My mother is in debt (poor pretty much) and does not want to sell her house, even though that would benefit her. What to do?

Sounds like the bank may take her house so problem solved. She may have to go on medicaid. Also she will be eligible for medicare soon. She is turning a blind eye to what is going on around her. She may be scared. And the thought of selling her house and letting go of the past may be too much for her.

I would take her to consult a bankruptcy attorney. I don't know anything about bankruptcy law, but she's never going to get out from under that debt and that's where I'd start.

Sunshine 'liked' the first few responses, including my own about bankruptcy. Perhaps she is one of the few who takes the advice and goes on to do something about it! If so, the best of luck to her, but it is pointless saying it all again when she has been off the post since then.

It sounds like she should check with an attorney (yeah I know, more fees), or check with someone about filing for bankruptcy, let the house go and find a one bedroom apartment somewhere.  It sounds like she does not know how to handle finances and you moving in with her is not the solution.  you might end up helping to pay off her debt which is not your responsibility.  Her getting rid of the house will also take care of not having to pay taxes every year also.  And her being so young (but you never know), IF she gave you the house, if anything would happen and she ends up in a NH before 5 years....you would be responsible for coming up with money for how much the house would be worth to pay the NH.  The NH's figure that people like to "give away" stuff so that they don't have to pay and fall on Medicaid, but if they have assets now or given away within 5 years of their entry into NH that asset would have to be repaid to NH.  She definitely would be better in an apartment (hopefully with a good landlord) that way she would only have expenses like electric, etc (no taxes, nothing to worry about fixing in the home,etc).  Wishing you luck on this.

I think Sunshine has left this discussion. She has not responded since 10/13.

First off the "Leave it to my children" is a BS excuse. Im sure she is emotionally attached to the home (understandably) She is using this excuse to justify not selling the home. I am 64 I can tell you this is no longer "old" Unless your names are on these credit liabilities you may have an opinion as to what you think is best but the truth is it is none of your business what she does with this debt or this house. If she complains to you or comes looking for help your best bet here is tough love. Sorry Mom this is not my debt and not my problem. Your an adult it is your responsibility. There is ALWAYS a day of reckoning for living in a financially irresponsible way and when that day comes she will be forced to deal with it. I agree with you it is better to deal with these things now than wait until your forced.
as far as the 55% of pay. She is fortunate she is getting this. Depending on the state she lives in she may qualify for unemployment benefits as well as getting this money from her employer and she may qualify for medicaid. She should research both.

sunshine1986: While that is a valiant effort on her part to let God handle the debt, she needs to face reality. Think about a debt management plan. I had a friend who was $80K in debt and that worked for her. Prayers sent.

Well she needs a dose of reality. She is living in fantasy spending, and there isn't enuff money to keep the house. Its getting sold period. She doesn't have an estate to bequeath people.
Id get those credit cards away from her. She is going to spend herself into the poor house and they will take her house. She must want to be out on the street.
She can't be coddled. She has no assets to leave bc of her spending. Id make sure your not on the hook for anything. You have to get her out of lala land to face it. Or I'd walk away and let her fend off the creditors. You tried and she refused to listen. Is she of sound mind? I know when my dad got dementia he bought anything and everything off the tv and back of magazines. We had to put a stop to it. Took his credit cards/wallet and checkbook. We did it 1 at a time. Told him he lost it. He looked but never found it. I think he was given an old credit card that was defunct. You have to get a handle on it. Do you know if she gets the scam phone calls? They do cold call all day to get an elderly on the phone to get $ from them. We had one from Jamaica that would call 5am to 1230 at night hoping g to get my dad on the phone. He wouldn't stop. There were also checks made out to people for various amounts. Dont know who these people are.
You better find out! If it has to get ugly so be it.. Good luck.

We were in a similar situation with my mother. We couldn’t convince her that her kids didn’t need any money and that we wanted her to use her house to pay for her retirement. It was costing more to maintain than her monthly income!

Maybe you could get your mother to consider moving to a smaller home, or a condo. Then use the funds to set up a payment scheme for her debts.

Sunshine - Are you still here? you’ve gotten loads of insight.

