Ugh - here's an unexpected expense for you

[Bigote]

Visiting in-laws today. 

FIL pulls me aside, tells me they're months behind on their bills, including property tax, and the town is about to put a lien on their house.  Come to find out they have 30k in credit card debt, 100k+ in a HELOC and unpaid medical bills.   Almost no assets save a bit more home equity, and income is just social security and a teeny tiny pension (like 100/mo or something).   He says he has no idea what to do - they're getting on in years (late 70s), MIL has dementia.    Both have had a lot of medical expenses this year, especially her.

Look, I say, we will help.

He says he has until Friday to pay the town 8k or go to some hearing.  Ugh.   Asks me for 25k, so he can catch back up on other stuff too.   

So Monday I'll be wiring him 25k.  Bigger question is what to do after, as it's likely they need some intervention in decision making as well.

So why do I post this here?    Partly because I want to vent and here it's anonymous.  But also to point out that it's hard to predict what expenses you may face as your parents age.  Sure I could refuse to help but that's not realistic.  We will insert ourselves in the management of their affairs, however.   (Though DW will have to take the lead on that...)

[swick]

Ouch, unfortunate situation to be in :(

Your in-laws are at the point where you need to step in. It is very clear they are unable to manage their own money and asking for extra to "get caught up on things" gives you no assurances that the money will be used most effectively, it might be that they will spend it on whoever is complaining loudest, instead of where it really needs to be.

You and your wife need to sit down together stat and organize a plan that you are both on board with, including how much you are willing to help and how it should best be done.

They might be so stressed and at the point they would welcome you to come in and help them sort everything out. The unpaid medical bills might be able to be negotiated, but with that much debt, at this point in their lives, it would be worth it to at least find out if bankruptcy might be an option.

Sorry you have to go through this.

[MKinVA]

ouch. I think you and your wife need to talk about this. First, so what if there is a lien on the house? It usually takes municipalities years before they sell the house out from under him. Also, at their age and income level, there may be a discount on property taxes available. Find out about that before you pay anything toward that debt.

Next, sell the house unless this is absolutely the cheapest place they can live. Is your MIL in need of nursing home at this point? Because let me tell you something, better to be poor going into that situation. We paid around $6000 a month for my MIL in alzheimer's unit and the lady across the hall got the same care, same room, everything under Medicaid. There is no difference. Also, more her into assisted living before she needs alzheimer's care, if possible. It will guarantee you a spot. That's the difficulty in medicaid beds. Getting in.

Really consider which bills have to be paid. Keeping the lights, heat, and food on the table is about it. What are the creditor's going to do about the rest? Ruin their credit rating?

[Apocalyptica602]

Sorry to hear OP.

It does look like they'll need some help cutting back.

With that kind of sum you're fully justified taking a firm stance on the management of their affairs. Although I'd caution you that while they may seem overwhelmingly grateful for your 25k (rightly so!) they might become defensive or push back once you start to say even simple things like 'no more eating out' (let alone 'maybe you should downsize your house or sell one of the cars)

You might feel particularly guilty if they say something like 'but we don't know how much time we have left so we don't want to deprive ourselves'

With just social security and a small pension and what sounds like a negative net worth, are there any assistance programs they could qualify for? SNAP, Medicaid etc? I'm not very well versed in that stuff and I know my late grandparents would have been too proud even if they qualified, but still.

Also, like others have already said, you and your wife should hash out a plan. Recently a family member of mine became insolvent and proven incapable of managing his money, he started borrowing from various family members / neighbors / friends and always borrowed from someone else to pay the other.

Even a $3,000 'bail out' from his sister disappeared and before long he was asking for help again. Ultimately my cousin essentially had to 'take away' his pay checks, pay all his bills and put him on an 'allowance'. Truly a sad thing.

Not trying to scare you, but just make sure you and your wife are in total agreement and are very open and clear with your in-laws

[Frankies Girl]

I wouldn't give them the money directly. I'd ask them for the payment info and pay the bills yourself. Giving them money is a bad idea as they've shown that they are horrible managing it.

Frankly, I'd question your FIL's mental facilities as well to have so much going so wrong - this had to be in the works for well over a year for it to get to this point. But if your MIL is pretty far gone, then it would be a good idea to meet with her doctors and figure out about putting her in a facility where she will be safe and well cared for. In some cases, there would be a place that would allow your FIL to go with her and have a sort of apartment-like room, but that's a scary step probably and he might not want that kind of intervention, but should definitely be discussed AFTER discussing with the doctors.

