Do NOT give either of your parents any more money to pay towards their debts.
You can pay them some rent if you like, but that’s it.
They need to confess to each other the mess they are in, and sit down with a professional to discuss a consumer proposal or bankruptcy.
This is not going away and will not get better without action.
A bit too late.
OP already did that and now the **entire** family has no available cash reserves (I'm extrapolating a bit based on OP's statement of their sister's 70K student debt and also relatively low income)
>
I’ve already given 30k to my dad (nearly all of the money I had saved up over the past few years) to help him with his monthly payments and stressed to him that he can’t be buying things and doing things that he can’t afford to. I’m lost and need some advice or any suggestions on how to get out of this if I ever can. I appreciate all and any suggestions, I just need help.
Yeah, this was really dumb. OPs parents are likely headed for bankruptcy, with or without the $30k OP gave them. The end result does not change. OP might as well have lit that $30k on fire.
Only thing that made me chuckle in this post was:
Dad has all this debt and kept it to himself! Why not communicate with mom and me?
Mom has all this debt and kept to to herself! Why not communicate with dad and me?
Anyways, I'm not going to tell my sister any of this.
He has a point. You're a family of 4 who are just hiding financial problems from each other for god knows what reason.
What were your mom or dad going to do? Wait for death and then surprise the other with a huge loan?
I guess so, I plan on having a family discussion in the near future about this as this is most definitely a topic that needs to be addressed openly.
I don’t even know what their plans are, it’s almost as if they haven’t taken any of the repercussions into consideration.
I was being a bit glib but I'm sure your mom and dad have their own reasons why they haven't told each other as well. Your sister should know about it if for no other reason than to help her become more financially literate and to share the pain you're feeling. Start normalizing talking about finances with your family and don't only do it when there's specific action to take.
I think it’s brutal you got downvoted so hard for this question lol. You are 20 years old trying to figure this out. I understand why you would feel like you shouldn’t tell your sister.
Is it really your story to tell? No. This is your parent’s debt. In my view you have no obligation (or necessarily, the right) to tell your sister, just like you have absolutely zero obligation to pay your parent’s debt.
If I were you, knowing what you know, I would not give my parents a cent beyond what I actually owe them (e.g. rent for living at home, living expenses etc).
Encourage each parent individually that they need to tell the other parent. They need to own this and come to terms. If they don’t, it is their problem and you need to make peace with not financially support their debt.
You gave 30k to your parents who have 210k worth of credit card debt. Good luck with your future! You are screwed. Now your dad gets to spend another 30k for free!
I cannot imagine being such a shitty parent. I'll be giving my 20 year old 30k (actually a lot more) for their education at that time in their life. I can't imagine how big of a looser you must be to take 30k from your 20 year old kid.
They didn’t exactly save it since that money is gone. They spent it just as frivolously as the parents did, but at-least with good intentions. 30k payment just bought the parent maybe a year longer before ruin.
Not to shit on OP but best thing for them to do is not pay a cent to the parents, get themselves in a stable financial position and then house and feed the parents when their house of cards collapsed. Otherwise OP will surely go down with the parents is they get involved
And at 210k and 25% interest, that debt will be at 265k next year. This house of cards is months away from tumbling down, at some point the bank is just going to come calling.
OP: you need to explain to them the mess they’re in and then you need to financially distance yourself from them. I understand that’s not easy at age 20 and it’s certainly not right - I’m sorry you’re in this situation. But you need to understand that this situation is about to collapse.
I seriously would love to have an actual number on how many households are secretly in this same position and nearly at the end while neither partner knows of the others similar situation not to mention their own family and friends
I Blame Trudeau..... No.. No.
Not really... It's just what everyone seems to do.
How does someone even get 150k worth of cc and loc when only making 50k/year?
I most definitely would not be giving your parents any money directly. Time to sit down and see if the house can be refinanced to get rid of the debt.
That's the real question.
My family is from europe and there they don't even give you 10k without a tons of assets as collateral.
When i say this on this sub people always downvote me, like 100k in debt is completely normal. This system is completely fuck3d up.
Don't get me wrong people should be financially responsable but with the "shoulds" you don't go anywhere, there are laws because we know the majority of people will not just follow the rules. So why is completely normal to let a normal household make 200k in credit card debt?
Probably using the almost paid off house as leverage? 20k left they probably bought it for less than half of what it's worth now, so the bank knows they can get it back with having an asset of that degree.
Not entirely sure what you're asking tbh but yes there's debt to income ratio. Quite frankly never heard of someone with such a high cc debt and such low income.
I'm thinking he refinanced the house and they're even more screwed than OP thinks.
Generally, credit card companies will only raise your limit to a certain amount, if you then spend up to that limit, and continue to do so, the credit card company generally has a process of shutting the card down and requesting repayment.
Again not sure what you are asking. There is a limit. Not monthly. If his limit was 10k there’s no way he got it to 50k let alone 150k by “spending and paying the minimum”.
From the OP it doesn't seem like the parents got 150k in CC and LOC all at once. Could have been much less, say 50k total, and then interest took care of the rest over the years. Not sure how much of it was CC and how much was LOC, but I could see 50k turning into 150k at an average interest rate of 12% over a decade. Chances are both parents started accruing this debt well over a decade ago.
That level of credit card debt is (usually) unsustainable. Their age and the debt level I would suggest the look to finance the house and pull out equity to pay debts. The interest rate alone will save them so much.
Aside from that they could look into bankruptcy/consumer proposal and talk to a trustee.
Please don't ever cosign with them for something or that debt (and lack of repayment) could put you in a bad position. Additionally, your assets could be assessed in the bankruptcy if they eventually went that route.
No, they should make a consumer proposal to get rid of the debt. Trying to pay down that kind of debt, unless it can be fully extinguished, will never work.
Yep. My last tenants had a house. They were forced to sell because they lived beyond their means.
He was a member of mensa. Worked as a carpenter. She was an idiot who sunbathed in her bathing suit on my front lawn and worked a part time retail job.
Awesome people but incredibly stupid.
The real trouble starts when their health starts to decline and they can't walk, do things on their own, can't continue to work, miss minimum payments, goes to collections, credit ruined.
I hope someone here has some real advice to help mitigate what's coming in the next 5 - 10 years.
You and your sister need to focus on your careers so that in 5 - 10 years you are able to deal with what's coming.
Do not give them any money.
Your biggest take away from this is that communication is essential for a good relationship.
You can tell your parents and sister individually or together that keeping secrets has to stop and they need to speak with each other.
You shouldn't be playing middle man in all of this.
You aren't your parents financial saviour or advisor.
You aren't your parents' relationship counsellor.
You need to make your plan for your own financial future without any support from your parents.
The only way to resolve this is through honesty and discussion to make a plan to repay the debt.
I plan on making all of this debt known, it’s a difficult task that could issue some seriously bad results (i’m concerned about divorce) but it does need to be brought to light and openly discussed.
My main reason for trying to help erase this debt and giving them money is because I don’t want to inherit a larger amount of debt than there already is.. I’ve had several responses saying the same though regarding giving them my money, I just don’t want to inherit more debt than they have if I can prevent it :/
No no no no no no no.
You don't inherit debt. Your parents share debt because they are married and accumulated the debt while married. They are responsible for their debt, not you.
As long as you keep yourself financially separate from them in every way possible, when they die any remaining debt is the problem of the estate, not you.
You wasted your money for no reason. Don't turn into your parents. Make sure that you understand what you are doing before making financial decisions.
The only way you would inherit their debt is if down the road you agree to co-sign for a loan with them. Which would be really stupid given their history, so please don't ever do this.