I’ve got to ask you:
- how much of this is a surprise to you? Or has she been a financial terrorist since forever? (My mil was this & dementia made it worse.)
- what is included in 200k debt? Does it include the 2 mortgages?
- if it’s credit cards, and it’s that she’s making monthly minimum payments, when will they get paid off? Next year or 10 years? This info will be in her monthly statements.
- if it’s medical debt, is it current or has any gone to collections? These tend to file for a judgment. Is she edging towards that happening?
- outside of mortgages, any other secured debt? How much?
- is she current on paying both mortgages?
- totally current on property taxes, property insurance & utilities?
- is she current on filing and paying the IRS? And state taxes?

Now that she lost her job, what does she have for $?
- can she pay her bills or is she needing you or Bro to pay for stuff?
- the job 55% payout, is that a lump sum to be paid to her or it is a settlement over time & if it’s this for how long? & will the monthly payout cover her monthly “nut” aka the basic items she should be paying each month (utilities, yard guy, mortgage, type of stuff)?
- can she file for unemployment benefits and if so what would she likely get paid each week? This is pretty important, as some states pay a really incredibly low UI. Like my state - Louisiana- pays a maximum of $247 a week but most get way way less, like $165 a week on average and for 26 weeks max. So if she went onto UI, would it cover for her monthly costs? Would you or bro cover the shortfall?
- if she filed for SSA retirement income, what would that pay? At 64 she can file earlier but it will fix her to a lower payout till forever. It’s generally not a good idea to do this..... unless her retirement income is really low as she paid very little into SSA for working years.

- what is tax assessor value on the property and it is kinda accurate? If it sold for this value, & after both mortgages paid off at the Act of Sale, how much would be likely net from the sale?

I think you, like you yourself, need to know these figures as to determine what makes sense for you to support or not support your mother’s decisions. It ultimately is her decision whether good or bad.
But you don’t want to say move out of your apartment next month only to find that mom is likely getting foreclosed upon in January. Or that she hasn’t paid her property taxes and the house has gone up for tax sale in 2020 & 2019, so you spending a penny on the place is to the benefit of whomever bid highest at tax sale. Or find that her UI is getting debited by State or IRS for past due taxes, so she’s even clusterF her UI.

For those that are financial terrorist types, helping them by paying for stuff is just encouraging their behavior. Yiur helping them be codependent. They don’t learn as they flat do their ABC’s (ask, beg, cry) and get bailed out over & over again. If there is dementia happening as well, they can’t be competent enough to deal with all this. It’s quite sad and infuriating simultaneously.
For your own sanity, take a hard look at her $#’s and make a decision. If she bottoms out, she can file bankruptcy & hope that the mortgage holders will do a reaffirmation of the mortgage so she can keep the house.

Sunshine1986 first and foremost, do not under any circumstances move in with mom, nor provide her with any financial assistance. The old saying, you made your bed now lay in it. While this may sound cruel, there are some severe consequences for being her enabler. She needs to be hit hard with the bad debt choices she has made. It will be one of the most difficult decisions you will face, however, as she ages and if she continues on this route it will only get worse. I would consider speaking with an elder care attorney to see if she is considered capable of making financial decisions. While she maybe competent in many areas, she may have diminished capacity for making good financial decisions. The sad thing is that it is HER money, and her choices if she is found to be competent.
My MIL did similar and she was considered competent until she was about 89 years old. But, even then it was a hard pill to swallow watching her take on more debt. Her home was taken from her in a sheriff sale and she has to accept she had nothing before she realized she had made mistakes. There were several people who could have helped her, but, with 4 different elder care attorney lawyers telling us to let the cards fall where they will and not help, we all followed their advice
This then opened the door for someone to handle her finances in form of a guardianship. She was given an allowance, but someone else took care of her money. That person had to be strong and give only the allowance for spending. All her bills were accounted for and paid by the guardian. Food was purchased via a gift card from her favorite grocery shop.
Best wishes.

Please do not move in to enable her to continue in this situation. It would not solve the debt problem and would open a can of worms. Does she understand about the high cost of medical care as a person ages? That today very few parents leave an inheritance of any size. As parents live longer, they need their money for their care. This is not Europe with a socialized aging system, but quite different. Does she really grasp that? Through personal knowledge/experience? Or are her ideas about old age in this country inaccurate and uninformed?

