:-( My parents are broke

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Registered: 05-11-2010
:-( My parents are broke
5
Mon, 07-19-2010 - 3:46pm

I was just talking to my sister and she said my sisters got my parents to open up about their financial situation, which we knew was bad, but we didn't know how bad.

My Dad is EXTREMELY financially responsible and frugal, but they re-financed their house and took out a second mortgage right before the economy collapsed in order to build a detached garage with the above as my Dad's real estate office.

Not to mention that his job is a real estate broker and it is NOT a very good business to be in right now. He has been doing pretty well at selling something every couple months but all three of my sisters are also in college and I think it just hasn't been enough.

My Mom works too, but just at Starbucks and most of her paycheck goes toward their health insurance and 401K.

So my sister told me today that they are considering filing for bankruptcy! :-( I feel so awful for them. I am going to talk to DH when he gets home to see if there is anything we can do. Maybe we can offer to pay off a loan for them or something to lower their monthly payment, and then they can pay us back when their situation improves a lot. They just have so much debt right now and it is hard to manage all that--the idea of declaring bankruptcy is appealing, I guess, because they could get all their debt forgiven, but I'm not sure how it would impact them in other ways.

Sigh. I just feel so helpless. I wish things weren't so crappy right now everywhere. :-(

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Registered: 02-27-2008
Tue, 07-20-2010 - 10:54am

Adrienne - I'm glad you're feeling a bit better after talking with DH. It's hard to see parents go through something like that. Stupid economy.

I wanted to tell you - and maybe your dad already knows this b/c he works in real estate - but I used to work in the mortgage industry and I found that very few people knew... anyway, we used to encourage our customers to call us if they were going through a rough financial time. It sounds weird, but mortgage companies will almost always try to work with customers to help them make their payments. There are (or, at least there used to be when I was working) lots of different arrangements that can be made - sometimes alternative payment schedules can be set up for a period of time, or a longer grace period can be arranged, etc... basically, they want to know what's up and if you're going through a difficult financial time and are finding it hard to make payments in full/on time, they would rather you call them and try to work something out than not make the payments (though I know your parents probably aren't doing that... but many people do). It's in their best interest to help customers out - they don't want to see a forclosure. IDK if ALL mtg companies do this, but I would assume so... anyway, it's worth a try. But like I said, your dad might already be aware of that option given that he's in the biz.

I hope they get something figured out that helps them turn things around. Many many many responsible people are finding themselves in the same boat... it just sucks!




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Registered: 04-07-2003
Tue, 07-20-2010 - 12:03am

Adrienne, I'm so sorry to hear this! I believe you when you say your dad is very financially responsible - sometimes crappy economies can throw even the most responsible people for a loop. Jeez, DH and I worked our butts off to repay all our debts, save for a house/condo, buy a new car outright with no car payment, etc., etc., etc.... and when everything finally fell into place and we actually bought that stupid condo, the econmy got flushed down the toilet! So now we've been in this place for 2 years and we basically have no equity because the value plummeted and is now just starting to get back to where it was when we bought it. We basically may as well have been renting, like we were in the first place, because the money we've been paying on our mortgage has been going down the drain. What a nice reward for all of our hard work!


Anyway, I digress. I agree that bankruptcy is not the end of the world. My parents declared bankruptcy when I was a teenager. They didn't lose their house and their debt was forgiven. However they didn't have any investments so I'm not sure how those would have been affected. I know next to nothing about bankruptcy in the US, but I say if they aren't going to lose their house or any of their retirement savings, then it is probably the best thing for them.


I hope they can get it figured out soon! And how generous of you to want to help them, especially with a baby on the way!



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Registered: 05-11-2010
Mon, 07-19-2010 - 8:23pm

Thanks guys--I was just talking to DH about it and maybe it would be the best thing for them . . . he helped me realize that it wouldn't be the end of the world--they wouldn't lose their house or anything and though they wouldn't be able to get any loans for the next seven years, hopefully with the debt being forgiven they wouldn't need any more loans.

I don't know, I totally trust my Dad to do what is best--he is like the smartest person with money ever (maybe ironic to say but I'm totally serious) and I'm sure another family in their situation would have defaulted on their mortgage and/or declared bankruptcy way sooner.

I think I will try to mention to him or my Mom that DH and I could help them out if that would help, but honestly I feel like they might be in so deep that there would be relatively little we could do to help. :-(

Anyway, talking to DH helped me feel better about it anyway--I'm sure it would be a huge load of my Dad's shoulders and DH pointed out that by the time they wanted to retire they would be out of the post-bankruptcy horrible credit freeze, so that's good.

Also, they still do have their retirement which they haven't used yet, but I guess my sisters were saying that they would have to start dipping into their retirement if they didn't declare bankruptcy and that's what my Dad would be trying to avoid . . .

Bleh.

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Registered: 02-26-2008
Mon, 07-19-2010 - 7:43pm

(((HUGS))) I am sorry to hear about that. I hope that you guys (if you can) help them out in some way. Bankruptcy always sounds nice, but like Alyssa said it can hurt them as it's on their credit until like 7 to 10 years and they have changed things around now in the states with it.

I will be keeping them in my thoughts and prayers! KUP









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Registered: 04-22-2006
Mon, 07-19-2010 - 6:23pm

Oh Adrienne - I'm so sorry! What awful news :( I hope that you and DH can help them out in some way, or if they can figure out a way not to go into bankruptcy. In some ways it seems appealing, like you said, but it could make the next 5-10 years (or even longer) very very difficult for them.

(((hugs))) - your parents will be in my thoughts. Please keep us posted.





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