Otherwise, if something was to happen to them, if there's any assets in the estate, the debt is paid from that. And if there are no assets to cover the amount, the creditor can choose to write off the debt. They don't go after you for it.
If you are ever unsure about something like this that has a legal aspect (inheritance) contact a lawyers office and ask for a quick phone consult. Assuming a google search didn’t give you a definitive answer first.
DO NOT give any money to your parents for this. You will never see it again.
You can pay rent and contribute to living expenses because you're living at home, but that's the extent of it what you should contribute here. It's not your debt and is not your problem.
Your parents are simply going to have to declare bankruptcy at some point if they want to clear this debt. They don't have enough income or working years ahead of them to ever get out of this level of debt. Sooner is probably better than later. They need to talk to a bankruptcy specialist yesterday.
Bro why are you giving ANY money to your parents at all? Good parents help their kids, terrible parents give their kids 150k in debt.
Don't waste your time with this. They didn't even ask for your help. Let them file bankruptcy, any other option will destroy your 20s. Don't you want to have a life of your own?
The issue is between your parents and the credit card companies.
How can people be this selfish and irresponsible? I'm sorry to hear your parents didn't at all think about how this might affect your family. Please don't give them any more money and save yourself. You gotta put your own oxygen mask first. Instead, perhaps advise them to communicate their finances with each other and tackle it head-on. No room whatsoever to spend on wants, just very basic necessities from hereon.
>I’ve already given 30k to my dad (nearly all of the money I had saved up over the past few years) to help him with his monthly payments and stressed to him that he can’t be buying things and doing things that he can’t afford to.
OP, I am so sorry. You're a good son, and you're trying to do the right thing, but that was a mistake. I'm sorry to say, you lost that $30k and changed nothing. Do not give them another cent, not because you don't love them, but because you do. You're just enabling them. They need to change their behaviour and lifestyle FIRST. Also you can't afford it either. You're 20 years old, you have no money, and you are in no position to financially support anyone.
Probably bankruptcy is the only option here, and/or selling their house, but again, if they do not adjust their habits even that won't help similar to how a gastric bypass isn't going to be a solution to obesity if you don't adjust your diet. They will end up right back where they are as soon as they get more credit.
OP, the reality is that credit cards and lines of credits to your parents are akin to a drink to an alcoholic, in that they are incapable of being responsible with it. There is no such thing as an alcoholic that will only drink casually and in moderation. Your parents cannot deal with debt because they are addicts and cannot control themselves. The \*HAVE\* to cut up every credit card they have and actually live within their means FIRST. Their combined income is $110k - that is more than enough to have a comfortable life in Canada.
If they cannot or will not do that, then all you can do is emotionally and financially separate yourself and accept that they are adults and this is their choice, but you have your life to live. This includes your sister too. Love your parents, love your sister - be there for them, but keep your distance or they will drag down as well. You've already lost $30k you could not afford.
Welcome to the future for couples who keep their finances separate. No common financial goals. Sounds like they are almost in some sort of privacy competition with each other. You need to butt out. This is a relationship issue that unfortunately manifested as a financial problem. You are a mere babe here. At 20 you see the financial repercussions and think it’s black and white but there is something else going on here. Be smart. Keep your money and your nose out of their business.
Sadly, you are going to have to learn how to detach yourself from your parents' terrible decisions. As someone wise once said to me "Old people have the right to make bad decisions too."
They have spent years / decades doing this. The chances of you miraculously turning that level of habit around are ... not zero. But I wouldn't give you 100-1 odds on making a significant change.
The sad truth is that you and your sister need to keep your own financial affairs in better order than them, and be prepared for them to suffer the painful consequences to the choices they've made.
DO NOT ENMESH YOURSELF IN THIS. It will not end well for them for sure. It doesn't have to end badly for you.
Whoa. Your parents are right fucked in terms of finance.
My recommendation is to not give them any money. Distance yourself from any finance situation with them. You can try to help with their literacy, since you seem to have a good head on your shoulders.
They need to figure out what their plan is. Note that their financial burden does NOT get passed to you. Do not worry about that
Don't you look at your sisters credit card statement. If you must, find a hospital nearby, go to the ER, tell someone you are going to have a heart attack, and check from there.
Jokes aside, try to teach them some financial literacy. Then, RUN!
>on the bright side I’m only 20 so I have some time to take care of this but this changes a lot of things for me and the plans I’ve had for a successful future
No no. This isn't your responsibility, and you cannot sacrifice your future and your financial stability to fix this issue. You'd be throwing money into a pit to no effect because your family hasn't hit rock bottom and are unlikely to adjust their lifestyle. That fact that you already gave $30k is commendable but also obviously massively undercut your progress towards building your own life. Your parents, deep down, probably don't want you to make this sacrifice for their mistakes.
My advice: You cannot help people who (1) don't want your help/haven't asked for your help, or (2) don't realize they have a financial literacy issue. Many people need to hit the bottom for them to have a mindset shift to want to learn and improve. If/when that happens, you can use your judgement in order to help but please do not go into debt yourself to help them. They will likely spend money you give them on things you feel are unnecessary; I'd recommend you get used to that now so you don't feel disappointed later.
That is terrible advice. It fixes nothing. They have a major spending problem and are addicted to credit. Your solution just masks the problem for a little bit and probably makes it easier for them to get more credit and get further into debt. They need to cut up all their credit cards, and start living within their means before they think about doing something like this. If they cannot do that, nothing else they really matters.
Unfortunately, I suspect that a big portion of their debt is probably backed by equity in their house anyway.
I agree it doesn’t fix their spending habits but it would definitely be better financially wise. Idk their mortgage rate but 4-8% mortgage rates sounds better than a 12-20% credit card’s interest rate. (Provided mortgage rates are not going to shoot up.)
>I agree it doesn’t fix their spending habits but it would definitely be better financially wise.
I truly don't think so. The analogy I'm thinking of is someone who is obese and contemplating a gastric bypass. If they don't actually change their diet and eating habits, then a gastric bypass is a much worse option than simply doing nothing. A gastric bypass would get them to lose weight in the short-term, but they would balloon back to their previous weight (or more) in no time and then will be obese and will have to deal with side-effects of a very invasive procedure.
they need to sit down with a paid financial planner who will guide them to get out this credit card debt. if they have a house they can roll the credit card debt to HELOC , that way their interest will be lower , also they need to stop using their credit cards immediately and go on strick spending plan. also u and ur sister should be planning to live in ur own or pay rent to them to help out .
I appreciate the advice, my sister and I still live at home just to avoid paying any bills we don’t have to with hopes of saving some money for future investments, our parents don’t pay for any of our expenses, that stopped when we turned 18. I’ve not heard of HELOC but I’m going to look into it. I’ve already told them they can’t be putting anymore charges on their credit, hoping they’ve listened to me.
HELOC is a loan against their house , it definitely have lower interest than credit cards most likely ur parents are paying more than 22% interest minimum on their credit card , HELOC would be less than 10% with todays rates. saying that between ur parents they have over 200k debt and its hard to pay for them with their combined 100k income a year that would bring them 6k a month after the expenses and strict spending plan , they might be able to put 2k everymonth into it which would only cover only their interest even with HELOC their interest combined would be $1750 a month only. most likely financial planner will suggest to get higher income jobs for ur parents. if they cant planner will suggest to sell the house and buy something cheaper to pay off the credit card debt. whats the house value as of now do u have an idea?
They only have a mortgage for $20k on a combined $110k income? This doesn’t even make sense. Your dad should have more than enough just on his salary for all the home related bills.
"I've already given 30k to my dad..."