Has she been willing to talk to a financial adviser to get a picture of her options? What does she plan to do about her debt? Leaving it to God to provide a miracle is not spiritually sound. The Lord expects us to use ordinary prudence. Have you ever heard of the parable: An old man drowns in a flood. In heaven he asks God why didn't the Lord save him? Answer: Those three rescue boats that you turned down while waiting for a miracle? I sent them, but you had to get in!!

If your mom is a person of faith, this may be a good time for both of you to pray guidance and the wisdom to recognize it when it is sent and find peace in knowing it is the right path. I second another person's suggestion to seek counsel with her pastor or person that she has trust in.

Painting a broad stroke, I disagree with almost everyone else on how to approach your mother. When trying to sway or convince a person, never make they feel bad about themselves. I would guess if your mother is given a glimmer of hope on a positive outcome, she is more likely to take action.

Question, are you valuing the holders of the debt more than your mother? Maybe selling her house and paying down her debts is the right answer for her. But then again, would she look back in 5 or 10 years and regret that decision, because she needs those funds?

If you or your siblings want to explore buying equity in your mom's house or lending her money secured by the equity of her home, don't do anything without consulting an elder law attorney first.

First off I would talk to your county Area on Ageing Council and see what they suggest
Do you have a Power of Attorney (POA)?
The next could be an Elder Carry Attorney. Mine was a big help.

Sunshine, some questions:

1.   What kind of debt?  Secured or unsecured?   This makes a big difference, especially if any of the debt is collateralized by her home or other assets.

2.   Have any of her creditors filed suits against her?   If so, have any proceeded to judgment stage?   This is critical b/c judgments for unpaid debts need to be discharged when a house is sold, which would diminish available funds for remaining debts.   They will also accrue interest (I believe at an established state monetary rate) until paid, so they will become larger debts, reducing the net funds from sale of a house.  

3.   I'm surprised that she's "living off credit cards".    With a large amount of unpaid debt I'm surprised that credit is still being extended to her.   What would she do if her credit cards were frozen and she had no access to them?

4.  As for leaving the house for you and your brother, until her house is valued much higher than the amount of her debt, I'm not sure there would be any equity left to bequeath. The debts plus interest and possibly penalties may consume the equity.

5.  I think you're understandably vacillating between becoming more involved vs. stepping back.   

6.  I'm not clear though on how you "would have to sacrifice" your life for her.    You wouldn't be assuming debt, right?  Are you still contemplating moving in with her?  

7.    I don't have any experience with financial advisors, but I do think that bankruptcy might be a consideration.   I assume it would cost more than any financial advisor consult would be, but it will also create legal alternatives by which your mother would HAVE to abide.

Never get on board a sinking ship.

The interest alone on $200 K will sink it.

Sometimes, using a home's equity to get one through difficult times could be okay. However, imo, and not legal advice, when that time comes and you are stuck, you need to be willing to sell.

If your mother has poor credit; if she can no longer service the debt, she should sell.

You can help her by getting her some debt counseling.

If she was still employed, she maybe could consolidate the debt by refinancing the house and paying off the debt in full. If she could afford the new mortgage payments. If not, she should still plan to sell. A home that is paid in full is harder to finance than to refinance, but it can be done.

I do believe that God has a plan for all of us, however I also believe that old adage that God helps those who help themselves. She will never win with this house thing. You moving there would probably only delay the inevitable and if there happens to be another house catastrophe, you'll both be sunk.

Maybe she needs to see the big picture. Make a list of all the debt she owes and compare it to the income that is available to her. Covid could prevent her from getting full time work again for a long, long time. Explain that if she continues to live as she has, there isn't going to be a house to give to you and your brother anyway. Not to mention, and a big one to drive home to her, she cannot just give you her house because it might prevent her from nursing home care if something happened to her health and she needed a nursing home. Tell her to make a list of every single bill she has that is not a priority (cable TV, internet, big car payment versus cheaper car, hair/nail salon, etc) and ask if she'd like to give all those things up just to break even. Bill paying is all about priorities and hers seem to be out of whack if she has consistently used credit cards to make ends meet.

If there is any equity, at all, to salvage from the sale of the home - she needs to take it now. That would be another thing to show her - equity she 'might' make from sale of house versus debt against the house. It's very possible she has already spent her equity with loans and has actually already lost it. Even selling a house that has not had regular maintenance will eat up more of the equity my making repairs to get it ready for sale.

