My In-laws are sinking and pulling my family under.
January 24, 2012 6:09 PM Subscribe
My in-laws are broke, bankrupt, and have massive car payments. How can we help dig them out of this smoking crater without falling in?
posted by anonymous to work & money (16 answers total) 5 users marked this as a favorite
My in-laws are in their early seventies and have never been good with money. Three years ago, they filed for bankruptcy in the wake of a foreclosure on their condominium. Two years ago, post-bankruptcy, they traded in their not-yet-paid off cars in for two fancy sedans, with a monthly payment of over $500 for each car, on a 60 month loan at 0%.
Fast forward to today, they're broke, my father-in-law is unemployed, and my mother-in-law got her hours at her part-time retail job cut to almost nothing. With my mother-in-law's wages plus their social security payments, they can barely scrape together enough money to cover the rent, let alone $1000 dollars worth of car payments.
I want to help them get rid of these cars and get them something reliable used for cash, but the options seem limited.
The remaining balance on each car is over 20,000 dollars. I would say they should do voluntary repo but blue book on the cars is significantly below the remaining balance and they'd be on the hook for the difference. I can't help them cover the difference without digging deeply into my own emergency reserves, and as it is not my debt I am unwilling to do so (and I'm feeling guilty about this).
It's been less than seven years since their last bankruptcy, so I can't see any way for them to escape this unsecured debt. If the lender gets a judgement to take money out of their social security or my mother-in-law's paycheck, they'll be unable to pay their rent.
Currently I'm giving them money every month to cover the rent but the gap is getting wider and I don't know what to do. I'm angry and frustrated and I would love to wash my hands of the whole situation, but they are my daughter's grandparents and aside from their horrendous financial irresponsibility they've always been very kind to us.
Help. I feel like I'm drowning.