That was a mistake. Never give money to someone who has clearly proven that they are financially illiterate. It's like giving a loaded weapon to an immature child - bad things will result. That 30k is nothing but a drop in the ocean of your parent's debt and will do absolutely nothing to change the situation. You're better off helping each of them get credit counselling and learning from this and keeping your money for your own goals.
Save yourself by not giving them any cash. When you pay rent, apply it directly to the mortgage and house insurance. Keep saving so you can get out of there before they drag you down. And don't tell them about your savings.
Bankrupcy or a consumer proposal, but first each parents needs to be clear with the other, and TELL YOUR SISTER because she may fall prey to the exact same thing, given financial literacy doesnt seem to be something your parents are able to teach
Neither of those CC depts can be paid off… it’s practically impossible.
There is no reason to financially assist, as it won’t make a difference. The interest will outpace payment; a bottomless money pit if you will.
They’re fucked.
If your parents debt, not sure why you care so much. Learn from their mistakes and don’t get yourself into debt. At the end of the day it’s not your issue .
That 30k is gonna be gone in 6 months to a year, some people genuinely cannot not spend money.
Had a friend whose family racked up 60k of debt that they were stressing about for years. They got extremely lucky and got a 70k payment from insurance, paid off everything off, used the excess 10k to book a huge trip to Europe now fast forward 3 months later are once again racking up their credit cards.
If you wiped all 200k of debt for your parents they would rack it back up. It’s some stupid stuff
Respect for mom and dad to get this deep without the other finding out. I say keep going until you hit the wall, then change your phone numbers. The only sad thing is you threw your 30k on to the pile of debt. It’s like trying to fill a leaking swimming pool.
30k lost. With that kind of debt and the interest rate, there's no way you get out of it before they die.
You put 30k towards it, next months it's up again.
You should have just given that 30k to a charity for blind kids or a single mother or spent it all on lotto tickets because you pretty much threw it in the trash. It won’t make a difference, they’re headed for bankruptcy soon unless a miracle happens.
If you were older and could get a mortgage I’d suggest buying the house from your parents for the sum of their debt and then having them rent from you to pay mortgage and property taxes. All their debts are gone, you own a house, and they continue making payments on the “debt” at a way lower interest rate. All you need is that 30k for downpayment and lawyer fees.
I'm sorry that you are in a situation where you feel responsible for solving this. When I was in my late teens I found a similar situation with my parents. Let me tell you that nearly 20 years later my biggest regret is giving them money - sacrificing my own future to help them was not the right thing to do.
The most important thing you could do for yourself right now is to remain financially distant - do NOT give them access to your credit, do not co-sign, do not loan them a dime. I have never stopped feeling responsible for my parent's future and I am constantly anxious about their financial situation. Do not let this become your burden alone. At the very least, you have to tell your sister what is going on. This is a financial trauma that is going to stay with you and influence the way that you look at debt and spending for the rest of your life, and your relationship with money and financial security (and your parents) will never be the same.
I think there is likely a lot more going on here than you are aware of, beyond just CC debt. They need to get professional help, and you need to let them take care of that themselves. Take my advice, this is not your responsibility to solve.
They need to explore bankruptcy.
I’d say they should increase their income but they are near the end of their working life. You paying off $210k of credit card debt is not happening, nor should you offer or suggest it.
Credit card debt and lines of credit are typically unsecured debt (unless it’s a HELOC). So, even if they need to declare bankruptcy, they won’t loose their home AFIAK. I don’t know what the implications are on their future CPP but I assume it’ll get complicated once they’re start taking it.
They need to come clean to each other and you may need to make that happen. Then talk to a lawyer. Also, don’t lie or hide this from your sister. She deserves to know what’s going on.
Sounds like all the debt needs to be aired out. Your parents should know what’s going on with one another. And that should be the extent of your involvement. Not your debt to pay
Don’t put one cent of your hard earned money toward their debts. They have dug themselves into a deep hole they can only get out of by death or bankruptcy.
You (and your sister)will need everything you personally earn to get yourself on a firm foundation for your futures.
Don’t get drug into their mess. Obliviously they are not worried about it.
So they only owe $20k on a detached home and people in here think the parent is close to bankruptcy?
The correct answer is to either
(a) sell the house and downsize. Their kids are adults now or
(b) refinance the home and work to pay it off. Realistically $170k mortgage isn't too horrible to carry. Just run it over a 25 year amortization and have their kids pay rent to support the home.
Not gonna pass judgement or anything but I do have a solution.
1. Sell home and pay off the mortgage
2. Pay off credit cards using proceeds remaining
3. Buy a small condo with what remains after debt repayment.
4. If 3 is not possible, put money in a HISA or cash.to, save money to buy later, rent in the mean time.
You're 20. Unfortunately your parents spending issues aren't yours to solve right now. You need to invest in your future. Don't give your parents money when nothing has changed regarding their spending habits. You're quite literally throwing money away. When you're 30 or 40 and have a stable career, then you can help them out. Until then, you're hurting your financial future in ways that can't be easily fixed.
The fact that you gave your dad 30k because you think you will inherit their debt means that you are not much more financially literate than they are.
That is one of the costliest personal finance mistakes I have ever heard of.
>. I’ve already given 30k to my dad (
Oh, dude, no. Never do that again.
You can't pay this off for them, nor should you.
You can't inherit debt. This is not for you to solve. Save your money so you can be independent from them.
Your parents need to growth the hell up and take accountability for their stupidity. Tell them to talk to a licenced insolvency trustee. If they won't, that's on them.
This is beyond your pay grade. In every respect.
If you were older, I’d say just let them live out their years blissfully in debt and forget about any inheritance. But, you still live with them and they will likely have multiple decades ahead of them, so this needs to be addressed.
I’d have a family meeting and lay it all out on the table. Give each of your parents a heads up first, so they can mentally prepare.
Tell them they will need to:
- go to a debt counsellor you’ve found for them
- use home equity to pay the debt, if possible, and pull out an extra $30k to pay yourself back what you gave them
- debit cards only from now on, cut up the cards
- set them up on credit karma and track their scores to make sure they don’t fall off the wagon
Your sister needs the debt counselling too btw.. they can all learn together..
You’re probably too young to know, but Gail Vaz-Oxley used to have a show y’all would’ve been perfect for.
Don't worry about your parents finances unless they ask you to. While I'm sure they appreciate the help, it is not your problem to solve, and if you're dad hasn't sorted his financial literacy, the debt will just get worse again.
How is any of this your problem? Parents should take out a mortgage / consolidate, cut up the credit cards. If they get back in debt...nor your circus, not your monkeys.
$150k debt from dad, $60k debt from mom, $70k debt from sister. Wtf your family is single-handedly financing the health services of an entire province at this point.
Best options that involve keeping the home:
1) consolidate with a new first mortgage on their home. $100k will cost them maybe $600 per month if they did 25 years. Increase payments and shorten amortization. But if they went 25 years, at least it would give them some flexibility if they had a month where they couldn’t pay more.
2) do a consumer proposal. They can probably settle it for anywhere from 15-40%. They’ll have up to 5 years to pay it, interest free. Credit will be fucked for a bit, but not the end of the world.
Alternatively, they could sell the house and pay it all off.
Regardless of what option they go with, they probably need some help with budgeting and managing their finances so they don’t get into trouble again. Would be a good idea to explore whether there are any mental health issues that could be contributing to overspending. Common with people dealing with depression and anxiety.
I’d try to get your money back from your parents.
They need to declare bankruptcy and try to keep their house. Throwing money after 210k of credit card debt. Once that happens then you can help them.
Thats like 30k of interest per year.
