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 Post subject: Re: Parents financially strapped...
PostPosted: Thu Apr 12, 2012 9:33 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1627
Location: Seattle, WA
kaitlyn142 wrote:
My rule is that I will not allow my parents to be homeless, cold, or hungry. Everything else is their deal.


The only problem is if they figure out that you will cover their rent, electricity, and food; they can then spend all their money on other things, and let you cover their basics. Of course there are still ways around that. For instance, providing the essentials but in a limited/undesirable way - e.g. paying rent but only on a rented room in a shared house; providing food but only bland staples.


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 Post subject: Re: Parents financially strapped...
PostPosted: Thu Apr 12, 2012 1:37 pm 
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stannius wrote:
kaitlyn142 wrote:
My rule is that I will not allow my parents to be homeless, cold, or hungry. Everything else is their deal.


The only problem is if they figure out that you will cover their rent, electricity, and food; they can then spend all their money on other things, and let you cover their basics. Of course there are still ways around that. For instance, providing the essentials but in a limited/undesirable way - e.g. paying rent but only on a rented room in a shared house; providing food but only bland staples.


Not really replying directly to what Kaitlyn said...

But I agree with Stannius. If I had to help people out I would never make it easy on them. I think keeping someone from being homeless, cold, and hungry is fine but they don't need a mansion, a hot tub, and caviar. The most I'd ever pay for is a rented room, a few old blankets, and beans and rice.


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 Post subject: Re: Parents financially strapped...
PostPosted: Fri Apr 13, 2012 4:15 am 

Joined: Sat Jul 11, 2009 10:59 am
Posts: 255
stannius wrote:
kaitlyn142 wrote:
My rule is that I will not allow my parents to be homeless, cold, or hungry. Everything else is their deal.


The only problem is if they figure out that you will cover their rent, electricity, and food; they can then spend all their money on other things, and let you cover their basics. Of course there are still ways around that. For instance, providing the essentials but in a limited/undesirable way - e.g. paying rent but only on a rented room in a shared house; providing food but only bland staples.



I agree with that, absolutely. If my mother were to lose her house again, she could come live with me, not that I would help pay her mortgage. If my ILs need money, I'll help them get their house into good enough condition to put it on the market.I have no interest in being my family's bank anymore because I seem to be the one person who learned that nice clothes are good, but being financially stable is better.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 8:17 am 
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stannius wrote:
kaitlyn142 wrote:
My rule is that I will not allow my parents to be homeless, cold, or hungry. Everything else is their deal.


The only problem is if they figure out that you will cover their rent, electricity, and food; they can then spend all their money on other things, and let you cover their basics. Of course there are still ways around that. For instance, providing the essentials but in a limited/undesirable way - e.g. paying rent but only on a rented room in a shared house; providing food but only bland staples.


I have a life-long friend, Tony, that went through a very bad divorce when his daughter was about 7. His finances spiraled out of control as his wife took everything (including the house and maxed out his credit cards) and stuck him with 20% of his three figure salary for child support. This resulted in him not being able to pay taxes (or not choosing to), not being able to pay speeding tickets, and eventually losing his driver’s license. He was in a bad place. Because these terms (the 20% of his salary at the time of the divorce) were in the divorce decree he was unable to change the figure he owed monthly (tried it two times in the courts) and had to wait it out until his daughter was 18.

He went from bad to worse when he was laid off from work at the firm that paid him three figures. Then he came to work with me. A few years later he was kicked out of his apartment. Finally, after living in his vehicle for a year (the vehicle enventually broke down) he ended up at an apartment 20 min walk from where we worked together. He has been walking to work or taking the bus (transferred to a different location within the same company) for over 5 years now. I didn't put myself in financial hardship but made sacrifices to help him when I was single (groceries, helping him with bills as I could, etc.). He is finally stable after 12 years since the divorce. Yet he continues to make bad decisions.

He slept on the floor for a year so we saved up and helped him get a futon/sofa bed. He always was hungry so we'd try to help every now and then with groceries and bills. In the meantime I got married and we had one child. I realize now I should've created a very structured plan with him based on milestones/achievements instead of just handouts. For about a year now I haven't helped him financially and he seems to be making it on his own. I stuck my neck out for him twice and saved his job at the place we worked at. I know he is grateful to a degree.

He is horrible with money management and often gets taken advantage of by the apartment complex he rents from. He also still owes back taxes, has no vehicle, and still needs to sort out paying for speeding tickets to get his driver’s license back. He has suggested I buy a vehicle (say a 2000 Civic or Corolla) and sell it to him. He has also suggested I cosign for him which I admit (to his face in fact) I will not do. Yet he doesn’t listen when I tell him about Dave Ramsey, Crown Financial, or other debt reduction programs. It’s just frustrating.

