Should I file bankruptcy for parents or explain my situation to creditors?

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My parent's have lots of credit and medical debts. They don't have any loans out nor any property except a paid-off car. They rent and pay their massive home health care bill. Luckily credit and medical debts are unsecured. They don't have a lot of disposable cash to hire an attorney and file for Chapter 7. I will have more time to look into pro bono lawyers and low income aid after I get out of school soon, but is it even worth it? I wrote to some collection agencies and creditors (don't worry, I did not give them my info) and explained their health issues and that it is a permanent situation. Haven't heard back yet. My dad has a massive term life policy of 500K my mom will get if he passes away. He hasn't been doing well, so I don't expect him to live for another 10 years. The policy premium will be reassessed in 9 or 10 years in which it will most likely sky rocket, which in that case I will cancel the policy (it's already really expensive). After taxes, I planned to use that money to pay off the debt (~30K worth) even though it will have gone unpaid for a long time. I've thought a lot about this. Either way no one is going to get paid. Rent, insurance, groceries, and utilities bills are my number one priority for use of funds as those are necessary for quality of life. My mom needs a lot of adult diapers and other medical supplies for her home health girls which effectively doubles the cost of a normal walmart trip. Even if through bankruptcy a debt-payment plan is set up, it is impossible that my parent's will have enough leftover cash each month to pay everything back in a reasonable time. Have you done a bankruptcy for your folks or did you just beg the creditors to have some mercy?

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So dads 500k term life, have you looked into a “settlement” on it?
Not the usual JGWentworth life settlement but a speciality viatical settlement so it’s sold to an 3rd party investor.
He’s not in good shape, right? So not to sounds harsh but he could die soon? Like maybe die next year or so?
Can folks actually pay his upcoming premiums for another couple of years?

Normally life settlement is a bad terrible idea as the payout is beyond lousy. But most term policies are way way under 100k, written on folks healthy so buyers not getting a big payout at some forever later date in time. Not worth buying. So policy holder not in a good negotiation position.

But your parents imo are in a quite different situation. It’s 500k and if dad is likely to die soon, like very soon, so whomever buys dads policy gets their payout quickly. If dads medical records clearly show illness beyond significant and death likely soon, he could get a better payout from a viatical settlement sold to an investor. Not one of the life settlement companies (like Wentworth) but to investor. Yeah it’s kinda creepy idea but folks do invest in these. Less risk for them = better payout to dad.

Personally if I was me I would NOT try to DIY this but get a viatical settlement broker to do it..... basically the broker for a % has the ability to negotiate and get bids on dads policy. You would need to carefully shop around for the broker though. You might want to get onto cancer or AIDS blogs/boards to find names of brokers.

7 Bankruptcy for 30k doesn’t make sense to me. It’s pretty low debt. Plus even if it’s wiped clean, debt starts up afresh as they have existing & continuous horrendous medical costs.

Remember for those clearly dying, & can file documentation to support that, it’s called a viatical settlement & $ is not taxable income too.
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