the car lease? That is ridiculous. You can lease a car for $219/mo these days.
$163 for auto ins? How many cars? That is crazy high.

So, save a total of $225+$100+$200=$525 right there.

[skives]

On the gas bills one is heat for the house and one is gas for the car.

The cell phone also includes their home internet and I have told him he needs to go ATT prepaid like my wife and I do for $50 a month. I'm not sure how much of that is the internet service. They only have one choice for internet through an ATT homebase that he has been grandfathered in for awhile now.

The DirecTv I believe he has lowered that to $59.99 a month. I told him Philo has the channels they both want for $25 but he has cut his package on DirecTv I believe.

The lease I am going to talk to him about it. Its an GMC Arcadia and the auto insurance is two vehicles. They live in Michigan and we have the highest auto insurance rates in the country I believe.

[corn18]

On the gas bills one is heat for the house and one is gas for the car.

The cell phone also includes their home internet and I have told him he needs to go ATT prepaid like my wife and I do for $50 a month. I'm not sure how much of that is the internet service. They only have one choice for internet through an ATT homebase that he has been grandfathered in for awhile now.

The DirecTv I believe he has lowered that to $59.99 a month. I told him Philo has the channels they both want for $25 but he has cut his package on DirecTv I believe.

The lease I am going to talk to him about it. Its an GMC Arcadia and the auto insurance is two vehicles. They live in Michigan and we have the highest auto insurance rates in the country I believe.

Most cell phone plans offer unlimited data. Drop the separate internet service and just use the cell phone as a personal hotspot. Can't imagine they are gamers.

Why two vehicles? Get rid of one. If it's for the brother, why does he need a car? Not like he has a job or does anything.

[skives]

The internet is for the house which is needed if a streaming service is going to be used to stream stuff on their tv. I don’t believe hotspots are unlimited data from the phone.

the other vehicle is an old plow truck to plow their driveway.

[Petunia 100]

The household budget says "estimated new mortgage amount" of $2,330.18. But if they are not going to refinance, that's not the number you want to use. What is their current mortgage?

That is an awful lot of credit card debt. How much of it was for medical and legal?

I think bankruptcy makes more sense than refinancing the house.