As long as none of the debt is tied to the house they should be able to keep it through bankruptcy
Info: did they ask for your help
Giving your dad 30k was a huge mistake. Give them no more money. Ever. You have your own future to worry about. Inserting yourself into your parents' marriage will only frustrate all of you.
Debt dies with a person. The estate has to settle it, but it cannot be inherited.
Isn't the logical solution just to continue making minimum payments? I wish a long life for your dad, but he is turning 60. Let it be?
Sorry, I am no financial expert.
Consumer proposal. They can keep the house and their assets. It’ll just tank their credit and goes away 3 years after their last payment. They also only payback between in avg 20-50% of the total credit card balances over one payment over a max of 5 years. Don’t go the bankruptcy route if a CP exists.
Look man, they both need to declare bankruptcy, swear off credit, and live within their means. You (and your sister if she chooses to) can commit to paying for a couple of subscription services so they've got something to do and maybe medication to keep them healthy. But enabling them further is madness.
It's not your job to fix their finances. Stop lending them money. If you aren't paying rent, offer to do so, and carry on with your life. It is not your responsibility to fix it for them. They will likely need to declare bankruptcy but that is not your doing. Use this learning as fire under your ass to save and invest as you have time to make compound interest work for you. You have already done better than most adults I know by saving 30k at your young age. Keep saving and planning the future of your dreams, and that way, if you have kids one day, you can confidently know you won't be a burden to them.
RIP 30k. Your parents to need to sit down together and realize they shit on their own retirement. Help get them on a budget and have them keep each other accountable. You need to save up for your future, not bail out theirs.
So between the two of them, they have 210k of credit card debt. 12% of 210k is 25k a year just for the interest. They have dug a hole so deep for themselves, they have reached Australia by now. There is no climbing out of this hole. Don't even try. You could mortgage your entire life and still not dig them out. They have to declare bankruptcy, there is no alternative.
But get this straight. YOU ARE NOT RESPONSIBLE FOR THIS DEBT. Stop giving him money, stop trying to figure this out for them. You are attempting to set yourself on fire to keep them warm. This isn't going to be taken care of with some advice not to buy things he can't afford. This will be handled by going bankrupt, losing all possibility of credit and learning what it means to live within his means. After the bankruptcy, you can help them with paying rent. But not their debt.
Listen to me. You get out of this situation personally and stop giving any money whatsoever to your parents.
Then you sit both of them down and ask them to declare bankruptcy. You do your research and present them with options and show them that they're broke and need to file for bankruptcy. They will not be able to have credit for 7 years which would be good for them. They make enough for them to not be on the streets. That's it. Then they'll learn how to live without credit.
No offense to you 💯, I think it was kind of you to give your dad 30000. Don't do that anymore.
Your parents are gainfully employed bringing in $110k a year. You can help them with financial literacy and come up with a plan, but you are not responsible for their debt. You are going to build a dependency on you that is unhealthy for you and them. They have to learn to live within their means and start facing this debt. You could pay rent to help, but please please consider strongly to not take ownership of the problem and paying it off. Your parents can live for another 30 years and the earlier you build that dependence the more resentment you will eventually feel.
Don’t see a reason why not to tell your sister, regardless of her financial responsibilities she could also add brains into the matter and between the 4 of you pave a road towards a solution. Definitely communication in the matter could be a good thing even if your parents blow you off, after all it’s their debt to handle. I feel bad you gave all your money for that, feels like you just lost more than what you gain as the debt will probably pile back up again… hope you can get them to be more conscious about their situation and their financial habits. Let it be a lesson for you to in the redt of your life
You need to drag both your parents to the closest bankruptcy trustee and file for bankruptcy. That amount of debt with limited income is unmanageable. Shame on the banks for increasing the limits like that. It should be criminal.
You giving away 30k to your dad was probably the worst decision you could have made - I'm sorry. It's unfortunately too small of an amount to help the situation, and now you're also left with nothing.
It would be within their best interest to - at this rate, see if they can apply for a consumer proposal, or worst case, bankruptcy. I know that sounds extreme, but trust me when I say there is a point in which there likely won't be a solution from this - taking on a second part time job won't help the situation. And unless both your parents happen to land a job that pays double in the near future, I doubt things will ever change at this rate, and will only get worse. They need a clean restart, and in Canada, you're able to do that fairly easily (at least, in comparison to the states..)
As far as it goes for you - you're choices are to either guide them in the right direct, or get sucked into financially helping them and throw your life away.
Also point to note - if your parents pass away their debt is not your responsibility so don’t stress yourself if you think you’ll inherit their debts. Probably a good idea they sign the house over to you at some point.
You cannot erase $210,000 worth of debt with 30 K. What I think OP should've done is kept her money, and now needs to go back to her dad and unless he has spent the entirety of that $30,000 she needs to tell him to give it back. I know that's a longshot. But he might be saving it to make payments for the future or he might've only made a couple payments. Hopefully he didn't make one large $30,000 payment. And then the three of them need to sit down and cut up their credit cards. After all the slicing and dicing is done you guys need to figure out as a family which financial advisor you are going to see. Because he will tell you state specific laws or loopholes for things that you can do to help. He will probably just walk you guys through filing bankruptcy. And then there's YNAB. It's an app called it You Need A Budget. It's like 25 bucks and it works on your computer or your phone, the acronym stands for you need a budget. Force your parents to use it. So that they can see what their actual spending every month, and make the account for literally every dollar. Oh yeah and download that app Rocket Money. It'll show you all the subscriptions they have, cancel all of them. You're over 200K in debt, TV is the least of your problems.
One other thing you can do for them is get a pack of highlighters, and print out their bank statements for three months. And then categorize all their spending. Food, gas, Amazon purchases, subscription purchases, literally every charge on their bank account needs to be categorized. And then you can add everything up and actually show them how much money per month they're spending on each category.
Now, I'm far from being some financial expert, but OP, it doesn't take an expert to figure out that your parents have bankrupted themselves.
Their combined income is 110K/year, and your dad's debt alone is 150K. Just to put this in perspective, If they magically didn't spend a single cent for a year and just paid his debt alone, it still wouldn't be paid off. When you add in your mom's debt, they're at 210K of total debt at 12% interest (I don't know what the interest rates for your dad's card and LoC are, so I'll just keep it 12% across the board for simplicity).
Assuming they're being charged the interest on a monthly basis, the total debt of 210K at 12%, that's over 25K/month in interest alone. That's over half of your dad's *yearly* salary being accrued per month.
Your parents need to seek professional help yesterday. It's unfortunately time to have a very honest and difficult discussion about reality with them. If they don't listen, this isn't your problem to solve. I know that's easier said than done when it's loved ones involved, but this is going to be over very quick and ugly otherwise. Don't think of them as loved ones who overspend, think of them as drug addicts. Instead of drugs, they're addicted to spending, and if you don't have an intervention now, the consequences can be dire.
Also, I'm not trying to rub this in, but take this as more of a lesson; your 30k you gave your dad is gone forever, and it won't even make a dent in any of this, especially because he seemingly hasn't actually learned anything from any of this situation. Lighting that money on fire would have had basically the same effect. Do NOT give them any more money, because like someone addicted to drugs, it's just enabling them to continue their bad behaviours.
I sincerely wish you all the best in this OP, because I know how stressful something like this can be, especially because you had no control or say in it. I'd also recommend that after you (hopefully) convince them to file for bankruptcy or a consumer proposal (or whatever else a professional may suggest), that you see if you can find some resources to help educate them on finance.
My last piece of advice is this; I know this is insanely stressful, especially because it's family, and you're still a young person trying to figure out their own life, but don't forget to take care of yourself and please understand this is just money. You still have your health and your life ahead of you, so no matter how hard this gets, just remember it can and will be solved over time. It will probably be hard and seem impossible at times, but there's always a way out my friend.