I would then sit down with them and go through their budget and try to help them work out something that will work for them. It may mean moving them to an apartment near you (sell the house to pay off extended debt or at least stop sinking money into a lost cause, no maintenance costs for a home any more). I would definitely look into senior living facilities near you - doesn't have to be nursing homes, but smaller apartments that have been made to allow seniors to live as independently as possible while still having the options for physical activities, therapists and onsite facilities. I don't think they will take anyone that has dementia, tho. My dad was in one of these and while he also paid extra for a round the clock caregiver to sit with him and assist with walking/bathing/bathroom activities, it was really nice. At the very least, a nice apartment where they could have some independence and still be closer to you for help, and cost less overall would make a whole lot of sense. Or they could move in with you, but that's one step I wouldn't take myself, so can't say anything about anyone else taking that on.

There's also the issue of the credit. If your MIL has dementia and is spending gobs of money (not sure if this is the case, but it might be) then cancelling all the credit, putting a credit freeze as well (so they won't be able to open new credit) and giving them cash to live on for spending money and you and your wife handling the bills themselves would be a good idea too. You may also be looking at taking on a power of attorney and such.

It would depend on how your FIL feels about being basically dependent on his child (and you) for the rest of his foreseeable life, but in the circumstances, I think you should (as nicely and kindly as possible) tell him that this is really the only way you can help them and make sure they're taken care of. The fact that they have no funds, their house has a lien and will be taken away and his wife has dementia... I think he's reached the point where he also is unable to take care of himself any more (might be suffering from some age-related mental fogs himself to get so far into trouble), so offering him a bit of money isn't going to make this problem go away, and it could get so much worse if he doesn't have someone intervene and take control of the situation.

Totally sucks and I do wish you the best tho.

[daverobev]

Christ that's horrible.

I would say - they need to go bankrupt, then (if it's possible?) move in with you or something, and get govt assistance. Because it sounds like they'll never get out of the hole they are in. Otherwise they'll pull you down with them.

But, of course, IANAL.

Good luck with it all.

[msilenus]

I'm expecting to wind up in a similar situation eventually, so I've been thinking through and researching how to handle it.  Maybe you'll find some of this useful:

My goals will be to keep them comfortable, keep them in their house, and protect my own family from the fallout as much as possible.  Toward that end, I would not wire them that money on Monday.  I would take the day off work -this is a family emergency- and visit a bankruptcy attorney with FIL.  (You might also be interested in some kind of elder care councilor because of your MIL's situation.)  The bankruptcy attorney would be able to advise on the exact significance of that hearing, and help you plan a strategy around discharging the maximum amount of debt.  Note also that bankruptcy puts them in credit jail.  That could be a good thing.

In my state (California) there is a small homestead exemption on home equity.  They would be able to keep that in bankruptcy.  My concern with wiring them money right away is that it could wind up reducing their need for debt discharge as a bankruptcy proceeds.  Personally, I'm not thrilled about the prospect of bailing out my in-laws, but I'll do it.  They're family.  I will do everything in my power to avoid bailing out their creditors.  Discharge as much debt as possible first.  Then write checks.

Well, even before writing checks, I'd look into getting them on as many different kinds of necessary aid as possible.  They paid taxes for decades to build our meager safety net, so there's no shame in drawing on it.  Medicaid is a no-brainer in your in-laws' situation (and taking money from you right away could make it harder to qualify --again: I'd speak to someone in elder care.)  Being mostly dependent on social security and with medical expenses, they likely qualify for SNAP.[1]  I'd also try to find out if there's any way to take advantage of Section 8 (would they move? is there a way to tap housing vouchers for mortgage payments?)

With debt discharged and with the safety net taking care of as much as possible, then we'd look at what's left.  They'll probably still need help to stay in the house, and we'll help with that.  If a bankruptcy happened they'd be in credit jail, but we'd still have a talk about credit cards right away.  An important goal for me would be avoiding the situation where our money is creating headroom in their finances for them to run up big credit card balances years later.  My earnest hope would be that credit jail would give them time to permanently re-adjust their habits, but I'd also run credit checks occasionally to be sure.  (YMMV.)

Anyway, your situation sucks.  I'm sorry you're in it.  I hope some of that is useful, and that you'll keep us up to date on how things play out.  Good luck.

