Hey guys, I'm reaching out on behalf of my parents. Let me tell you a little bit about them. They are and will always be horrible money managers. I was raised thinking we were poor. We were not poor, mom and dad just spent all the money. Now mom and dad make a combined $90,000 a year, but live totally paycheck to paycheck and a $200 unexpected expense will completely horrify them. There are all kinds of psychological reasons for why they are who they are, and two people with all these money hangups getting together has been kind of a disaster.
They went bankrupt in 1998. The housing situation was complicated, so I'm skipping it and jumping to the important bit. In 2006, mom and dad bought a house. Yep, when everything was crazy inflated. They paid $267,000 for a house that they might be able to sell for $180,000 today. They tried to do the special refi's and everything available from FHA and work with their mortgage company, but were told that they signed 2 days too late to do the special FHA refi and the mortgage company offers no programs to help.
They are barely treading water, and are not willing to make major life changes. They have lots of debt in the forms of cars, boats, and credit cards. Trust me, I've shouted until I'm blue in the face. They are of the "ignore it, and it will go away" persuasion. The house issue isn't going to fix itself, they need to fix it. They are not willing to look into it and I'm jumping in on the tail end here so I can at least tell them their options before they get kicked out of their home and have to live in my living room.
As far as I can tell, there are three options. 1) Short sale 2) Walk away 3) Bankrupt again. I doubt they will short sale because it's too difficult (not really up for challenges or hardship.) I guess what I'm really looking for are the consequences of option #2. What happens in Washington state if they walk away? Anyone know? I think if they could get in a cheaper housing situation they could still bleed money, but not worry about being without a house.
I thought about them renting it out, but the mortgage payment is so high that it's more than they could reasonably rent it for.
::sigh:: I don't know how to help them. My brother and I are both adults (though he still lives with them) so it's not like they have to worry about kids any more. I tried to talk to my mom about it today and she talked about dropping her health insurance ($300 a month) instead of, I don't know, CUTTING CABLE! Because her life is work and television. They blame each other for their money problems. Mom says it is dad's fault, and vice versa, and comes up with how she's worked 35 years for the same company and dad couldn't hold a job (which is true when they were first married, but dad's had steady work for over 20 years now) and he owe's her for that stressful time. BAH - parental money basket cases!
Anyone have anything to offer? I'd appreciate any feedback. Thanks guys!