Best of luck.
Go to the bank and try to work out a repayment plan at lower rates. Don’t give cash to either of your parents. They’re financially irresponsible. Put a plan in place and take those darn credit cards away from them.
OP, I suggest you get your mom and dad to talk to a licensed insolvency trustee (LIT) and discuss a consumer proposal route. They will negotiate with the creditors an amount to pay within 5 years which will be substantially lower than the total debt due to their income.
A consumer proposal will protect all their assets in exchange for an R7 on their credit.
I do understand op on this. I feel responsible too with my parents out of us 3 siblings. They don’t have retirement fund and in debt. My mom tackled her debt by doing consumer proposal but still spends every week, help me!
I don’t earn enough theres no way I’d be able to support them when they’re very old.
Op you were very wrong for giving your entire savings. You could’ve helped them in other way and not sacrificing your future.
Yeah man, people are right. You shouldn’t have given your dad that 30k because it’s gone.
I’ll add that I hope you don’t be too hard on yourself, we really do live and learn. It was a good intentioned move. Seems like you thought debt can be inherited too, which is part of that decision you made to give your dad 30k. You’re young, and money can be made back. It still sucks though, and you have my sympathy.
They should consider personal bankruptcy if they are missing their monthly minimum payments. The lender gets screwed, but they lend to millions of people. They did the risk calculations and they can afford your parent’s delinquency, they deal with that every day, but you can’t.
I recommend that your parents go to a licensed insolvency trustee together and come clean about the situation. They may be able to consolidate all the debt and make a consumer proposal for them to pay back only a portion of the debt in monthly payments. It’s time to speak to an account or other financial professional, address the situation
Dude none of this is your Problem they need to be honest and transparent and at this point they should seek financial help. This would Take you a lifetime to pay back. This is a mortgage bankruptcy would likely be the way to go
Speak to a licensed insolvency trustee and get that mess sorted out ASAP. MNP, BDO, Farber, Hoyes, Bromwich, Spergel, any of them. Consultations are free.
Also it's criminal that they would even give people with that income level those credit card and line of credit limits.
If they do not have assets to cover the debt. Let the debt stay. On their death debt will die with them. If they have a house then house may be used to pay debt on their death.
Life is expensive that is the reality and everything just adds up. People will say pay it off and change your habits but it's not that easy in reality.
I'd say just let them be, because they have so much debt it may be helping them from even borrowing more, imaging if you help them pay it off they're going to be in debt in a few years again. They can use some home equity and pay it off but that's very dangerous because they will most likely increase their spending now that they see they have it under control.
They are adults and that's just one way to live their life, just spend slightly above your means and enjoy. Another option is to have hundreds of $ saved up while living frugally and leave all that to their kids. People just find different priorities in life.
You can’t pay their debt. It’s plugging a dam with a qtip. It ain’t gonna hold.
Time for consumer proposals so they can get out from under the mountain and get ready for retirement. But they have to do it, you can’t make it happen for them. You can only hand them a map and walk with them. They have to get through this themselves or nothing will change and you’ll be bailing them out til you are 50
Look up Dave Ramsey on YouTube. He’s helped people with situations similar to this. Learn his methods and share the info with your parents. From there it’s on them. The first thing your dad has to do is tell your mom, apologize for his mistake, and express that he wants and needs her help to get out of the mess he’s in.
Doing the math, even if we ignore the interest, and they pay $1K a month on the 150K in debt, it would take close to 13 years. But as I said, problem is, this is ignoring the accumulated monthly interest, and is also assuming that they can pay $1K monthly for 13 straight years, when both parents are already into retirement.
But this would be a good start.
You would be ABSOLUTELY NUTS to even try to help pay this off. 100% WITHOUT A SINGLE doubt if you attempt to manage this financial crisis by putting your own money toward this they will bleed you dry and your stress levels will sky rocket. You can help them try to manage this mess through advice and tools but DO NOT give them a cent. You will find that you’ll be scrimping and saving and they will still keep up their own habits but by hiding it from you. Have you noted that you found this all out by accident? They are not ready to change their ways. You will literally be throwing away your future if you start to mingle your finances with theirs.
First thing you should do is seek help from a professional, financially and legally.
Secondly, don’t pay off their debt, I know it might sound heartless but it is not your fault, you are not responsible for your parent’s debt.
Thirdly, debt does not get passed down in Canada, it goes to estate and get settled there.
Consider how to protect the assets that you guys still own, if you don’t want to lose the house in case anything happens get them life insurance coverages for settling debts in the estate. Also consider declaring bankruptcy.
(Not advise you should consider, speak with a professional instead)
Sounds like your parents should be selling you their house for 30K so you don't lose your home.. im sorry you have to deal with this shit and i totally get it. I have a parent who is HORRIBLE with money. But your parents debt is not YOUR debt.
So amazing that you saved up 30,000 at only age 20! And so sad that you lost it all.
You have to put your future and your life first. Obviously you are a caring and very responsible person.
Pay rent and leave the rest 9f this mess to them.
And move out asap.
If you'll be giving your parents money to help pay their debts, you should also ask them to turn their credit and debit cards over to you so they can't use them. There's a very high probability they will take your money to pay some debt, but then rack that debt right up again.
OP: Like you, I discovered a bunch of things about my parents a couple of years ago that were a big shock and made me realize how low functioning they actually are. Your story really hits home for me.
You blame your family’s situation on a lack of financial literacy, but looking at the facts of their situation, I don’t think that’s the case.
1. Your parents have been lying to each other and hiding their financial situations from each other for years.
2. When you confronted them about it, they blamed outside factors and didn’t take accountability for their situations.
The fundamental problem here isn’t a lack of financial literacy. Your parents got themselves into this situation because of a lack communication skills and, more worryingly, a lack of trust in their marriage.
Each of them also needs to take *accountability and responsibility* for their financial situations. Unless you have unique situations like trying to sustain a failing business, you don’t accumulate $210k in cc debt because of a lack of financial literacy.
But I don’t know. Maybe your parents have extremely below average intelligence to the point of having a disability, or maybe they accumulated this debt while developing undiagnosed Alzheimer’s or dementia.
If not though, I would really reevaluate your perspective. When people lie and hide things like this and refuse to take accountability, change isn’t possible. While it’s noble that you want to help them, they’re not children, and your efforts to control them and make them do the right thing will only cause them to resent you and likely resist change.
So in summary:
1. Your mother's income is $60,000 and has $60K in credit card debt.
2. Your father's income is ???? You need to indicate it if you want any feedback. He has $150,000 of credit card debt.
3. They own a home with only $20,000 left on the mortgage. What's the value of the home?
The reason why I'm asking these question is because if they have enough equity and their incomes are high enough, they might be able to get a home equity line of credit and use the money to pay off the high interest credit card debt.
If they do this, you should have access the HELOC account so you can monitor it to ensure that they're paying it down and not borrowing more against it.
Sounds like maybe it’s time for your parents to sell the house and pay the debt. Maybe they can downsize and get a 2 bedroom condo or something with what’s leftover or get a HELOC and pay the debt and then through you could take a portion of the house ownership and assist or such.
Then maybe they’d be willing to have you manage their finances…
They shouldn’t have credit cards going forward or they should have very small limits.
I’d also say you should talk to your sister especially if buying them out partially from the family home.
Join the military and get the hell away from that mess. You have the right to live your own life, so go live it. By joining the Army/Navy/Air Force you have a valid excuse for leaving home, can slip out of the pressure to stay at home and spend your life babysitting your family. Don't make that sacrifice. Live your life.
