Relative in trouble, I need ideas to help

This morning my Grand Mom fell into a coma and its looking very likely that she will not survive the weekend. This post is not about her. She lived to be 80 years old, was very happy, was healthy and worked up until yesterday, had friends, and lived life her way. No, the person with the problem is her son, my Uncle.

My Uncle is 47 years old and hasn’t worked in 20 years. In the 80s he had a nervous breakdown and has lived at home with his Mom ever since. He tried to file for disability but was rejected. Now I’m not going to say he deserves it, but everyone gets rejected the first time and he made no effort to appeal. My Uncle is at the lower end of the IQ range and doesn’t communicate well with other people. I wouldn’t call him retarded but many people have come to the conclusion. To make things convenient, Grand Mom put his name on everything, thinking he would just get everything when she passed on. Which he will get everything but he also gets her debt. She had major credit card debt plus whatever they owe on her car. My Grand Mom’s home is a trailer and while she owned it complete and it is a nice trailer in excellent condition, the land was rented. I’m guessing that he couldn’t get much for it. The bottom line, if he took all her assets to pay off her debts he would still be $20,000 in the hole. Not a good thing for a guy who hasn’t worked in 20 years and future job prospects are limited. My Grand Mom didn’t plan on leaving him in this situation. She really thought she was going to work till she was 100.

With the cash on hand and his bills my Mom and I guess he has around 4 months + however long it takes the creditors to swoop in when he stops paying them. Even if he gets a minimum wage job, ditches the car, and levels bare bones, I don’t see how he is going to pay minimum payments and his bills in the long term. I really see him being homeless by the end of this year. If I was him, I would get a job and just fight to the end. I rather become homeless in 3 years than 6 months. Plus who know what might come up in that time? Talking to him though, I doubt that’s the route he’ll take. Anyone out there has any creative ideas?

Declare bankruptcy

With the new bankruptcy laws he’d wouldn’t even get through the intial steps before his money and time ran out. Plus he’d still end up homeless and no way to even rent since his credit will be poison.

He does not take on her debt, unless he voluntarily assumes it. Her assets would be sold off to satisfy the debt, and he will have whatever is left (if anything).

Just trying to add some clarification; in the U.S. you do not inherit debt; the assets you get may have to go to satisfy debts, but you are not liable for what is left over.

Sadly, that does not resolve your homeless issue if he has nowhere to live but where the deceased relative was.

His name is also on the house/trailer and all accounts. With the primary account holder dead, the burden shifts to the secondary, which is my Uncle. Having his name on everything was a bad move. He could of walked and started new.

This is mostly nonsense, Rob. How long it takes to declare bankruptcy is irrelevant if the alternative is “end up homeless and debt-ridden”, and how bad his credit will be after the banco is irrelevant when the alternative is “end up homeless and debt ridden”

He needs to declare bankruptcy. This is what the concept of bankruptcy exists for.

Yep, bankruptcy is his best way out. Once he files, the creditors can’t swoop in and take anything. They can’t take a thing until the court orders it.

I don’t think bankruptcy will let him keep the trailer though…they’ll still come and take it to pay off the debts. It protects him to some degree, but you don’t just get to keep the stuff you owe on when you declare bankrupcy. They’ll foreclose.

I think declaring it would be a BAD idea. Don’t listen to that advice. Unless he has his own debts, there is no point. Now, since the trailer is in his name, he may have to do it anyway, but I’d look for other options first. You don’t generally declare bankrupcy on 25K or less of debt, though it does happen sometimes…

They can’t forclose on the trailer if it isn’t collateral against any of the other debts. If it was used as a security against other debts (or it isn’t paid off as you first said) then yeah he should be concerned about the roof over his head. A credit card company, for example, can’t just swoop in and start taking shit out of your house to cover the debt. Hell if the car was paid off, that would be free and clear also. And if he doesn’t pay the rent on the land, they can kick him off but they can’t (forcibly) keep his shit which is on it.

It doesn’t have to be collateral. If it isn’t paid off, they can take it. That goes for the car too, and anything else being paid off. Yes, they can’t take other stuff to make up the debt, but he doesn’t own any of those thing, from the way Rob explained it. He owes on them as a co-signer, it sounds like. If, however, he didn’t co-sign, he will still lose them if they are in her name and not paid off…even if he (or her estate) declared bankrupcy.

