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Should my grandparents file for bankruptcy?

My grandparents who are in their 80s have gotten themselves in a financial mess. They were buying their food and medicine on their multiple credit cards. I recently helped them write out bills when GrandDad was in the hospital and I could not believe the situation they were in! They were spending $500 a month more than they were bringing in. After several years of living this way they are in major debt. I have looked into filing bankruptcy in order to give them enough money to live on each month. They are adamantly against this, but I see no other way out.
Status: Open    May 05, 2015 - 12:53 AM


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Expert Answers

Aug 04, 2015 - 10:08 AM

You may want to look into a government insured Home Equity Conversion Mortgage (HECM). They would have no mortgage payments, we actually pay them. They would be responsible for property taxes, homeowners insurance and maintenance of the property. Based on what you wrote they may want to consider taking monies at closing to pay off all their debt and also look at receiving a monthly payment.


Sep 08, 2015 - 03:15 PM

I see so many instances of grandchildren taking over the childrens' responsibilities.
You should not have to do this alone. Reach out . . . and be really ugly if you have to.

Your grandparents will soon exceed their credit allowance and/or not be able to meet their minimal credit card payments!
Then, they will really be looking at upleasant issues.

A home equity loan and/or bankruptcy may be the proper route. Just don't wait . . . investigate.
And thanks for being a good grandchild!

Sep 16, 2015 - 07:50 AM

Your grandparents may own a life insurance policy that could be of better use for them while still living. Certain policies may be eligible for sale to an intitutional investor such as a bank for which this funder would pay the policy owner a lump sum of cash that is greater than the surrender value but less than the death benefit. In exchange they would continue to pay the premiums and be the beneficiary. It's an option that doesn't cost anything to find out if a policy would qualify and could be a life saver.


Jul 13, 2015 - 07:29 PM

Consult with a reputable bankruptcy attorney (not one of those "BK factories"). Possibly even an elder law attorney who has experience in current bankruptcy law. Before calling the attorney work up a basic financial worksheet of your grandparents' assets and liabilities (ie; dollar value of any real estate owned, collar value of any automobiles, boats, stocks/bonds, IRA's, total income, total credit card debt, other monthly bills, and living expenses, etc.). The attorney can go over available options for your grandparents and help them decide to do after determining what they would qualify for. Also, bring a list of any specific questions you have. There should be no fee for an initial sit-down consultation with the attorney.
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