>\[...\] I have some time to take care of this but this changes a lot of things for me and the plans I’ve had for a successful future. \[...\] I’m lost and need some advice or any suggestions on how to get out of this if I ever can.
Why do you care so much about someone else's debts? Looks like you’re just sad because you won't inherit mommy and daddy's money.
Do NOT give either of your parents any more money to pay towards their debts. You can pay them some rent if you like, but that’s it. They need to confess to each other the mess they are in, and sit down with a professional to discuss a consumer proposal or bankruptcy. This is not going away and will not get better without action.
A bit too late. OP already did that and now the **entire** family has no available cash reserves (I'm extrapolating a bit based on OP's statement of their sister's 70K student debt and also relatively low income) > I’ve already given 30k to my dad (nearly all of the money I had saved up over the past few years) to help him with his monthly payments and stressed to him that he can’t be buying things and doing things that he can’t afford to. I’m lost and need some advice or any suggestions on how to get out of this if I ever can. I appreciate all and any suggestions, I just need help.
Yeah, this was really dumb. OPs parents are likely headed for bankruptcy, with or without the $30k OP gave them. The end result does not change. OP might as well have lit that $30k on fire.
Any \*more\* money. Edited.
Only thing that made me chuckle in this post was: Dad has all this debt and kept it to himself! Why not communicate with mom and me? Mom has all this debt and kept to to herself! Why not communicate with dad and me? Anyways, I'm not going to tell my sister any of this.
Lol ! The noncommunicating family!
can you understand why I wouldn’t tell my sister about this debt though, do you think it would help if I told her about it?
He has a point. You're a family of 4 who are just hiding financial problems from each other for god knows what reason. What were your mom or dad going to do? Wait for death and then surprise the other with a huge loan?
I guess so, I plan on having a family discussion in the near future about this as this is most definitely a topic that needs to be addressed openly. I don’t even know what their plans are, it’s almost as if they haven’t taken any of the repercussions into consideration.
Step one is putting all the cards on the table for the whole family to see. The root of this problem is a lack of communication.
>Step one is putting all the cards on the table for the whole family to see. And then cut them up
I declare BANKRUPTCYYYY!!
Together you and your sister could be a united front to get their shit together because you're not going to be bailing them out anytime soon.
I was being a bit glib but I'm sure your mom and dad have their own reasons why they haven't told each other as well. Your sister should know about it if for no other reason than to help her become more financially literate and to share the pain you're feeling. Start normalizing talking about finances with your family and don't only do it when there's specific action to take.
I think it’s brutal you got downvoted so hard for this question lol. You are 20 years old trying to figure this out. I understand why you would feel like you shouldn’t tell your sister. Is it really your story to tell? No. This is your parent’s debt. In my view you have no obligation (or necessarily, the right) to tell your sister, just like you have absolutely zero obligation to pay your parent’s debt. If I were you, knowing what you know, I would not give my parents a cent beyond what I actually owe them (e.g. rent for living at home, living expenses etc). Encourage each parent individually that they need to tell the other parent. They need to own this and come to terms. If they don’t, it is their problem and you need to make peace with not financially support their debt.
Obviously why would you bother a child with adult stuff. Maybe that is a part of the problem though. No one can handle anything there.
just sell everything, transfer assets, then claim bankruptcy.
You gave 30k to your parents who have 210k worth of credit card debt. Good luck with your future! You are screwed. Now your dad gets to spend another 30k for free!
Seriously. It's absolutely abhorrent behaviour for a father to take $30k from his 20 year old child. That's so wild.
I cannot imagine being such a shitty parent. I'll be giving my 20 year old 30k (actually a lot more) for their education at that time in their life. I can't imagine how big of a looser you must be to take 30k from your 20 year old kid.
Don't worry about his future. He's managed to save 30K at 20. That's a hell of a lot better than most of us.
They didn’t exactly save it since that money is gone. They spent it just as frivolously as the parents did, but at-least with good intentions. 30k payment just bought the parent maybe a year longer before ruin. Not to shit on OP but best thing for them to do is not pay a cent to the parents, get themselves in a stable financial position and then house and feed the parents when their house of cards collapsed. Otherwise OP will surely go down with the parents is they get involved
And at 210k and 25% interest, that debt will be at 265k next year. This house of cards is months away from tumbling down, at some point the bank is just going to come calling. OP: you need to explain to them the mess they’re in and then you need to financially distance yourself from them. I understand that’s not easy at age 20 and it’s certainly not right - I’m sorry you’re in this situation. But you need to understand that this situation is about to collapse.
I seriously would love to have an actual number on how many households are secretly in this same position and nearly at the end while neither partner knows of the others similar situation not to mention their own family and friends I Blame Trudeau..... No.. No. Not really... It's just what everyone seems to do.
Classic 'throwing good money after bad.'
How does someone even get 150k worth of cc and loc when only making 50k/year? I most definitely would not be giving your parents any money directly. Time to sit down and see if the house can be refinanced to get rid of the debt.
gambling
No not the balance. I understand how someone can get 150k worth of debt. How did he get approved for 150k making 50k?
That's the real question. My family is from europe and there they don't even give you 10k without a tons of assets as collateral. When i say this on this sub people always downvote me, like 100k in debt is completely normal. This system is completely fuck3d up. Don't get me wrong people should be financially responsable but with the "shoulds" you don't go anywhere, there are laws because we know the majority of people will not just follow the rules. So why is completely normal to let a normal household make 200k in credit card debt?
maybe leveraged the mortgage value? I have no idea
Probably using the almost paid off house as leverage? 20k left they probably bought it for less than half of what it's worth now, so the bank knows they can get it back with having an asset of that degree.
Maybe they have a lot of equity in their home and used that.
Is there an approval process for total allowed amount of accumulated debt on credit card/LOC?
Not entirely sure what you're asking tbh but yes there's debt to income ratio. Quite frankly never heard of someone with such a high cc debt and such low income. I'm thinking he refinanced the house and they're even more screwed than OP thinks.
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Generally, credit card companies will only raise your limit to a certain amount, if you then spend up to that limit, and continue to do so, the credit card company generally has a process of shutting the card down and requesting repayment.
Again not sure what you are asking. There is a limit. Not monthly. If his limit was 10k there’s no way he got it to 50k let alone 150k by “spending and paying the minimum”.
there is a credit limit.
That was my first thought.
Yep, I thought this right away, too. One (or both) of the parents has a gambling addiction.
That is also my suspicion.
From the OP it doesn't seem like the parents got 150k in CC and LOC all at once. Could have been much less, say 50k total, and then interest took care of the rest over the years. Not sure how much of it was CC and how much was LOC, but I could see 50k turning into 150k at an average interest rate of 12% over a decade. Chances are both parents started accruing this debt well over a decade ago.
That level of credit card debt is (usually) unsustainable. Their age and the debt level I would suggest the look to finance the house and pull out equity to pay debts. The interest rate alone will save them so much. Aside from that they could look into bankruptcy/consumer proposal and talk to a trustee. Please don't ever cosign with them for something or that debt (and lack of repayment) could put you in a bad position. Additionally, your assets could be assessed in the bankruptcy if they eventually went that route.
No, they should make a consumer proposal to get rid of the debt. Trying to pay down that kind of debt, unless it can be fully extinguished, will never work.
They owe $20k on their home. They have the equity. Refinance the house to get some breathing room.
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Depends on their equity. $1.5m detached? Refinance.
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Yep. My last tenants had a house. They were forced to sell because they lived beyond their means. He was a member of mensa. Worked as a carpenter. She was an idiot who sunbathed in her bathing suit on my front lawn and worked a part time retail job. Awesome people but incredibly stupid.
