Credit card debt advice needed

My wife and I are presently caring for an elderly relative that recently had a stroke and is recovering slowly. Until the stroke, she was working full-time and maintained good credit. We have been paying her bills (with her money) and have discovered that she has over 30 grand in credit card debt at 20%+ interest. The payments are unsustainable on her disability pay. I'm not sure what the best approach is at this point but we feel that we need to get rid of the high interest debt ASAP.

Options that I can think of:


Should she get an equity loan/refinance the house to pay off the credit cards? . She has a small house with a small mortgage and likely has enough equity (assuming no more surprises...) to pay off the credit cards. That said, we think this might be impossible since she is presently quite disabled and not likely to ever return to work.

Should she work with one of those companies that advertises on the radio/TV about getting credit card debt dramatically reduced?

Should she just stop paying the credit card bill and let them eat the debt/wreck her credit. I am quite confident that she will never need credit again. This option feels wrong until I start thinking about the 20+% interest those bastards have been charging her.

Any advice would be appreciated.

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Originally Posted by stoinkythepig

Should she work with one of those companies that advertises on the radio/TV about getting credit card debt dramatically reduced?
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the only thing of value they do, is negotiate a lower interest rate, something you can do yourself. I would ask all the creditors for a 2% rate under threat of bankruptcy

bankruptcy is another option

Getting her debt paid off is a priority but defaulting on it might not be easy or the best choice.
I would talk to a attorney and or a financial adviser ,if you have one you trust, to get a clear picture of your options.

Do you need to have Power of attorney? Social Security? Savings, Health care needs. Will the bank even grant her a loan because she is disabled?
To many variable's for a bike/gun /truck forum! !
Wish you the best.

what about a reverse mortgage? They're are not typically viewed favorably, but in this situation it might be the way to go?

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Originally Posted by Bonk!

what about a reverse mortgage? They're are not typically viewed favorably, but in this situation it might be the way to go?

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That’s kinda what I thought of also. 9/10 it doesn’t make sense. But if she had debt and she won’t return to work it may be the best solution. 100% call and negotiate a better rate/one time settlement maybe.
Since she’s in debt I assume she’s doesn’t have any retirement accounts.

Transfer it to a new credit card with an intro 0%apr. Should buy you a year and a half.

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Originally Posted by tsorfas

That’s kinda what I thought of also. 9/10 it doesn’t make sense. But if she had debt and she won’t return to work it may be the best solution. 100% call and negotiate a better rate/one time settlement maybe.
Since she’s in debt I assume she’s doesn’t have any retirement accounts.

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I did this for my parents. Only income is a modest social security check so we tapped the equity in the house for living costs. They couldn't qualify for a home equity line because of the income requirement. Rocket Mortgage was great to work with. Personally I wouldn't kick the can by simply transferring it to a new card - things don't get easier with elderly folks with the passage of time.

Transfer it to a new credit card with an intro 0%apr. Should buy you a year and a half.

Does she have life insurance? Can you take a pull from that early?

I'd strongly recommend that the three of you visit an estate-planning attorney as quickly as you reasonably can. There's a lot at stake, and professional advice from an expert is called for.

Another option to consider would be a personal unsecured loan written up as debt consolidation, provided her credit score hasn't been/ isn't being hit. I'd go a step further and suggest using a credit union for this as they tend to have better terms in general.

I would seek legal help with this one but also check out what Dave Ramsey has to say about it. He deals with a ton of questions like this so look for one of his pod casts or look on youtube for an episode dealing with it. Most likely he would recommend legal help as well but he would at least explain why your other options may or may not work. It's also fairly easy to call into his show and actually talk to him if you have an interesting topic, which you do.

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Originally Posted by dontpanic

I'd strongly recommend that the three of you visit an estate-planning attorney as quickly as you reasonably can. There's a lot at stake, and professional advice from an expert is called for.

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Good advice. There are specialists in elderly affairs.

We hired one in North Andover for my older brother and his wife. IIRC the retainer was $3,000. If interested PM me for the contact. I see you are in NH: if she is as well, you’d want to get one who is NH based.

Don’t want to be morbid but be sure she has a will, and obtaining a Power Of Attorney while she has her faculties is something you should do if she is still “Competent” in the legal sense.

Some businesses like the phone company will allow a relative to conduct affairs, but most financial institutions will require you have Power of Attorney.

Thanks all for the advice. I have been going through a massive stack of papers from her house and discovered that she's all set for health care for life, and is great shape financially. There won't be problem paying off the credit cards or any other debts. Dodged a bullet.

Superb!