[1] This seems to have a lot of great information on SNAP eligibility:
http://www.ncoa.org/assets/files/pdf/center-for-benefits/SNAP-details.pdf

[totoro]

I would say this situation needs your time more than your money right now.  Figure out a short and long-term plan first.  That $25,000 could probably be used in a way that benefits them and you to a much greater degree than what you are planning to do on Monday if you really understand what the options are.  FYI, the house will not be sold out from under them to pay taxes without numerous opportunities to redeem.

[bogart]

Visiting in-laws today. 

FIL pulls me aside, tells me they're months behind on their bills, including property tax, and the town is about to put a lien on their house.  Come to find out they have 30k in credit card debt, 100k+ in a HELOC and unpaid medical bills.   Almost no assets save a bit more home equity, and income is just social security and a teeny tiny pension (like 100/mo or something).   He says he has no idea what to do - they're getting on in years (late 70s), MIL has dementia.    Both have had a lot of medical expenses this year, especially her.

I'm sorry you and your in-laws are needing to navigate these difficult circumstances.  Although some other posters have criticized your ILs and I'm sure with hindsight it's easy to find things they might have done better/differently, without knowing more about their backgrounds, resources, and circumstances I can't really tell whether they've behaved "irresponsibly" or not.  I think it's easy for younger generations to forget the extent to which the earlier system was one whereby if you "played by the rules" it was supposed to take care of you. 

That said, it does seem like the big issue is what to do now.  Do they live anywhere near you, or other family?  How bad is your MIL's dementia, and how capable/willing is her DH to care for her?

Background (in case you don't know):  Medicare is government-provided or -subsidized health care for those 65+, is (basically) not means-tested, and is pretty much standard across the US.  Medicaid is for the poor, including poor elderly, is means-tested, and varies significantly across the states.  Moreover, ironically, married couples are often (relatively) worse off seeking Medicaid assistance if it's needed for one of them due to high medical expenses, because (basically) both must be pretty poor for either to qualify.  Only Medicaid, but not Medicare, will cover the costs of long-term care e.g. in a nursing home for dementia. 

(My dad has dementia and lives a nursing home thanks to Medicaid.  It's not great, but it is an option.  But as I say, harder in many states for 1/2 a married couple.) 

Count me among those who think that sending money may be throwing it down a sinkhole and isn't something you "should" do (something that you can reasonably believe will help) until you have more information.  But at the same time I recognize how difficult this sort of thing is to deal with and empathize with the difficult decisions you are needing to make.  Good luck sorting it out and helping your ILs ensure a reasonable quality of life as they age.

[2527]

Can you get into a heaven with a bad credit score?

The jackasses who loaned elderly people with very little income that much money deserve to be defaulted on. 

[Another Reader]

This sounds like a matter that should be discussed with your wife's siblings, if there are any.  In your shoes, I would have a conversation between you and your wife and each of her siblings to determine exactly what has happened and what their feelings are about how to approach the problem.  If any of them live close by the parents, they may be able to fill you in on the details.  It may not be physically possible, but a family meeting, even by Skype, may help.

This being the end of the year, you might have difficulty getting the time to spend with the in-laws immediately.  I might talk to your FIL and get his permission to talk to the taxing jurisdiction.  It may be possible to delay the hearing with a reasonable explanation and a promise of the family stepping in to take care of the matter.  I would not wire him money on Monday and I would let him know that ASAP.  I would ask him instead to meet with you and your wife and her siblings to discuss a long range plan.  Your MIL's dementia will become too much for him to handle alone, if it hasn't already.  I would let him know the family will help, but there has to be a plan.

The best financial option for them will not be known until all the information is gathered.  It's a positive step that he felt comfortable enough to discuss his financial situation with you.  Gathering all the paperwork and sitting down with you and possibly your wife and her siblings is the next step.

Men generally won't ask for help.  When my mother was diagnosed with terminal cancer, my father tried to do everything himself.  Eventually the hospital social worker became involved and set up overnight home care.  Visiting nurses and hospice workers came and helped with her care during the day.  Being able to let go of the constant responsibility for a less than functional person was a big relief to him.  My guess is that getting help for your MIL will grant some relief to your FIL so he can do a better job of piecing together the financial puzzle.

[Zamboni]

This must be very difficult for all involved.