You should qualify for the PGA tour so that your winnings can save his home. First, you should find a one-handed caddy to teach you the secrets of the game at your local putt-putt course. Just watch out for Bob Barker. He throws a mean left hook.

That’s not what Rob said, though. He said he owns the trailer free and clear. Everything is in his name. Come on, guys, this is like the second time in this thread someone has posted advice without reading the initial post.

Also, you don’t need to put everything you own into the bankruptcy. If for some reason Rob is doing a terrible job of explaining the situation and there is still a mortage on the trailer, you can keep the mortage around and just keep paying on it.

This guy has no income and apparently no ability to make more than minimumish wage. Unless the debt that has Rob so worried is like $2,000 or something he needs to declare bankruptcy. This is not a close situation at all.

I really have no idea, and this is just a guess, but i’m thinking Medicare/caid is his only chance. He’s going to have to be institutionalized for at least a little while however.

Basically he needs to be on some some of indigent care, and he’s going to have to be declared indigent.

To me, (imo), you need to focus less on trying to sort out an impossible financial situation than getting him declared somehow eligible for Medicaid. Unless, somehow, you think he can get back to work. I don’t know what he would be fit to do though, probably something like lawn maintainence.

Yeah, I agree with Gene. Bankruptcy is probably going to be necessary for right now, but just getting out from under that mountain of debt isn’t going to actually provide for him. You need to do research right away into what the best angle to get him some safety net money is, because if he honestly can’t work (and it sounds like he can’t), that’s his only shot.

And sorry about your grandmother.

Edit: also, would he really be homeless? If you’re making this thread, it seems like he has at least one relative willing to help him out (to a point).

It does not shift unless his name is also on the debt. Is that what you are saying?

Having your name on an asset is different than having it on the debt used to purchase the asset. Which is it? It makes a difference in the analysis.

I don’t know what state your grandmother and uncle lived in, but you need to IMMEDIATELY talk to an attorney who specializes in bankruptcy who practices in that state (I’m being specific because you’re on the east coast where people cross state lines all the time). Do not assume anything about foreclosure or inheriting/shared debts. That’s what lawyers are for. Also, you need to know who the administrator of your grandmother’s estate is/will be. I say administrator because this does not sound like a situation where there was a will.

Other thoughts:

If this guy has not worked in 20 years, I would be very surprised if he could not easily go into Ch 7 bankruptcy. The BR laws were amended so that Ch 7 (liquidation) would not be as easily available to people who were working and could pay some of the debts off in a Ch 13 payout plan.

Do not assume that your uncle would “lose everything” in BR. Both federal and state laws provide for exceptions to the property that must be liquidated in a BR proceeding. If the person does not have a lot of assets (especially non-homestead assets), there is a very good chance nothing will be exposed to liquidation.

Stop paying non-secured debts immediately. He needs the money more than some damn corporation.

Filing BR has the effect of imposing an automatic stay on all bill-collection activities. This means no payments during the pendency of the claim.

By placing assets in your uncle’s possession, your grandmother may have prevented him from being eligible for SSI payments. SSI has very low thresholds for assets that can be held by a claimant. Divesting a lot of these assets could be beneficial. Also, if you reapply for SSI benefits ASK TO REOPEN ANY PRIOR CLAIMS DUE TO MENTAL INCAPACITY. You don’t ask, you don’t get. This could preserve years of back benefits if reopening is granted and he’s found disabled.

Take him to see a lawyer who does estate planning for the financial aspect and then to a lawyer who does bankruptcy and then to a lawyer for his Social Security/Disability claim. That’s easy because it is only six car rides total, to and from each office, with maybe a stop for hamburgers on the way there or back.

Dammit, Flowers, you know better.

I don’t know what state your grandmother and uncle lived in, but you need to IMMEDIATELY talk to an attorney who specializes in bankruptcy who practices in that state

This should have been in post #2, and then the thread should have ended.

Thanks everyone of the advice. I’ve been talking to some lawyers this morning.

So far, no one who has the resources is willing to step up and help him directly.