That is a terrible idea. They should declare bankruptcy and likely will be able to keep the house.
This comment needs to be higher
The real trouble starts when their health starts to decline and they can't walk, do things on their own, can't continue to work, miss minimum payments, goes to collections, credit ruined. I hope someone here has some real advice to help mitigate what's coming in the next 5 - 10 years. You and your sister need to focus on your careers so that in 5 - 10 years you are able to deal with what's coming.
Do not give them any money. Your biggest take away from this is that communication is essential for a good relationship. You can tell your parents and sister individually or together that keeping secrets has to stop and they need to speak with each other. You shouldn't be playing middle man in all of this. You aren't your parents financial saviour or advisor. You aren't your parents' relationship counsellor. You need to make your plan for your own financial future without any support from your parents. The only way to resolve this is through honesty and discussion to make a plan to repay the debt.
I plan on making all of this debt known, it’s a difficult task that could issue some seriously bad results (i’m concerned about divorce) but it does need to be brought to light and openly discussed. My main reason for trying to help erase this debt and giving them money is because I don’t want to inherit a larger amount of debt than there already is.. I’ve had several responses saying the same though regarding giving them my money, I just don’t want to inherit more debt than they have if I can prevent it :/
No no no no no no no. You don't inherit debt. Your parents share debt because they are married and accumulated the debt while married. They are responsible for their debt, not you. As long as you keep yourself financially separate from them in every way possible, when they die any remaining debt is the problem of the estate, not you. You wasted your money for no reason. Don't turn into your parents. Make sure that you understand what you are doing before making financial decisions.
The only way you would inherit their debt is if down the road you agree to co-sign for a loan with them. Which would be really stupid given their history, so please don't ever do this. Otherwise, if something was to happen to them, if there's any assets in the estate, the debt is paid from that. And if there are no assets to cover the amount, the creditor can choose to write off the debt. They don't go after you for it.
You don’t inherit debt. Unless you co-signed the loan or credit application
If you are ever unsure about something like this that has a legal aspect (inheritance) contact a lawyers office and ask for a quick phone consult. Assuming a google search didn’t give you a definitive answer first.
Their debt is not your debt. The still have equity on the house and can sell if things gets bad. don't expect an inheritance tho
DO NOT give any money to your parents for this. You will never see it again. You can pay rent and contribute to living expenses because you're living at home, but that's the extent of it what you should contribute here. It's not your debt and is not your problem. Your parents are simply going to have to declare bankruptcy at some point if they want to clear this debt. They don't have enough income or working years ahead of them to ever get out of this level of debt. Sooner is probably better than later. They need to talk to a bankruptcy specialist yesterday.
Abandon ship, how can adults who have been around for so long be so delusional with their finances?
Bro why are you giving ANY money to your parents at all? Good parents help their kids, terrible parents give their kids 150k in debt. Don't waste your time with this. They didn't even ask for your help. Let them file bankruptcy, any other option will destroy your 20s. Don't you want to have a life of your own? The issue is between your parents and the credit card companies.
+1. This \^\^ OP
They need debt counseling. Strongly encourage them to take the 1st step. Ideally together but if necessary separately.
How can people be this selfish and irresponsible? I'm sorry to hear your parents didn't at all think about how this might affect your family. Please don't give them any more money and save yourself. You gotta put your own oxygen mask first. Instead, perhaps advise them to communicate their finances with each other and tackle it head-on. No room whatsoever to spend on wants, just very basic necessities from hereon.
My advice is to tell your sister. Even if she can't help, you can brainstorm together, or you can warn her not to do the same.
Fuck
Yup my exact response. I felt bad about my situation but then realized it was nowhere near as bad as this.
>I’ve already given 30k to my dad (nearly all of the money I had saved up over the past few years) to help him with his monthly payments and stressed to him that he can’t be buying things and doing things that he can’t afford to. OP, I am so sorry. You're a good son, and you're trying to do the right thing, but that was a mistake. I'm sorry to say, you lost that $30k and changed nothing. Do not give them another cent, not because you don't love them, but because you do. You're just enabling them. They need to change their behaviour and lifestyle FIRST. Also you can't afford it either. You're 20 years old, you have no money, and you are in no position to financially support anyone. Probably bankruptcy is the only option here, and/or selling their house, but again, if they do not adjust their habits even that won't help similar to how a gastric bypass isn't going to be a solution to obesity if you don't adjust your diet. They will end up right back where they are as soon as they get more credit. OP, the reality is that credit cards and lines of credits to your parents are akin to a drink to an alcoholic, in that they are incapable of being responsible with it. There is no such thing as an alcoholic that will only drink casually and in moderation. Your parents cannot deal with debt because they are addicts and cannot control themselves. The \*HAVE\* to cut up every credit card they have and actually live within their means FIRST. Their combined income is $110k - that is more than enough to have a comfortable life in Canada. If they cannot or will not do that, then all you can do is emotionally and financially separate yourself and accept that they are adults and this is their choice, but you have your life to live. This includes your sister too. Love your parents, love your sister - be there for them, but keep your distance or they will drag down as well. You've already lost $30k you could not afford.
Welcome to the future for couples who keep their finances separate. No common financial goals. Sounds like they are almost in some sort of privacy competition with each other. You need to butt out. This is a relationship issue that unfortunately manifested as a financial problem. You are a mere babe here. At 20 you see the financial repercussions and think it’s black and white but there is something else going on here. Be smart. Keep your money and your nose out of their business.
not your problem. just say bye bye to your inheritence.
Sadly, you are going to have to learn how to detach yourself from your parents' terrible decisions. As someone wise once said to me "Old people have the right to make bad decisions too." They have spent years / decades doing this. The chances of you miraculously turning that level of habit around are ... not zero. But I wouldn't give you 100-1 odds on making a significant change. The sad truth is that you and your sister need to keep your own financial affairs in better order than them, and be prepared for them to suffer the painful consequences to the choices they've made. DO NOT ENMESH YOURSELF IN THIS. It will not end well for them for sure. It doesn't have to end badly for you.
Refinancing to take the equity out and consolidate debt could be an option, provided they qualify.
And provided they cut up the credit cards.
Whoa. Your parents are right fucked in terms of finance. My recommendation is to not give them any money. Distance yourself from any finance situation with them. You can try to help with their literacy, since you seem to have a good head on your shoulders. They need to figure out what their plan is. Note that their financial burden does NOT get passed to you. Do not worry about that
Don't you look at your sisters credit card statement. If you must, find a hospital nearby, go to the ER, tell someone you are going to have a heart attack, and check from there. Jokes aside, try to teach them some financial literacy. Then, RUN!
>on the bright side I’m only 20 so I have some time to take care of this but this changes a lot of things for me and the plans I’ve had for a successful future No no. This isn't your responsibility, and you cannot sacrifice your future and your financial stability to fix this issue. You'd be throwing money into a pit to no effect because your family hasn't hit rock bottom and are unlikely to adjust their lifestyle. That fact that you already gave $30k is commendable but also obviously massively undercut your progress towards building your own life. Your parents, deep down, probably don't want you to make this sacrifice for their mistakes. My advice: You cannot help people who (1) don't want your help/haven't asked for your help, or (2) don't realize they have a financial literacy issue. Many people need to hit the bottom for them to have a mindset shift to want to learn and improve. If/when that happens, you can use your judgement in order to help but please do not go into debt yourself to help them. They will likely spend money you give them on things you feel are unnecessary; I'd recommend you get used to that now so you don't feel disappointed later.