Once you have the financial details ironed out, you may be able to work with a credit counseling company to make one payment to them and they distribute among creditors. She will have to close all of the accounts while they are making the payments. The credit cards are going to put her so far underwater (if they haven't already).

She can reduce her own stress and create a happier life if she gets in to something more affordable now. You aren't being selfish. You are being realistic and she needs to do so as well. At 64, she has the possibility of living another 20-30 years and her current situation would have her under a bridge somewhere if her children happened to pass before her. Ask her to make these changes for her children so they don't have to try and clean up a bigger mess than there is right now. She has no inheritance to pass down. She already spent it. Now you have to figure out her future.

Ask her what her plan is when her debt exceeds any equity she might have left in the house, cannot pay the mortgage/loan payments, and the house is foreclosed? She would be walking away without a red cent to her name. She may or may not have secured full time work again. She would still owe money on credit cards - maxed out and unable to use those to live on. The miracle she is waiting for will come when she changes her habits.

Are the debts the result of bad decisions? Living beyond her means? The result of her husband dying and leaving debt but no income or resources? I don’t understand why selling her house and paying off her debt will, in and of itself, make the cost of her living any cheaper, especially if she has been habitually in debt her whole life, and has had the house for a long time...unless of course the amount of debt piled against it is larger than the value of the house. Please explain what’s going on financially in a little more detail. The tone of your post makes me think your mother has always had a hard life which has been made worse by the loss of job hours due to the pandemic. By the time she needs nursing home care, she will probably qualify for Medicaid even if she keeps her own home; hard to say.

You also don’t say if and when she intends to apply for social security, but we do know that she is working at some kind of employment. How long can this job be expected to last? Is there a chance she can go back to work full time? Could things get better when she applies for social security without penalty and keeps on working? Your mother may be thinking that it’s a lot harder to repossess a house than to evict someone for non-payment of rent and it’s easy to understand why she may want to hang onto a house that may be the only possession of value she owns. Your idea of moving in with her for a while might be a good idea if it enables you to better sort out the finances, and helps pay the existing mortgages but that assumes you will pay rent when it sounds like, if you move in, you intend to take a free ride; in that case, you will be making the situation worse.

Based upon what little information is available, I suggest that you move in with her, pay rent, sort the finances, convince her to sell if appropriate, help her list and sell the house, help her apply for a housing subsidy, find a low income apartment, get her moved, and find another place for yourself. Sounds like it will take two or three years to accomplish but your mother is young and you also may be young enough to start over if you are not married and have no dependents. Others consistently advise that it “isn’t your problem.” It is your problem if it’s causing you to worry constantly and substantially interferes with your quality of life and ability to manage your own finances. If your mother’s debt is the result of chronic poverty and she has raised you and your brother and incurred debt in doing so, the least you can do is to continue to help her try to get it sorted out and help her find resources. That, of course, assumes that you love your mother and feel an obligation regarding her well being. So many people on this website seem to be giving advise based upon their own feelings of hostility toward one or both parents, “it’s all about me” thinking, or antipathy toward having to take responsibility for vulnerable adults in general. I’m not of that school of thought. People live too long now for children to believe that they won’t have to offer their parents some type of assistance in their old age. In the vast majority of cases, it will happen as part of a normal life cycle that everyone needs to anticipate, plan for, and be ready to take action when the time comes. This is a discussion that should take place when parents are still fully capable of taking care of themselves. The time is ripe to have this discussion with your mother and for you, your mother and your brother to get busy figuring out how your mother’s poverty is going to be handled when she can no longer work or care for herself physically or financially. Unfortunately, if you think that the problems and responses presented on this website are fairly typical, then you will agree that very few children are either ready or willing to face the inevitable with their parents nor do they grasp that they are likely to face the same abyss.

You could pay off all her debt tomorrow, and she'd rack it up again. Her behavior and mindset is what's driving the debt. If those things don't change, no amount of financial counsel will help. And it sounds like she's behaved like this for a long, long time. She's so far in the hole that it sounds like she's given up. Debt is just the norm for her.