Since this thread seems to be a similar situations thought I'd ask. Any thoughts on how I could help him now? Thanks in advance.

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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 11:02 am 

Joined: Mon Nov 01, 2010 5:15 pm
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Quote:
Any thoughts on how I could help him now?

You can't help someone who won't help themselves.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 11:24 am 
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Eagle wrote:
I have a life-long friend... Yet he doesn’t listen when I tell him about Dave Ramsey, Crown Financial, or other debt reduction programs. It’s just frustrating.


Never heard of Crown Financial so I googled them. What a complete joke! I fail to see their qualifications. And Dave, Ramsey, puhlease!

Go to religion to comfort you if that's what you need. It's not a solution to bad life/financial decisions. He needs education!

Your friend is a deadbeat. He got himself into the situation. His wife might have dumped him because he is a loser. Above all else I don't understand why trying to get his child support reduced is a good thing. Why would you support him taking money away from his kids?


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 1:45 pm 

Joined: Fri Sep 12, 2008 12:29 pm
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Location: Seattle, WA
It's good that you stopped helping him. Maybe you should make it clearer so he stops asking. Tell him explicitly (to his face) that you have your own family to take care of now. He'll be all right.

Never ever ever co-sign a car loan. Ever. For any reason. For any person. If you want to help someone close to you, give them the money yourself, or take out the loan in your own name and have them pay you.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:05 pm 
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DoingHomework wrote:
Eagle wrote:
I have a life-long friend... Yet he doesn’t listen when I tell him about Dave Ramsey, Crown Financial, or other debt reduction programs. It’s just frustrating.


Never heard of Crown Financial so I googled them. What a complete joke! I fail to see their qualifications. And Dave, Ramsey, puhlease!

Go to religion to comfort you if that's what you need. It's not a solution to bad life/financial decisions. He needs education!


I'm not sure I appreciate the tone of this message but I will try to respond in cordial manner addressing the issue at hand. Usually I agree with your logic doinghomework. In fact from what I’ve read you, doinghomework, are one of the better minds on these forums. Not sure if this was just a bad day or what.

I noticed a similar tone when doinghomework responded on Feb 22, 2012 2:21pm to a comment in this thread by stannius. Perhaps this topic hits a nerve as seen below.

DoingHomework wrote:
Perhaps my initial cynicism in my response was because I am also in a similar situation and always have been, well at least since around college.


Both Financial Peace and Crown Financial have helped lots of people get out of debt. I know this from personal experience. I used Financial Peace to help me better understand budgeting, reduce my debt with the “debt snowball strategy”, and having the freedom to live debt free. I went from being thousands of dollars in debt to being debt free. So it is a valid system. Just not for everyone. I just mentioned Crown Financial because I'd heard of it before. Please specify which program you have used or recommend.

I'm looking for constructive feedback not a beat down. Nor am I interested in a debate about religion.

We may agree to disagree on religion. My roommate in college and I disagreed on many issues but we still got along. People do every day. Different isn't always better or worse. It is just different. The topic of this thread is what to do with a financially strapped person you care for.

DoingHomework wrote:
Your friend is a deadbeat. He got himself into the situation. His wife might have dumped him because he is a loser. Above all else I don't understand why trying to get his child support reduced is a good thing. Why would you support him taking money away from his kids?


Once again this is not a helpful paragraph. I know my friend made mistakes. But he is not a looser. He made over 100k a year at a fortune 500 company and worked there for almost 20 years. Understand that his wife was just as much to blame as he was. Maybe even more so. It takes two to tango. She spent both his and her paychecks, she lived beyond their means to impress family/friends, she tried to control all aspects of his life (she handled the finances), maxed out the credit cards in his name while maintaining her credit cards with no balances, and she ended up cleaning out what was left of their mutual savings accounts.

As to the reason why he tried to reduce his child support. is his wife made over 100k a year as well. He was living off of 25k a year. Yet she was receiving $700 a month of his $1500 paycheck. Do the math. He couldn’t even support himself with basic necessities. She had the house he paid for. He gave it up for his little girl to have a good home to grow up in. Plus he got stuck with all the credit card debt which she charged. I hope that sheds some light on the matter.

Suggestions: I’ve suggested he declare bankruptcy now that his daughter is full grown and has a full athletic scholarship to a great university. As I understand it he would need to have about $1500-2000 to get a lawyer to process the bankruptcy.

Anyone else have other suggestion and/or constructive feedback?

_________________
~ Eagle


Last edited by Eagle on Tue May 29, 2012 5:25 pm, edited 1 time in total.

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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:18 pm 
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stannius wrote:
It's good that you stopped helping him. Maybe you should make it clearer so he stops asking. Tell him explicitly (to his face) that you have your own family to take care of now. He'll be all right.