Please still seek out an estate attorney. You've been given a gift of time - just don't waste it.:pray:

Agreed - dealing with this stuff when she is less capable mentally could be a nightmare (one I am living now!).

True sad story. My mom went in a nursing home and my older brother was named executor. Then my brother had a stroke. So the first team and backup were not competent. My brother had the only copies of her will.

I basically passed myself off as my brother when my mother passed away or it would have been a mess. No significant assets so it was no problem in the end.

When we had a will and trust made, we had a “backup to the backup” named, and picked a much younger relative, and gave him copies of everything.

I'm betting we could easily fill a separate thread with the hickups of eldercare. I laugh now but there were times...

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Originally Posted by 02redhawk

I'm betting we could easily fill a separate thread with the hickups of eldercare. I laugh now but there were times...

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This would make an excellent band name.

We are dealing with a slightly similar situation now. My wife's parents thought it was a great idea to list each other as the the guardian incase anything happened instead of any of the 6 children. Well they both ended up in the hospital days last week with different illnesses and since they are both out of commission for months if not forever we are having trouble just asking simple questions. I'm sending my wife back to boston from japan this week for an unknown length of time so she can at least try to clear some of this up.
It would have so much better if they had taken some steps to avoid this. If they happen to not pull through or need continued care they are screwed as the estate is huge and no one knows what's going on. They kept everything to them selves. Even when one got sick the other didnt say anything until she did too and now we have a problem.

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Originally Posted by butcher bergs

Another option to consider would be a personal unsecured loan written up as debt consolidation, provided her credit score hasn't been/ isn't being hit. I'd go a step further and suggest using a credit union for this as they tend to have better terms in general.

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i had a similar credit card debt a while back and was looking into this option. what my bank did for me was a reverse loan on my car at 1.49% interest, and a personal loan for the difference at 8.49% interest. the reverse auto loan was secured debt, and brought my debt-to-income ratio down enough to qualify for their lowest interest rate for personal loans.

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Originally Posted by boosten lebaron

We are dealing with a slightly similar situation now. My wife's parents thought it was a great idea to list each other as the the guardian incase anything happened instead of any of the 6 children. Well they both ended up in the hospital days last week with different illnesses and since they are both out of commission for months if not forever we are having trouble just asking simple questions. I'm sending my wife back to boston from japan this week for an unknown length of time so she can at least try to clear some of this up.
It would have so much better if they had taken some steps to avoid this. If they happen to not pull through or need continued care they are screwed as the estate is huge and no one knows what's going on. They kept everything to them selves. Even when one got sick the other didnt say anything until she did too and now we have a problem.

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This is a tough one (which probably warrants the hiring of an estate lawyer for guidance) and a lesson for everyone. Talk to your parents, and be persistent until they let you know their plans / intentions and if they haven't made any, keep at it until they do. We almost waited too long with my folks, but now the Power of Attorney and Healthcare Proxies are squared away, and we know where their Wills are. This has allowed me to get a firm grip on their finances (including canceling a dozen credit cards - most of which did not have balances fortunately) and create on line profiles giving me access to the bills if I need it. Now to get them out of their house! :hmm:

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Originally Posted by loudbeard

This would make an excellent band name.

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You're on a roll

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Originally Posted by Jim

i had a similar credit card debt a while back and was looking into this option. what my bank did for me was a reverse loan on my car at 1.49% interest, and a personal loan for the difference at 8.49% interest. the reverse auto loan was secured debt, and brought my debt-to-income ratio down enough to qualify for their lowest interest rate for personal loans.

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Not related to the thread... but this is exactly how I fixed my credit after being an idiot in my early 20's (my truck at the time covered the debt, somehow... banks can be stupid apparently. They said it was worth more than I paid 7 years and 100,000 miles prior). Instantly jumped like 150 points and I've been anal about maintaining it since. Just shy of 800 now, but I also just got a mortgage and new CC less than a year ago ha.

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Originally Posted by RyanNicholson

Not related to the thread... but this is exactly how I fixed my credit after being an idiot in my early 20's (my truck at the time covered the debt, somehow... banks can be stupid apparently. They said it was worth more than I paid 7 years and 100,000 miles prior). Instantly jumped like 150 points and I've been anal about maintaining it since. Just shy of 800 now, but I also just got a mortgage and new CC less than a year ago ha.

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Haven't logged on here as much these days. I do want to add that because I took out so much against a 9 year old Ram, when the body rusted out I needed to roll $4000 into a cheap Hyundai Sonata lease... so I had to deal with that embarrassment for 3 years to get it all paid off haha. Still worked out great though.