I'd guess some of the debt was for something truly necessary, like medical bills or home repairs. But some of it has to be fun spending. Maybe she is lonely, scared, or bored, and she's buying things to fill whatever her empty place is. Retail therapy. She may not even realize that's why she does it.

There's more to this than her insisting it be an inheritance; especially if she's been told no one wants the house. The inheritance is a mask for the real issues. If she sells her house, it's defeat. She spent herself out of her house, it's no one's fault but hers, and knowing she messed up this badly is a horrible feeling. Selling would mean her facing the debt head-on, and she won't do that. Hence saying God will fix it, so she doesn't have to.

Also, she may be thinking you'll take her in if the house is taken. You're her backup plan. You'll need to explain that you love her but you can't take her in or support her financially. You have your own family and future.

And for the love of God, do not move in with her!

Your mother has the upper hand here. It is her house. She is not classified cognitively incapable. If you have a point to make to her you are coming at it from position of child to parent. Parent does not often bow to a child. It depends on their mindset. She is young. A miracle could come along . She can work longer than normal (65) unless her health is an issue. Since you do not own a house and rent I can only guess you can't crack open a retirement savings investment of your own and free her from debt. She is thinking of you. And you do not like it as it might make you feel unpleasant emotions but believe me she is also feeling badly not being able to help her kids out in inheritance. Do not be ashamed I will explain...Imagine your generation being the first to not be able to get into the housing market. This is an unprecedented time in more ways than one. Your mother might be super worried about her children's future. With the right reason. The basement was an investment into the sale ability of the property. Otherwise after she is gone (if she were to go with a house that has not kept up in upkeep) you and your brother would be sitting with a property that sells for a fraction of market value. Now if your brother can bail her out ...Trust Me....he will need to agree on paper he has no interest in the full ownership after mom dies. People can turn on you even loving siblings....his help must be without interest payments it will only come out as full amount upon sale of the house and that's it...family... and hopefully you both have more morals than the average bear. Now as far as living with her...If you two are fun roommates I can see it working out. If you have no children of your own this will become a parenting experience if she were to end up with a chronic disease later on. You will experience a growth and appreciation if you wait and are the one who holds her hand as she exhales her last breath. Not all of us have the option of going gently..there is Dementia and other diseases ...there is diaper changes...wheel chairs ..dealing with in home care options in your area and before you ewwwww....there is also disgusting nursing homes with abusive workers or worse rapey old men ... sneaking into demented women's rooms at night. True story. It might not happen everywhere but..... Having a house is a safer option for her. I am a worse case scenario on two feet. I know. But ..I want to show you some of the reasons Mom wants her house. Do you two get along? Can you afford weekend's away from one another. Can you share popcorn and a movie night once a week with mom at home while you live with her and still be chill ?? Can you take the rent you pay her and dismiss it as rent and DO NOT take it as a direct right over ownership of the house later? This is a big test. Are we on Earth to survive as humane humans not as an Ayn Rand. She is in my opinion one of the reasons America is dog eat dog.

You want to research a solution quickly ...go fork out $1500 each on an Elder Mediator a professional one....not Joe next door.... they will interview each family member discuss finances and options for your mother's future plans over all. I assume there are only 2 kids and your Mom. I know I am coming at this to you really shooting from the hip...but I do not think surprises help us in the end. We should all know before hand about aging and elder care it is a necessary skill and we must be prepared. I wanted my mom to sell her house so she could live her life to the fullest. Unfortunately my siblings wanted the house to stay in the family without them telling me this ...they turned on me....later God intervened. That house is now up for sale. Mom died in May. Not COVID. Get a mediator. No one wants to buy it. None of us can buy the others out. No one is talking. See now?? Trust me get into debt go for an Elder Mediator to discuss estate options and future care in old age.

Perhaps a debt consolidator could help her, too.

You should not sacrifice your life. Do not move in with your mother. Filing for bankruptcy might be her best option. Selling her house may not net her enough money to pay off debts. Does she have $200,000 equity after paying mortgages left.

Nened more info.
Your MIL has to live somewhere and you never mentioned where she wojld live if she sold her house.

It's always less expensive to live in your own home that is paid for then to pay rent somewhere.

Also, a lot of times a family member offers to let MIL live with them and when it doesn't work out, they end up in a Senior Home.