I have not much to add here except my sympathy, and another voice saying that giving them some money now might plug a small hole and build good will with them, but it probably won't solve the problems.  They clearly need your help in navigating these unfamiliar waters.

[Sunny]

I'm sorry to hear of these developments.  I had a sibling with financial issues and I while we helped while they had kids, it got to the point that I stopped because they refused to follow advice on how to handle their finances.

On a separate note, please consider the possibility that your in laws are being taken advantage of by scumbags that prey on older folks via telephone.   For example, one common call is that you've won a contest but they need your credit card number to validate the prize.   

[Daleth]

On a separate note, please consider the possibility that your in laws are being taken advantage of by scumbags that prey on older folks via telephone.   For example, one common call is that you've won a contest but they need your credit card number to validate the prize.

That reminds me, not an issue in this case, but I hope everyone here is aware that there are scumbag collection agencies that hound survivors for the debts of their dead loved ones--debts that died with the loved one, by the way.

In other words they troll obituary pages to find the names of survivors, call the (for example) widow and tell her that her husband owed them $x and they're so sorry he passed and they're willing to "help" the widow by setting her up in a special payment plan to pay off the $x in debt... what they don't mention, of course, is that if the husband was the only person on the loan, the debt died with him and the widow does NOT owe a dime. (Or to be exact, the debt should've been paid from his estate, but if it wasn't, it does NOT get transferred to his survivors--they have no legal obligation to pay it and the creditor is just trying to take advantage of their ignorance and grief).

Just something for those of us with elderly loved ones to be aware of.

[CommonCents]

Background (in case you don't know):  Medicare is government-provided or -subsidized health care for those 65+, is (basically) not means-tested, and is pretty much standard across the US.  Medicaid is for the poor, including poor elderly, is means-tested, and varies significantly across the states.  Moreover, ironically, married couples are often (relatively) worse off seeking Medicaid assistance if it's needed for one of them due to high medical expenses, because (basically) both must be pretty poor for either to qualify.  Only Medicaid, but not Medicare, will cover the costs of long-term care e.g. in a nursing home for dementia. 

(My dad has dementia and lives a nursing home thanks to Medicaid.  It's not great, but it is an option.  But as I say, harder in many states for 1/2 a married couple.) 

Agree with the above, but just to elaborate a little further further - Medicaid rules are run by the states (with federal financial participation - FFP, which can range from 50-90% for various services/programs), which all have different rules.  My state, for example has a waiver program for married couples, allowing the spouse of someone in the waiver to retain assets.  (Note you need to be in the waiver - it's not automatic for everyone in the state.)

I'm with everyone on checking into the debts and negotiating before you do anything.  Understand the facts and your options before you pay.  For example, in my state if you have a certain amount of medical expenses (high) you can qualify for state aid.  (If it was outstanding a year or two later, you can still qualify then I think.  I attended a presentation on this a little while back and it's admittedly a little fuzzy.)  You can also negotiate while you have the debt, but if you pay that off with credit cards, you lose the ability to negotiate.

Also, paying directly may feel demeaning to the parents, but it is necessary to ensure the right bills get paid.

[Charlotte]

Great advice above. I would just reiterate that you should not just hand them $25k. For many, many, many reasons....

Talk to professionals and make a plan!

[Bigote]

Thanks for the input, all. 

As it turns out, I'm going to pay his property tax and hold off any more until I sort everything out, or at least until I sort some of it out.

What we have going for us is that they are both frugal, in fact cheap.   So this isn't a case of them being broke because they have two new cars a big screen tv and took two cruises last year.   It makes it easier (mentally) to help them, that's for sure.

Having said that, it also means its not a simple case of eliminating some bad behavior and then all's well.  Rather we need to make some structural changes - and there aren't that many options.   One would be having them move (which itself would be very complicated and obviously disruptive, though it may be necessary).   Another would be getting them more aid, since they should qualify for it.   Bankruptcy may also be an option, if not right away then at some point. 


A few things that aren't in our favor:

 - they are elderly and infirm.  there's no plan B with them earning income of any sort.   
 - of the 4 kids (her two, his two) in the picture, 3 have no money and little or no relationship with them.  We are the exception on both fronts, so its all us.
 - We live 2.5 hrs away
 - MIL always has been and *remains* the dominant partner in the relationship - indeed domineering partner - even though she has dementia   Yes that's scary.


