Alternative payment program abuse - it hits home this time.

biscuitninja_IHB

biscuitninja_IHB

New member
My mother-in-law recently passed away. It was a sudden occurance and now her children are picking up the pieces. One of the issues currently is that the mom had been making negative amortization payments for a few years on her house. (When her husband died 8 years ago, the house was paid off...). Now the house is upside down, she has 30k in credit debt and has precious few assets left.



They are currently worring that the banks will come after them for the credit/house debt. I am assuring that the trust will pay the debt until it is exhausted (in which case they will receive nothing).



I am quite astounded that the Mom-in-law would do this. She had a thriving business and seemed to do well.

(Right now I have quite a headache).



Take it easy

-bix
 
[quote author="biscuitninja" date=1216947126]



They are currently worring that the banks will come after them for the credit/house debt. I am assuring that the trust will pay the debt until it is exhausted (in which case they will receive nothing).



</blockquote>


Your assumption is exactly correct.



We got rid of debtors' prisions, and got rid of the compesitory generational passing of debt. The trust may be busto, but the benificaries are not on the hook.



I'm sincerely sorry to hear about this turn of events. At some time in the future, I'd like to discuss the specifics on how you think this happened and why, but obviously not now.
 
After my dad passed away, but before I had his phone turned off, I was getting call after call on his answering machine from lenders offering to set him up with home equity loans. It angered me, as I was sure these calls were targeted at seniors. Luckily, my dad didn't bite - I hope your mother-in-law wasn't a victim. So sorry.
 
[quote author="SoOCOwner" date=1216965670]After my dad passed away, but before I had his phone turned off, I was getting call after call on his answering machine from lenders offering to set him up with home equity loans. It angered me, as I was sure these calls were targeted at seniors. Luckily, my dad didn't bite - I hope your mother-in-law wasn't a victim. So sorry.</blockquote>
I get so angry when people and companies target seniors for this type of stuff. I have to watch my elderly father with this type of stuff. He is soooo nice, and he thinks everyone else is just as nice and they want to help him. I wish I could live in "his world" and not be so cynical, but some people and some companies just suck! I hate having this hard edge, but you have to in this world.
 
Thank you all. I think "Mom" got an offer and took it. She had nearly 500k in equity and had big plans for it. Unfortunately so did/does everybody else. Right now i'm going through all the hell of the "big" brother wanting everything that the Mom had. Never mind he pushed the family away ( changed his name) and constantly uses his daughter to leverage things off of members.



I am just trying to be the voice of reason and trying to see the "good". But unfortunatley I am "arming" myself with lawyers. Nothing concrete yet, and hopefully i'm just being overactive. But I do understand you Calgal... (engineers... love to hope for the best and have a secondary/tertiary/4th order backup... just in case).



-bix



p.s. Vasily, send me a PM or i'll tell you at the next dinner dealie...

-
 
[quote author="no_vaseline" date=1216959417][quote author="biscuitninja" date=1216947126]



They are currently worring that the banks will come after them for the credit/house debt. I am assuring that the trust will pay the debt until it is exhausted (in which case they will receive nothing).



</blockquote>


Your assumption is exactly correct.



We got rid of debtors' prisions, and got rid of the compesitory generational passing of debt. The trust may be busto, but the benificaries are not on the hook.



I'm sincerely sorry to hear about this turn of events. At some time in the future, I'd like to discuss the specifics on how you think this happened and why, but obviously not now.</blockquote>




I don't think this is correct, but you should contact a lawyer.





The debts do not outlive the trust of the deceased (and sorry for your loss). The worst that can happen is that the debts will exhaust the trust, but the beneficiaries are not responsible for any remaining debt (of course, they will get nothing in this case).
 
[quote author="CalGal" date=1216965979][quote author="SoOCOwner" date=1216965670]After my dad passed away, but before I had his phone turned off, I was getting call after call on his answering machine from lenders offering to set him up with home equity loans. It angered me, as I was sure these calls were targeted at seniors. Luckily, my dad didn't bite - I hope your mother-in-law wasn't a victim. So sorry.</blockquote>
I get so angry when people and companies target seniors for this type of stuff. I have to watch my elderly father with this type of stuff. He is soooo nice, and he thinks everyone else is just as nice and they want to help him. I wish I could live in "his world" and not be so cynical, but some people and some companies just suck! I hate having this hard edge, but you have to in this world.</blockquote>


Not only are lenders targeting seniors, they are targeting innocent college students. My kid will be a freshman in college this fall, and I've been doing my best to warn her about becoming a credit card slave (made her view Maxed Out and other similar DVDs) and told her not to take out any student loans (apparently just in time since she said many of her friends are doing that). It really irks to me see credit card solicitation after solicitation addressed to my daughter coming to my house after her high school graduation. Hopefully my advice to her will sink it, and she'll tear up any solicitations that are mailed to her college address. It also irks me to constantly see the Astrive student loan commercials on ESPN, how easy it is for the next generation to be sucked into debt because "everyone else is doing it", just like how the older generation can fall into the situation of transferring all their money to lenders (my condolences). Maybe this housing situation can awaken more people to the dangers of debt and predatory lending.
 