Never ever ever co-sign a car loan. Ever. For any reason. For any person. If you want to help someone close to you, give them the money yourself, or take out the loan in your own name and have them pay you.


Thanks stannius for the advice. I told him that I would no longer be able to help him financially (free gifts, etc.) about 6 months ago. I just feel sorry for the guy. And it wouldn't really hurt my family to buy a cheap ($3000-$4000) durable vehicle and sell it to him. We could always resell the vehicle to someone else. We have the cash above and beyond our emergency funds & other savings.

I agree about the co-signing. The issue I've discussed with my wife is buying the vehicle in our name would be the title would be in our name. Wouldn't that mean that we could be sued in the event he got into an accident?

I've suggested a bankrupcy to him. Not sure how all that works though.

Thanks again.

_________________
~ Eagle


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:30 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1201
Quote:
Suggestions: I’ve suggested he declare bankruptcy now that his daughter is full grown and has a full athletic scholarship to a great university. As I understand it he would need to have about $1500-2000 to get a lawyer to process the bankruptcy.

I wouldn't advise bankruptcy. The taxes & speeding tickets aren't bankruptable. All he has is some credit card debt that could be erased. Since it was most likely joint accounts, then I suspect both he & ex-wife would have to file in order to extinguish the credit card debt.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:37 pm 

Joined: Mon Nov 01, 2010 5:15 pm
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Quote:
I just feel sorry for the guy.

This is your first mistake.

Quote:
Wouldn't that mean that we could be sued in the event he got into an accident?

It depends but probably yes. The auto insurance company would be the first to be sued but since he probably couldn't afford insurance or would let it lapse, then you get sued.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:42 pm 
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Tightwad wrote:
Quote:
Suggestions: I’ve suggested he declare bankruptcy now that his daughter is full grown and has a full athletic scholarship to a great university. As I understand it he would need to have about $1500-2000 to get a lawyer to process the bankruptcy.


I wouldn't advise bankruptcy. The taxes & speeding tickets aren't bankruptable. All he has is some credit card debt that could be erased. Since it was most likely joint accounts, then I suspect both he & ex-wife would have to file in order to extinguish the credit card debt.


Yeah I see your point. Death and taxes right? The credit card debt that was bad was in his name only. The joint credit cards were paid off during the divorce process. Hers had a 0 balance. Most places don't even check ID anymore. She used his signature or bought stuff online. Wasn't pretty.

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~ Eagle


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 5:56 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1201
Eagle wrote:
Tightwad wrote:
Quote:
Suggestions: I’ve suggested he declare bankruptcy now that his daughter is full grown and has a full athletic scholarship to a great university. As I understand it he would need to have about $1500-2000 to get a lawyer to process the bankruptcy.


I wouldn't advise bankruptcy. The taxes & speeding tickets aren't bankruptable. All he has is some credit card debt that could be erased. Since it was most likely joint accounts, then I suspect both he & ex-wife would have to file in order to extinguish the credit card debt.


Yeah I see your point. Death and taxes right? The credit card debt that was bad was in his name only. The joint credit cards were paid off during the divorce process. Hers had a 0 balance. Most places don't even check ID anymore. She used his signature or bought stuff online. Wasn't pretty.

Then he might have recourse against the credit card companies since he didn't sign for those debts.


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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 6:06 pm 
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Tightwad wrote:
Eagle wrote:
Tightwad wrote:

I wouldn't advise bankruptcy. The taxes & speeding tickets aren't bankruptable. All he has is some credit card debt that could be erased. Since it was most likely joint accounts, then I suspect both he & ex-wife would have to file in order to extinguish the credit card debt.


Yeah I see your point. Death and taxes right? The credit card debt that was bad was in his name only. The joint credit cards were paid off during the divorce process. Hers had a 0 balance. Most places don't even check ID anymore. She used his signature or bought stuff online. Wasn't pretty.


Then he might have recourse against the credit card companies since he didn't sign for those debts.


Isn't there a statute of limitations. This was over a decade ago. She would use his signature for a variety of reasons. Needless to say it was a messy divorce. And he has no proof of it in any case. Her word against his.

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 Post subject: Re: Parents financially strapped...
PostPosted: Tue May 29, 2012 6:42 pm 

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Eagle wrote:
Isn't there a statute of limitations. This was over a decade ago. She would use his signature for a variety of reasons. Needless to say it was a messy divorce. And he has no proof of it in any case. Her word against his.

As long as the debt is still owed, the lender can still try to collect but the SOL to sue for the outstanding debt may have already expired...at least that's my understanding. You'd have to check the state usury laws to be certain. However, if your friend has recycled the debt in some way such as making payments, settlements, debt modifications, etc then the SOL clock usually gets reset.

You mean he's dragged this credit card debt around for 10+ years? Wow.


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