Anyway, I see this being a fairly long process.   Its not like we'll get all the info we need in a week or two, develop a plan and execute.   I just don't see it happening that quickly.

[Capsu78]

This is a very sad thread on many levels.  While I think much of the above advice is good, I also think the situation begs for some professional guidance as well- an attorney specializing in elder care.  Someone will need a durable power of attorney to shovel out from under this financial snowstorm.

Also, not mentioned yet, you must keep an eye on your and your wifes stress levels.  My brother managed my dads affairs while he was suffering with Parkinsons and it lead to my brother ending up with higher than desired blood pressure.  (We also had a sister spin out of control during that time, who needed to be "unwound" from dependence on tapping dads retirement fund.)  It took 18 months of detachment after dad passed for my brother to get that back under control.

My wife and I are refreshing our own estate plan right now, and will be involving our grown daughter in the mechanics of our retirement, which is still a ways off.  I want to explain to her that our biggest desire is to be financially self sufficient during our retirement years. If there is money left over, it should work to secure her and her sisters retirements and not be spent on a cruise!

[happy]

she has dementia

Its an unpleasant surprise, thats for sure.

I just wanted to add that folks with dementia don't move house well.....so it would be wise  as you say to take your time if there is a move involved. It would be better to only have one move.

[Another Reader]

Sadly, your problems are compounded because of the blended families.  MIL is in no shape to make decisions.  As long as FIL is able, he can decide what's best for her and act accordingly.  However, if the result is bankruptcy and a Medicaid nursing home for MIL, you can expect some resentment and pushback from her kids.  Heck, no matter how this turns out, you are the guy with the money and you will likely be blamed for whatever deficiencies in MIL's care her kids perceive.

If something happens to your FIL while MIL is still alive, you will have another problem.  If there are any assets left, she and/or her kids will likely get them.  Also, they will become the decision makers for MIL.  That can be a real problem if you are supporting both of the parents in some way at that point.  Disengagement would be difficult and unpleasant.

In your shoes, I would consult with an elder care attorney in the in laws' state before I did anything except assess the financial situation.  Depending on your wife's relationship with her sibling and the two step-siblings, a discussion and understanding of what the attorney recommends and what you are willing to do and not to do with them is probably in order.

In your shoes, I would try to work cooperatively and diplomatically with FIL and all the kids to see if everyone could agree to a plan and some contingencies.  To me, that's the best outcome in this very difficult situation.

[bogart]

Thanks for the input, all. 

 - of the 4 kids (her two, his two) in the picture, 3 have no money and little or no relationship with them.  We are the exception on both fronts, so its all us.

...Anyway, I see this being a fairly long process.   Its not like we'll get all the info we need in a week or two, develop a plan and execute.   I just don't see it happening that quickly.

I concur with the "long process" part.  Assuming you're willing/capable, likely life-long (theirs), with lumps and bumps not always predictable (i.e. easier spells and harder spells).  Voice of experience here. 

Again, I'm sorry you're dealing with this, and don't have more support.  That said, my sense is that there are worse problems than the "all us" reality you describe.  While supportive/helpful family relationships would be great, I've seen plenty of even well-intentioned cases of siblings (etc.) creating as many obstacles/challenges to finding a workable plan, as not.  At least if it's "all you," well, it's all you.

I'd second @happy's observation about people with dementia not moving well, and try to take your time to find a good situation that can support both your MIL's current needs and her likely future ones -- a challenging goal, with limited financial resources, but worthwhile, if feasible.  Good luck to you.

[AccidentalMiser]

Toward that end, I would not wire them that money on Monday.  I would take the day off work -this is a family emergency- and visit a bankruptcy attorney with FIL.  (You might also be interested in some kind of elder care councilor because of your MIL's situation.)  The bankruptcy attorney would be able to advise on the exact significance of that hearing, and help you plan a strategy around discharging the maximum amount of debt.  Note also that bankruptcy puts them in credit jail.  That could be a good thing.

This +10.

You need some professional advice my friend.  Your in-laws need to declare bankruptcy and get on public assistance.  You need NOT to wire them $25k (unless that's what the attorney advises.)

Bless you for wanting to help.  Please get some professional advice first!

[Sofa King]

I wouldn't give them the money directly. I'd ask them for the payment info and pay the bills yourself. Giving them money is a bad idea as they've shown that they are horrible managing it.

I concur!!!