So what if she has bills, don't worry about it, it's not your problem, her house can be sold after she's gone to pay her bills.

Evidently things aren't as bad as you think, or the Bank wouldn't have loaned MIL any money at all.

You said you thought about moving in with her to help her out which would be fine as it would help you out to because you could see lots of money that you were paying for your Rental while giving a fair amount monthly, to help with MIL's Bills and you can always go get yourself another apartment if it doesn't work out.

You might even let MIL know the live with her arrangement will only be 6 mo or 1 Year to help her pay down on her Credit Cards with you paying half the Rent.

You would be able to save up some money yourself and it would be a Win Win Situation.

Most everyone wants to stay in their own home, Bought and paid for.

I imagine if you ever own a home when the time comes, you will want the same thing.

Another thought, If your MIL needs money and you decide you don't want to move in to save yourself money while at the same time helping MIL, then you might see if MIL would be Open to Renting out a Room to someone to get the extra cash she needs to make ends meet.

Lots of people Live Check to Check and on Credit Cards, and the Credit Card Co won't let you keep charging if you don't at least pay the minimum and your MIL only has a certain Limit she can Charge.

You're not in a predicament. Your mother is.

The only decision that's yours to make is whether you move in to her house and pay her rent, and share bills - which wouldn't cost you any extra, and would boost her currently reduced salary.

But I can't see your modest rent making much impression on a $200K debit balance either way. So if it otherwise suits you to move in, fine, go ahead; and if it doesn't then for heaven's sake don't - your mother won't be materially any worse off, it isn't as though you'll be letting her down in some way.

Who does she owe the money to? Have you broken that enormous sounding sum down? How much is secured on the house (i.e. mortgage) and how much is to credit card companies?

But I only ask these questions as a way of getting perspective on the pickle that *your* *mother* seems to be in. How does she feel about it, and is she actually asking you for help?

If she's agreeable, I suggest that you hire a financial advisor. Perhaps, her bank might have one for free.
Was your dad a veteran? If so, she may qualify for benefits. I suggest checking with VA.
Best wishes to you and Mom.

Since your mother is mentally competent, she can do as she pleases - and obviously is. Unfortunately, most people do not change their ways until they are forced to. Do NOT help her with this debt except to help her list her home for sale. She needs to learn to live within her means and if you help her, she will not.
She can talk to her bank about consolidation of her debts and creating a plan to pay them off. If she does sell her home and you let her live with you, make sure the sale of the house covers her debt before she moves in.

As her adult child, you are responsible to respect your mother... not to follow her into debt. If she needs help, make sure she buys essentials - food, medications, etc. Lend her a hand if she needs help getting her home ready to sell: cut grass, paint the house (with paint she buys), pack up boxes...

Everyone is assuming your mom made bad financial decisions. It sounds more to me like she has had some unexpected expenses and possibly has to support some of the care in the facility in Europe for her mom. You have mentioned she has refinanced her home a few times, is there really any equity left in the house to pay off bills. Filling for social security is not an option if her pay is above a certain limit, she will penalized. At 66 you can pull Social security without a work pay check limit/ and or penalty.

Sounds like she is a prime candidate to win the Nigerian lottery. Your best chance to correct the situation is to find someone she trusts to talk with her. Maybe Dr. Phil?

My mother was in a similar situation. At first I tried to help In several ways, but that was a disaster many times over. It was throwing good money after bad, and good energy and time wasted. She was very disorganized in her thinking but still competent. She made bad decisions throughout her life, so when dementia was setting in, no one noticed except me - and then I was the bad guy. I had to let the situation get to a crisis. I even called APS and they told me she was just fine. She ended up selling her house on her own at a loss. My mother would never listen to me and really was abusive.

if you have a good relationship with her then take her to a good elder care attorney. The reality is she doesn’t want to deal with the mess she’s made, so she’s waiting for God to help. My grandmother always told me that “there will be no miracles because God gave me common sense.” You will not inherit her house anyway because of her debt.

Do not enable this behavior. Do not move in. You can help by sticking to sound advice and a realistic plan and not being swayed by guilt or what “others might think.”

She needs to immediately get another job or file for social security. I would take her to some lovely senior apartments and show her "what could be". Also, keep the faith!