In March 2009, we found out that my husband's mother in South Carolina has been struggling financially for quite some time. Amongst other issues, she was facing an impending car repossession, electricity cut-off, other significantly past due utilities, bill collectors, unpaid doctor bills, numerous bounced checks/debit transactions and fees ($6200 of insufficient fund fees over 1 year period), and a small amount of debt associated with fast-cash services.
She has maintained a stable union-controlled job for 25+ years and grosses approximately $61000 annually, so theoretically her income should be able to cover her rent, utilities, car, and personal expenses. This being the case, we convinced her to allow us to manage her bills and monitor her banking transactions and spending habits to get a better handle on her situation. She closed her old checking account and opened a new one with no debit-card, started depositing her paychecks into our bank account so we can disperse money to her as needed, and began sending her bills to us to take care of. She does not have access to the account that her paychecks are deposited into, and we did not cosign or add our names to any of her accounts. We spent approximately $5000 of our own money bringing her car payment and utility bills up to date and paying off certain other pressing debts.
By June it was obvious that her financial problems ran much deeper than she originally admitted, so we went through her apartment in search of additional dept-related items. We collected and organized stacks of bills and letters dated 2007-2009 stashed randomly in drawers and bags, and found a few boxes of older papers at the back of a closet that we decided to leave as is for the moment. She only has a few monthly statements for various bills, so we think she often throws them out as they arrive. In June, she admitted she has struggled for years, cannot remember when she lost control of her finances, and cannot remember all of the things she owes money on.
Since she often uses cash to pay bills and does not keep financial records, it is difficult to determine which debts remain outstanding. Her credit reports all differ and do not appear to be current. She has paid down some debts on her own, so we cannot assume that she ignores all of her debts. She has gone to numerous doctors over the years and had a few surgical procedures. These doctor and hospital bills, we fear, are likely her biggest financial burden still to be unveiled. We would not be surprised if we found out that she owes between $15,000-50,000, depending on how far back her problems run.
She is 61 and fully intends to retire in 2-4 years, at which time she will receive around $1250/month from pension as well as SS benefits (not sure of the amount/month).
She has no savings and does not own a home, property, or anything of real value, with the exception of a car that will be worth about $4-5000 when the loan is paid off in November 2009. Once her car is paid off, she should have $300 or so per month to put towards paying off delinquent bills.
Now that we know her financial problems are more extensive and convoluted than originally thought, we don't know how to proceed. Specifically, is a consult with a lawyer (along with mom, of course) the correct route to take at this point? If so, what should we expect from the consult, and how should we prepare for it? Also, which specialty is most appropriate for her situation and how do we go about finding someone reputable? If a consult is not appropriate, who should we talk to instead?
Our most difficult task to date has been identifying all of the items she still owes money on. We don't mind spending a significant amount of our own time and effort researching/digging/dealing with bill collectors and settlements if it's a viable option. However, before doing so, we would like to consult with an expert to make sure we fully understand best practices for finding information, dealing with collection agencies and the sort. We also would like to find out if bankruptcy or some other avenue might be a better option for her. We don't have a lot of money to invest in long-term law fees, so anything we can do to reduce the cost of resolving this issue would be helpful.
Lastly, we would like some feedback as to whether any glaring mistakes are evident regarding our handling of this situation thus far.
We sincerely appreciate your thoughts and guidance.
She has maintained a stable union-controlled job for 25+ years and grosses approximately $61000 annually, so theoretically her income should be able to cover her rent, utilities, car, and personal expenses. This being the case, we convinced her to allow us to manage her bills and monitor her banking transactions and spending habits to get a better handle on her situation. She closed her old checking account and opened a new one with no debit-card, started depositing her paychecks into our bank account so we can disperse money to her as needed, and began sending her bills to us to take care of. She does not have access to the account that her paychecks are deposited into, and we did not cosign or add our names to any of her accounts. We spent approximately $5000 of our own money bringing her car payment and utility bills up to date and paying off certain other pressing debts.
By June it was obvious that her financial problems ran much deeper than she originally admitted, so we went through her apartment in search of additional dept-related items. We collected and organized stacks of bills and letters dated 2007-2009 stashed randomly in drawers and bags, and found a few boxes of older papers at the back of a closet that we decided to leave as is for the moment. She only has a few monthly statements for various bills, so we think she often throws them out as they arrive. In June, she admitted she has struggled for years, cannot remember when she lost control of her finances, and cannot remember all of the things she owes money on.
Since she often uses cash to pay bills and does not keep financial records, it is difficult to determine which debts remain outstanding. Her credit reports all differ and do not appear to be current. She has paid down some debts on her own, so we cannot assume that she ignores all of her debts. She has gone to numerous doctors over the years and had a few surgical procedures. These doctor and hospital bills, we fear, are likely her biggest financial burden still to be unveiled. We would not be surprised if we found out that she owes between $15,000-50,000, depending on how far back her problems run.
She is 61 and fully intends to retire in 2-4 years, at which time she will receive around $1250/month from pension as well as SS benefits (not sure of the amount/month).
She has no savings and does not own a home, property, or anything of real value, with the exception of a car that will be worth about $4-5000 when the loan is paid off in November 2009. Once her car is paid off, she should have $300 or so per month to put towards paying off delinquent bills.
Now that we know her financial problems are more extensive and convoluted than originally thought, we don't know how to proceed. Specifically, is a consult with a lawyer (along with mom, of course) the correct route to take at this point? If so, what should we expect from the consult, and how should we prepare for it? Also, which specialty is most appropriate for her situation and how do we go about finding someone reputable? If a consult is not appropriate, who should we talk to instead?
Our most difficult task to date has been identifying all of the items she still owes money on. We don't mind spending a significant amount of our own time and effort researching/digging/dealing with bill collectors and settlements if it's a viable option. However, before doing so, we would like to consult with an expert to make sure we fully understand best practices for finding information, dealing with collection agencies and the sort. We also would like to find out if bankruptcy or some other avenue might be a better option for her. We don't have a lot of money to invest in long-term law fees, so anything we can do to reduce the cost of resolving this issue would be helpful.
Lastly, we would like some feedback as to whether any glaring mistakes are evident regarding our handling of this situation thus far.
We sincerely appreciate your thoughts and guidance.