Don't be so fast to "just say no".



She needs to get a couple of credit cards when she's still in college and figure out how to use them. Am I encouraging her to sign up for every card on the planet and leverage herself to the max? No. But college was for learning, and she needs to learn now not when she gets out. In fact, she'll have some real problems getting credit once she's not a student if she doesn't get some when she is a student. Just ask my brother who 'just said no', had 20K in the bank, and couldn't rent an apartment without a cosigner after he graduated because he had no credit score.



Just saying 'no' is no solution. But I'm sure you already knew that.
 
Yes, you're right, she will have to eventually get her own credit card, hopefully by that time she will be responsible and subconsciously take the non-credit card slave path. Actually the way we introduced her to credit cards has worked out pretty well. If anyone is interested, what we did was in her senior year of high school, we gave her a credit card (added her name to one of our accounts) that only she uses, so we can keep track of how much she spends. She did fine the couple of months, then as she got used to pulling out the plastic, her monthly credi card spending started getting out of control, so we had to make an adjustment. What we did was we set up a checking account in her name that gave her a debit card linked to that checking account. We made sure the debit card wouldn't have NSF fees if she tried to spend more than was in the account, but would just decline at the point of sale without any fees. We told her we would add $XXX amount every month to her checking account. With this setup, we told her the credit card was just for necessities like food, gas and educational expenses, and her debit card would be for "luxuries" like shopping malls. So this finally worked out well, every month we pay what appears to be a reasonable amount on her credit card for the "necessities", and she is actually spending less than what we put into her checking account so she can build up her balance in the checking account for future splurging. I also set up a Schwab account so she could deposit half her take home pay from her part-time job into the Schwab account, and put the other half in the checking account, which she could spend any way she wanted. Hopefully this will instill good habits for the next four years and then she can handle her affairs independently after graduation. I actually wouldn't mind too much if she is like no-vas's brother and graduates with $20,000 in savings and no credit score, instead of graduating with $20,000 in debt and a good credit score because she's making minimum payments on debt that just piles and piles up. It's just annoying though, seeing these endless credit card solicitations. I realize it's good for some people out there who make good responsible use of the credit, but for most people, it's like playing with fire.
 
<blockquote>I actually wouldn?t mind too much if she is like no-vas?s brother and graduates with $20,000 in savings and no credit score, instead of graduating with $20,000 in debt and a good credit score because she?s making minimum payments on debt that just piles and piles up. </blockquote>


Certainly the former is better than the latter, but both of them are suboptimal.
 
[quote author="biscuitninja" date=1216947126]My mother-in-law recently passed away. It was a sudden occurance and now her children are picking up the pieces. One of the issues currently is that the mom had been making negative amortization payments for a few years on her house. (When her husband died 8 years ago, the house was paid off...). Now the house is upside down, she has 30k in credit debt and has precious few assets left.



They are currently worring that the banks will come after them for the credit/house debt. I am assuring that the trust will pay the debt until it is exhausted (in which case they will receive nothing).



I am quite astounded that the Mom-in-law would do this. She had a thriving business and seemed to do well.

(Right now I have quite a headache).



Take it easy

-bix</blockquote>


Bix, my sincerest condolences to you and your family. As someone who has been through it, and someone who is witnessing the fear of someone else's ill family member, I can truly feel for you. Regardless of the financial loss, it is the loss of family that will be missed most.



I remember listening to some of the chop shop mortgage brokers "pitching the grannies" the option ARM, and how I would ask, "How would you feel if something happened to your mom/dad and you were left with the increased debt?" They would all scoff at me that the home would be worth a brazillion dollars then, so who cares. Their ignorance made me sick, and it makes me even more sick to hear about this happening to someone I know, and someone I know would never let this happen if he were involved.



I have mentioned this in another thread before, but I implore you to get involved with your parents and/or in-laws finances. I think that my mom would never fall victim to a slick pitch for an option ARM, but then I read this and think that Bix probably thought the same. Even if you are not comfortable that you would be the person to make the right financial decision, you know where to look for help or at least get pointed in the right direction. The last thing you want is a surprise like this.



At least Bix had a trust set up for his mom-in-law. And anyone else with property owning parents/in-laws should too. The cost now will be far cheaper than it will be later.
 
[quote author="biscuitninja" date=1217289292]Thank you all for your well wishes. My only issue right now is the retard brother who is making everybody's life hard.

good luck

-bix</blockquote>
It seems like everyone has that one difficult family member. Good luck with everything.
 
[quote author="CalGal" date=1217296171]It seems like everyone has that one difficult family member. Good luck with everything.</blockquote>


If you think you don't have any difficult family members, congratulations, you're the difficult one. :cheese:
 
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