[frugaldrummer]

Frankly, I'd question your FIL's mental facilities as well to have so much going so wrong - this had to be in the works for well over a year for it to get to this point.

I agree with this.  Most likely FIL's mental status is not so good either (or, he always deferred to MILs money-management and was clueless about how to handle things himself).

I also agree with another poster, moving dementia patients is hard - they tend to get more demented when not in familiar surroundings.  You may not have a choice in the matter, though.

As for many previous posters comments about Medicaid - it is VERY DIFFICULT to get into a nursing home as a Medicaid dementia patient, unless you were in an acute care hospital first for something else and "graduated" to the nursing home.  My friend's husband suffered from early-onset dementia in his 60's, and despite needing round-the-clock care (he'd do things like accidentally setting the kitchen on fire if left alone for a few hours), she could not get him into a nursing home at first.  He was too physically healthy to go the hospital-first route.  Finally, what she had to do was lie to the nursing home, say they had money for private-pay (at $7k/mo), and use money donated by his friends/fans to pay for the first couple months while sweating whether the Medicaid attorney she hired could get him on Medicaid at that point.  (It is easier to get Medicaid to pay for a nursing home stay once you are IN the nursing home).  It worked, but was a huge financial risk, and most people wouldn't have the resources to take that route.

Also - take  a look at those credit card statements.  If there ARE fraudulent activities on there, you might be able to get some of the charges reversed, at least the latest ones.

Bottom line, though - it doesn't sound like there's enough money to keep them in their home.

[AlexK]

My inlaws are divorced and both broke, both horrible with money. This problem will be in my future too but my plan is to offer them a free place to live in my modest house any time they need it but no cash. Also it would be my house my rules for example no smoking and no we won't be getting satellite TV.

If you give them money you are enabling them to keep making the same mistakes. In your case it sounds like the problem is medical bills and not stupid decisions but the result is the same, you will go broke supporting them.

[Bigote]

My inlaws are divorced and both broke, both horrible with money. This problem will be in my future too but my plan is to offer them a free place to live in my modest house any time they need it but no cash. Also it would be my house my rules for example no smoking and no we won't be getting satellite TV.

If you give them money you are enabling them to keep making the same mistakes. In your case it sounds like the problem is medical bills and not stupid decisions but the result is the same, you will go broke supporting them.

Big difference, I would pay large sums annually to not have them live with me.   Seriously, not to be flip, but if it came to it I'd rather buy them a home and give them life use, hoping to break even on sale.

[Bigote]

I just wanted to add that folks with dementia don't move house well.....so it would be wise  as you say to take your time if there is a move involved. It would be better to only have one move.

Good advice.   She was in the hospital for a few weeks this summer and it was a nightmare.  She had to be reminded multiple times every day where she was and why.   Everything got worse while she was there, and she recovered quite a bit when she was finally in familiar surroundings.

This is also why the solution (so to speak) to this problem is far from obvious.   It's not as easy as saying 'you can't afford to live here, go get a section 8 voucher'.   For example, if I knew she would need to be in a nursing home a year from now, I would gladly supplement their income so they could stay in the home and she could move just once.   If it were going to be 10 years, then no, we'd talk them into moving now.
 

[NWstubble]

Bigote, I have no sage advice to add but want to say thank you for sharing. I foresee something similar playing out in my future and seeing this discussion makes it seem less apocalyptic and more 'just another of life's hurdles', albeit a large one.

[Another Reader]

It's important to get your MIL evaluated by a specialist.  Dementia has a number of specific causes, and it's not possible to predict exactly what will happen and when.  However, the specialist should be able to determine how much damage there is, and give you and your FIL a rough idea of what to expect.  Some medical guidance should help you in your decision making.

Giving your in laws financial help, even indirectly, can damage their eligibility for aid.  In your shoes, I would get a referral for an attorney in their state ASAP, preferably in their city/county.  Yes, the tax bill needs to be paid, but it needs to be paid in the way that least damages their chances for assistance.  The cost of full time care for your MIL is the elephant in the room.  If you supplement their income for a year, what happens to her eligibility?  If she is ineligible for assistance, how will this expense be paid?

[Free_at_50]

Went thru very similar situation.  My advice, make sure you really understand what is going on before you start throwing $ at their situation.  Could be the absolutely wrong thing to do.  Things happen for a reason and if you don't truly understand the issues you may just be prolonging the inevitable which could also result in one of them getting hurt or even worse hurting others because they were able to continue in an unsafe manner.  Good luck, my prayers are with you as this is never easy.

