[snackage]

Help! My parents have $45,000. In credit card bills. They are living on social security benefits plus they have $35,000. In a savings account and they rent their home. If they continue to make their $1000. A month minimum payments they will run out of savings within two years. I have advised them to default on their credit cards. They have written a letter saying that they cannot pay them but they can't sleep at night wondering what will happen to them. I didn't think they needed to pay an attorney but now I'm wondering too. Please help, does anyone know what happens in such a case? Marie

[Fr_Chuck]

They will not be able to keep their savings if they go bankrupt the court would expect most of it be used to pay off the debt.

That is the problem, they are not broke at this point. If they paid the 35000 off the amount, they would only owe 10,000 and it could be paid off.

Now their social secuirty can not be garnished, but if they get a judgement they could attach the bank account and take the money in savings.

So if they did not have any money in savings, and just was on social secuirty they could just stop paying the credit card company and there is not much they could do, They could not have a checking account because once they got a judgement, they would most likely attach any money that went into the checking account.

You can speak to an attorney, but basically as long as they have resourses to pay off the loan, they are expceted to.

[CaptainForest]

Try to negotiate with the cc companies (through writing).

Settle the 45,000 debt with them for 35,000 or less. That way, it's the same as bankruptcy, but you don't have to go through the entire hassle of it.

[excon]

Hello:

I’m glad you brought this up. It gives me a chance to examine my moral compass once again. As my compatriots so deftly pointed out, your parents can absolve themselves of this debt by giving away all their money. It may not be resolved as far as the credit card companies are concerned. But it will be resolved, because they cannot squeeze blood from that ‘ol turnip. And, their credit rating will not survive no matter what they do. So what? They’re probably not going to be buying anything on credit anyway.

Do I think your parents should keep their word to the credit card companies? Yes! Do I think they should throw themselves on a sword in order to do it? Well, now I’m not so sure.

It’s easy for some to suggest that your parents should resign themselves to a life of poverty in order to satisfy a debt. But, we’re not talking about young people, who can recover from such a fall. Old people can not. So, let’s call a spade a spade. What we’re talking about here, is condemning two people to live the rest of their lives in abject poverty. It isn’t a pretty picture. And, I don’t deny that they, and they alone are responsible for their plight.

Nonetheless, I suggest that it may be time to examine one’s priorities. To whom is this family obligated, and how do they rank? I know of two entities: themselves, and the bank. I would probably rank them differently than you. As a matter of fact, I know I would.

Is there something they can do? Absolutely. Is it a choice between two evils? It is. But it’s a choice they’re being forced to make in any case.

excon

[Irulan]

Bankruptcy does not always provide the answers one expects, and often it breeds more problems than solutions. There are other possibilities to chose from.

1 The savings account can be trasferred to another person, son or daughter with parents as secondary owners of the account.

2 Consolidation of credit card debts through a credit line which can be paid off at a lower rate.

3 Conference with a debt counceling services who can give professional help.

[wynelle]

In some states, financial records can be reviewed for the previous 3-5 years to determine if there has been an attempt to transfer funds or property to another indivdual to keep those funds/properties from being used in divorce settlements, bankrupties, etc. If a family member is knowlingly involved, the funds/property can still be seized.

While I would hate to see your parents left penniless and in abject poverty, the one suggestion offered regarding contacting the credit card companies and trying to settle a payment on 50cents to the dollar would leave your parents with some savings left. But they do morally, ethically, legally owe this debt. *and* it would be unethical to then run up more credit card charges.

[excon]

Hello a:

BOTH bankruptcy and default are bad for your credit rating. One isn't any worse than the other. The good news for THIS elderly couple is, elderly people don't need credit.

excon