We want to be good sons and daughters. We want our parents to be happy and satisfied in their final years. We don’t want them to worry about us. We want them to travel if they want to, to buy things that maybe they held off on when they were younger. We want them to enjoy their grandchildren. And we are not looking to get their money when they pass away.
It comes to a shock to many of our clients at Steidl and Steinberg when they find out their parents owe so much money on their charge cards they are having trouble paying their living expenses. I had a recent case where our clients owed $40,000 in credit cards on a fixed income of about $2,300.00 per month. With minimum monthly payments of over $1,300.00 per month on these cards, they are having a lot of problems just keeping up with living expenses. And at $1,300.00 in minimum payments, they will be paying on these bills until after they are 100 years old.
Signs of Trouble
That is not the life they dreamed of.
What are the signs that your parents may be in trouble? Often, there are none. Your parents may be paying everything with a credit card, but savvy shoppers do that often to build up their frequent flier miles or get cash back. This can lead to the card users overspending with the so-called justification that the money is going to something worthwhile. If it is overspending, it is not worthwhile no matter how many miles they collect.
When your parents give the kids holiday gifts, the source of the money for the gifts is not something you would normally ask about. Maybe it's time to investigate. Ask simple questions when you see something that might be a little suspicious. "Mom, dad, that is a lot of money to spend on those things. How do you do it on your income?"
Sometimes you have to be more direct. "Mom, dad, I would like to take a look at your finances and make sure everything is okay."
Look at Their Bills
Take a look at the table that has the bills. Does it look like there are a lot of charge cards in the pile? Only you know your parents’ habits, and only you know what might work in their case. In the matter of our recent clients, I was able to get their payments down to $450.00 per month by filing a Chapter 13 reorganization bankruptcy plan and the parents were able to hold on to their house and cars.
The facts in all cases are different. If your parents have no real estate or if the real estate does not have a lot of equity, than a straight Chapter 7 might be in order. But regardless, take a look, and if there are problems, contact us for a free consultation at Steidl and Steinberg. We see this a lot, and we may be able to offer some very constructive suggestions. It’s a parent you are concerned about, and it’s apparent that we should look at their situation.