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?

Tell your Mom how much you love her but worry about her and her financial insecurity. Your Mom is drowning in debt. Ask her to stop using the credit cards unless she can pay them off each month.  Is the house in good enough condition or large enough that she could rent out a room? That would sure help to pay down her bills. If she doesn’t control her spending habits, she could lose the house and have nothing left. It would be better to sell rather than have that happen. You said that if she sells her house she could pay her debts and live comfortably. That means that even with the mortgages, she must have a good amount of equity.  Buying a smaller, more affordable home might be cost effective.

Something else to think of: 
She wants to leave something for you, but she also may be afraid of being forgotten. There are other things that she could leave besides love and memories. Has the family taken lots of photographs and video over the years?  Help your Mom get these organized and put on disk.  Has your Mom or other family members put together a family history or done any genealogy. Get her to record and write down all her memories. Interview her by asking questions provided by some genealogy websites. Your Mom would be leaving a tremendous legacy and will also know that she will not be forgotten.
I also plan to leave my home to my children and grandchildren. They would not want to move here to live as they have jobs elsewhere. They could rent out the house for the income or they could sell it to help put the grandchildren through college. Or they could take the vacation of a lifetime. 
I suppose none of us wants to be forgotten, we seem to have an internal need to let it be known that we were here. That we lived.  My family will have many photos, videos and genealogical records that I’m leaving for them.

As in Beyonce’s – “I Was Here” lyrics:
I want to leave my footprints on the sand of time.
Know there was something that, something that I left behind.
When I leave this world, I'll leave no regrets.
Leave something to remember, so they won't forget.
 
Good luck to you, your brother, and your mother.

Is it possible she is in the early stages of dementia? I am facing the same exact situation with my sister. She commits to going to assisted living, then changed her mind at the last minute because she doesn’t want to get rid of any of her belongings. After many falls, she was hospitalized and a diagnosis was made. One of the symptoms is poor financial decisions. Good luck! I know my stomach stays in knots.

There is not a whole lot you can do. I am assuming your mother-in-law is a competent adult. She is entitled to f*** her life if she wants to. Be sure that you and her son don't co-sign on any of her foolishness. because unless you are a co-signer on a loan, you will not be responsible for any of her debts. Don't pay her bills. Don't rescue her.

If you suspect that she may be incompetent, than you need to struggle with how to get her evaluated medically

It’s painful when we see a loved one making choices we disagree with.

As long as your Mom is of sound mind, however, this is not your business. You have advised her (thst is all you can do) she has heard opinions of bankers, financial advisors, etc. Be there to support and love her when she makes good decisions and bad ones.

Come to peace with this situation.

IMO, she needs to sell the house and settle the debts. Leaving the house to her kids would mean they are saddled with an asset against which there are debts, and perhaps little value beyond that (the basement repair for which she could not get full bank financing tells me she's a bad credit risk, the house is not worth that much, and that there has been significant deferred maintenance which most often leads to a cascade of expensive repairs.)

I'd go with her to a bankruptcy attorney for a free initial consultation to get some information on her best options.

Sunshine, you sound like the most wonderful daughter. If anyone tries to tell you a 'good daughter' would pay Mom's bills, I would ignore them. You are trying to help her, not enable the problem.

I found when faced with some hard issues my family had denial over (medical) that involving a third party could be very useful. Would there be a person who counsels in your Mother's faith? You don't have to air the dirty laundry or cause shame - but some prior wording them up that feelings surrounding a financial matter would benefit. Invite this person over for afternoon tea, introduce them & they hopefully will gain your Mother's trust. It may lead to a financial councillor recommendation who could assist with the actual financial matters.

Sort of like a soft, supportive version of an intervention.

There is a chance that your mother can never pay off this debt. It may depend on the value of the house. Many creditors will compromise to take less of a debt which is virtually unrecoverable, which might make it add up. A financial advisor will help to consolidate credit card debt, but ask carefully as some of them do NOT give good advice.

If not, then your mother will eventually be made bankrupt. The house will be sold but she will be able to keep most of her personal possessions – look up bankruptcy rules in your state to find out what. Bankruptcy gives a fresh start, and even for older people it takes away a huge burden of worry. Financial counselors rarely recommend bankruptcy because they don’t make any money out of it themselves, but it can be the best option.

Stop paddling mother’s canoe, it isn’t going anywhere – it’s sinking.

It would tell her that it isn’t God’s responsibility to bail her out. She must take action. She may need to file for bankruptcy.

I admire her faith but I hope that she doesn’t belong to a “prosperity gospel” church where she is “sewing a seed” in other words, making a pastor rich while she is getting poorer because the church teaches that she will get her money back ten fold.

These types of preachers are all over television too! They prey on the vulnerability of others. It’s good to be charitable but not to people who take advantage of others.

You have said your piece. What else can you do? She knows what is necessary but it is hard for her to let go of her material belongings.

It’s a very sad dilemma. I am so sorry that you are struggling with this awful situation.

By the way, it isn't beyond God's help, but she is being presumptious. Hope she doesn't lose her faith when He doesn't pay it all off because it wasn't His idea....

I would kindly explain that it will take courage to face the situation she is in, but you will walk beside her.

If she can grown to accept her situation, then she can make a roadmap out. This may well be downsizing to clear debt.

"..that some miracle will happen and everything will work out". She does not have to lose faith or hope, but I think more useful to have ACTIVE HOPE. Where she can actively take steps towards a new hopeful phase in her life.

I think her thoughts surrounding "leave it for her kids" speak volumes.

She may be thinking to leave you the house = will ensure you are left financially stable? Or shows how much she loves you? Ask her. The reality is you both have homes already so the house would become a business (or even burden) to rent out. You don't have to mention that... You could acknowledge her generousity in wanting to leave you the house. Tell her how proud you are she bought it. You will be even more proud & happy if she can accept change in these very tough times, work together & change direction as required.

You aren't being insensitive at all. But I think that this amounts to a whole lot of decisions building up one upon the other into something that is pretty mountainous. I don't really know what you could do to help, and the chaotic financial things could reflect on a chaos within that would have an affect on you. I would stay kindly supportive, as you have been, but keep protective boundaries for yourself. I am certain she is overwhelmed and unable to know where to begin. Even minimum payments on this kind of debt must be almost impossible to come up with.
I think I wouldn't give much financial advice, because if things continue in this manner you don't want to be blamed (without cause or reason) for outcomes in future. Just be gently there to listen, and be as supportive as you can.

You're not being insensitive, and you can't help someone who won't help themselves. You say you make your position clear to her, so time to take a step back and let the inevitable happen.

I'd highly advise against moving in with her, or having her move in with you as that would likely just reinforce/further enable her poor financial decisions.