Helping parent with debt. Any suggestions?

Why are you paying her mortgage?

Why is the wait to see a legal advisor so long?

I think perhaps you need a financial website, rather than than a caregiving one.

Www.Bogleheads.org is a great place to get feedback on this sort of situation.

Lots of smart and financially astute folks.

I agree with Barb that we are no wise financial advisors here. I don't understand your having to wait that long, as well. They can attach her wages if she doesn't pay, but they cannot, unless I am mistaken, do so to her Social Security. I also think you should not make yourself responsible in any way for Mom's debts, house of otherwise. She may have a lien on her house eventually, in any case. She might want to consider selling it, moving to a small studio, and paying off her debts rather than do a bankruptcy. Please see a lawyer for some financial advice here before this becomes a bigger mess than currently it is. So sorry you are going through this.

There’s probably a wait because they can only help so many people at a time. It sounds like it’s legal aid or a legal service for people who can’t afford to pay.

Creditors cannot garnish her social security.
only the IRS can do that. She’s not in danger of having her wages attached, she’s been making the minimum payments due. Once she stops, she’ll be sent to collections and from there, it would go to court if they choose to sue her. It will take a long Time before there’s a court order to garnish her wages.

Do not pay her mortgage. If she has $2000 a month to live on, why on earth can she not pay her own mortgage?

If she has a house, what is her equity in it? Can she sell it, pay off here creditors and rent?

When you see posts here about people stopping paying cc, it is when they have no other assets. If you Mum has any equity in her home the CC companies can come after it.

Thanks for the feedback. the wait is for a legal aid service that is a free service. She lives in a tiny one room apartment and has no equity in it, probably owes a bit more than it is worth. She does need a place to live which is why I need to pay for it. She works full time at minimum wage. She has accrued CC debt which she simply cannot afford to pay back with her living expenses which is why I am going the bankruptcy route and doing it at the most minimal cost through a free legal aid service. I am surprised at some of the harsh responses here as I look for the best ways to help care for my 81 year old mother who has struggled her whole life and continues to struggle.

You may consider this harsh, but it's realistic.   Regardless of your financial circumstances, DO NOT use a free legal aid service to file bankruptcy.    My experience with them is that they have nowhere near the expertise for legal action of this kind.

Bankruptcy is a unique legal practice area; you need to be aware of a lot more than free services can provide.   And you and your mother could end up in a worse situation than when you started. 

You CAN get free legal advice from various agencies; there were many that were available during the last real estate crisis and recession; I don't know whether they're still operative or not.

Lighthouse Services is one group that reaches out to help people in need, and if I remember correctly, they also were offering free financial advice.    This was back during the last recession though.  And I have no experience with them so can't opine to their skills.

You might check local Senior Centers for free legal counseling.  Most have various attorneys visit weekly or bi-weekly with nominal advice.   Speaking with a practicing attorney could give you some better advice, now, instead of waitig until the limited free advice is available.

I have helped (NOT LEGAL ADVICE) a couple seniors decide and proceed through bankruptcy.

The first question is ... does she want to save the house? How much equity does she have? Go online to Nolo press.

https://www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy

you can find out how much she can protect in bankruptcy. I am sure she can meet the means test with that income...the issue is can she protect her assets. This is simple to look up

if the mortgage is not being paid...the bank will foreclose. Bankruptcy does NOT remove the mortgage it will only remove the legal obligation to pay...the bank can foreclose ... so consider if that is what is desired. She can affirm the mortgage and keep the house, but she has to pay the mortgage.

for 6 months before filing...any payments made to unsecured creditor (meaning...no assets to be repossessed) will be just throwing money away...because the trustee will just go take the money back.


go to this website to ask questions online in their forum...they have bankruptcy lawyers to answer your questions...and they are very good at explaining things ... so it is real help.

https://www.bkforum.com/

rmgetaway, I have to say I am not seeing any harsh responses, but perhaps I am tough skinned.
Can you clear up something. Above you say Mom has a mortgage she has to pay. In a response you said you are helping her pay because she is living in a tiny apartment.
So I am confused. Does Mom both own a home she is pay a mortgage on, and also paying rent on a small apartment? If this is the case, as I said below, a really good option would be to sell her home and keep the apartment. This means one rental and no mortgage. She would sell the home, pay off her creditors to the extent she is able and pay off the mortgage upon sale of the home. Wishing you good luck. Think all here are hoping to help or give good advice.