[msilenus]

As it turns out, I'm going to pay his property tax and hold off any more until I sort everything out, or at least until I sort some of it out.

There are a bunch of reasons why you might want to do this, and I wouldn't try to persuade you off of most of them.  This could just be a matter of differing values.  However, it could also be that you're thinking that there's no harm in paying off the property tax because it can't be discharged in bankruptcy anyway.  If that's not what you're thinking, stop reading.  If it is, you might find this useful.

Let's posit that you live in the imaginary state of Mustachia with a $50k homestead exemption in bankruptcy, and the in-laws have $80k in equity.  You pay off their tax bill, then talk to a bankruptcy lawyer.  He advises you something like this: "well, they're on the hook for $30k in home equity, and they only have $30k in debts.  Might as well find a way to tap that equity to pay off the credit cards.  Bankruptcy can't do much for you right now."

If, on the other hand, you had not paid the tax bill first, the lawyer might say something like this: "Well, let's file for bankruptcy.  The arbiter will rule that your $30k of home equity will first need to go toward paying off the tax bill.  Then there's $5k left to pay off the credit cards.  He'll discharge the remaining $25k in credit card debt.  Don't worry about the hearing on Friday.  Just tell the judge you're going through bankruptcy and he'll postpone the rest.  Even if he doesn't, we'll be able to have this settled long before the city can foreclose and evict."  You could then opt to pay off the property taxes instead of having them tap that home equity.

See the difference?  In the second scenario they come out about $20k ahead, at the expense of the credit card companies.  The bankruptcy lawyer was able to use the $25k tax debt as a weapon to beat away most of the credit card debt, so your $25k (plus meddling) winds up going about $20k farther toward helping them.

I have no idea if that's how things would play out in their state.  (I've only passed the bar in Mustachia, you see.)  But there's some chance that a quick bankruptcy would maximize the chance of keeping their in the home, and minimize the cost to everyone who matters here.  Seems worth looking into.

[Adventine]

Just wanted to chime in with my sympathy for Bigote's situation. It's never easy when parents and parents-in-law are struggling. Whether or not the financial problems are mostly, partially or totally not their fault, it's hard to see loved ones in difficulty.

Best of luck to you.

[Bigote]

Seems like there is no possible way for them to catch up to all that debt, unless you have loads of money to pay for your life and theirs. Isn't bankruptcy the only real option?

It may be.   They actually have a positive net worth considering the home equity, but its small (maybe 40k?)   They could keep home and the equity through bankruptcy, but would need to affirm the lion's share of their debt (the heloc) and that still mght not put them on a sustainable path, given the high property tax they pay there.   

They could move to a cheaper place in theory and keep some equity in the new place through bk, but i doubt anyone would write them a mortgage at this point.

[A mom]

Bigote,

Do let us know how things are going. You and your in-laws are much on my mind.

[MrMyMoney]

Bigote. First, I want to thank you for sharing this story with us and I'm hoping for the best for you and your family. Second, I wish I will never be in this situation myself: not only is the economy bad and saving for your own retirement relatively difficult nowadays, having to take care of other people's debt because they can't is stuff of nightmares for me.

I'm coming back home from China in two months and I begin a new career that will allow me to retire early. I also plan on making sure my fther and his gf get their stuff sorted because atm this doesn't look too good tbh and I wish to avoid your situation in the future if at all possible.

Good luck mate.

[ch12]

Quite frankly, I'd let them file bankruptcy and lose the house. Then, I'd provide a place for them to live and food for them to eat, as well as support with ongoing medical bills (they should be on Medicare, no?). I'd help them get back on their feet.

Definitely a topic that needs to worked out with your spouse

[LalsConstant]

I can't relate to this exact situation, but I can tell you that you need to put your foot down based on something I've gone through.

I found out years ago my grandmother was behind on her bills and her money situation was a complete mess.  It wasn't like what you describe but it wasn't good either.  I had financial power of attorney and I had my name on her account at least, so I used that leverage and some online transfers to keep her money under my control until I could get things settled.  I hated doing it, but it had to be done.

Eventually she got to the point she accepted it was something she had to give up like driving and I've been keeping her finances ever sense.  But you're going to have to do this with a tender heart and an iron fist.