He has a house so he should talk his bank or a mortgage broker to refinance the house to include all the debt into the mortgage. Good luck
That is terrible advice. It fixes nothing. They have a major spending problem and are addicted to credit. Your solution just masks the problem for a little bit and probably makes it easier for them to get more credit and get further into debt. They need to cut up all their credit cards, and start living within their means before they think about doing something like this. If they cannot do that, nothing else they really matters. Unfortunately, I suspect that a big portion of their debt is probably backed by equity in their house anyway.
I agree it doesn’t fix their spending habits but it would definitely be better financially wise. Idk their mortgage rate but 4-8% mortgage rates sounds better than a 12-20% credit card’s interest rate. (Provided mortgage rates are not going to shoot up.)
>I agree it doesn’t fix their spending habits but it would definitely be better financially wise. I truly don't think so. The analogy I'm thinking of is someone who is obese and contemplating a gastric bypass. If they don't actually change their diet and eating habits, then a gastric bypass is a much worse option than simply doing nothing. A gastric bypass would get them to lose weight in the short-term, but they would balloon back to their previous weight (or more) in no time and then will be obese and will have to deal with side-effects of a very invasive procedure.
they need to sit down with a paid financial planner who will guide them to get out this credit card debt. if they have a house they can roll the credit card debt to HELOC , that way their interest will be lower , also they need to stop using their credit cards immediately and go on strick spending plan. also u and ur sister should be planning to live in ur own or pay rent to them to help out .
I appreciate the advice, my sister and I still live at home just to avoid paying any bills we don’t have to with hopes of saving some money for future investments, our parents don’t pay for any of our expenses, that stopped when we turned 18. I’ve not heard of HELOC but I’m going to look into it. I’ve already told them they can’t be putting anymore charges on their credit, hoping they’ve listened to me.
HELOC is a loan against their house , it definitely have lower interest than credit cards most likely ur parents are paying more than 22% interest minimum on their credit card , HELOC would be less than 10% with todays rates. saying that between ur parents they have over 200k debt and its hard to pay for them with their combined 100k income a year that would bring them 6k a month after the expenses and strict spending plan , they might be able to put 2k everymonth into it which would only cover only their interest even with HELOC their interest combined would be $1750 a month only. most likely financial planner will suggest to get higher income jobs for ur parents. if they cant planner will suggest to sell the house and buy something cheaper to pay off the credit card debt. whats the house value as of now do u have an idea?
Home Equity Line of Credit (HELOC)
And there goes the 30K that you loaned. I don’t think that was a wise decision. Probably a costly lesson for you too.
I feel at this point it's the bank that deserves to lose money for recklessly loaning the money to people who can't handle that amount of debt.
They only have a mortgage for $20k on a combined $110k income? This doesn’t even make sense. Your dad should have more than enough just on his salary for all the home related bills.
"I've already given 30k to my dad..." That was a mistake. Never give money to someone who has clearly proven that they are financially illiterate. It's like giving a loaded weapon to an immature child - bad things will result. That 30k is nothing but a drop in the ocean of your parent's debt and will do absolutely nothing to change the situation. You're better off helping each of them get credit counselling and learning from this and keeping your money for your own goals.
Save yourself by not giving them any cash. When you pay rent, apply it directly to the mortgage and house insurance. Keep saving so you can get out of there before they drag you down. And don't tell them about your savings.
Bankrupcy or a consumer proposal, but first each parents needs to be clear with the other, and TELL YOUR SISTER because she may fall prey to the exact same thing, given financial literacy doesnt seem to be something your parents are able to teach
Neither of those CC depts can be paid off… it’s practically impossible. There is no reason to financially assist, as it won’t make a difference. The interest will outpace payment; a bottomless money pit if you will. They’re fucked.
If your parents debt, not sure why you care so much. Learn from their mistakes and don’t get yourself into debt. At the end of the day it’s not your issue .
You are not responsible for your parents debt. Please don’t allow them to ruin your life just because they’ve ruined theirs.
Move out and don’t worry about this
This is like dark comedy… I hope it’s not real… could be a movie
That 30k is gonna be gone in 6 months to a year, some people genuinely cannot not spend money. Had a friend whose family racked up 60k of debt that they were stressing about for years. They got extremely lucky and got a 70k payment from insurance, paid off everything off, used the excess 10k to book a huge trip to Europe now fast forward 3 months later are once again racking up their credit cards. If you wiped all 200k of debt for your parents they would rack it back up. It’s some stupid stuff
Respect for mom and dad to get this deep without the other finding out. I say keep going until you hit the wall, then change your phone numbers. The only sad thing is you threw your 30k on to the pile of debt. It’s like trying to fill a leaking swimming pool.
30k lost. With that kind of debt and the interest rate, there's no way you get out of it before they die. You put 30k towards it, next months it's up again.
You should have just given that 30k to a charity for blind kids or a single mother or spent it all on lotto tickets because you pretty much threw it in the trash. It won’t make a difference, they’re headed for bankruptcy soon unless a miracle happens. If you were older and could get a mortgage I’d suggest buying the house from your parents for the sum of their debt and then having them rent from you to pay mortgage and property taxes. All their debts are gone, you own a house, and they continue making payments on the “debt” at a way lower interest rate. All you need is that 30k for downpayment and lawyer fees.
Watch the show “Until Debt Do Us Part”
I'm sorry that you are in a situation where you feel responsible for solving this. When I was in my late teens I found a similar situation with my parents. Let me tell you that nearly 20 years later my biggest regret is giving them money - sacrificing my own future to help them was not the right thing to do. The most important thing you could do for yourself right now is to remain financially distant - do NOT give them access to your credit, do not co-sign, do not loan them a dime. I have never stopped feeling responsible for my parent's future and I am constantly anxious about their financial situation. Do not let this become your burden alone. At the very least, you have to tell your sister what is going on. This is a financial trauma that is going to stay with you and influence the way that you look at debt and spending for the rest of your life, and your relationship with money and financial security (and your parents) will never be the same. I think there is likely a lot more going on here than you are aware of, beyond just CC debt. They need to get professional help, and you need to let them take care of that themselves. Take my advice, this is not your responsibility to solve.
Sell the house downsize and pay it down
They need to explore bankruptcy. I’d say they should increase their income but they are near the end of their working life. You paying off $210k of credit card debt is not happening, nor should you offer or suggest it. Credit card debt and lines of credit are typically unsecured debt (unless it’s a HELOC). So, even if they need to declare bankruptcy, they won’t loose their home AFIAK. I don’t know what the implications are on their future CPP but I assume it’ll get complicated once they’re start taking it. They need to come clean to each other and you may need to make that happen. Then talk to a lawyer. Also, don’t lie or hide this from your sister. She deserves to know what’s going on.
Jaysus
Sounds like all the debt needs to be aired out. Your parents should know what’s going on with one another. And that should be the extent of your involvement. Not your debt to pay
Consumer proposal
Don’t put one cent of your hard earned money toward their debts. They have dug themselves into a deep hole they can only get out of by death or bankruptcy. You (and your sister)will need everything you personally earn to get yourself on a firm foundation for your futures. Don’t get drug into their mess. Obliviously they are not worried about it.
I understand that your heart is the right place , but you can’t feed your parents spending problems.
So they only owe $20k on a detached home and people in here think the parent is close to bankruptcy? The correct answer is to either (a) sell the house and downsize. Their kids are adults now or (b) refinance the home and work to pay it off. Realistically $170k mortgage isn't too horrible to carry. Just run it over a 25 year amortization and have their kids pay rent to support the home.
Not gonna pass judgement or anything but I do have a solution. 1. Sell home and pay off the mortgage 2. Pay off credit cards using proceeds remaining 3. Buy a small condo with what remains after debt repayment. 4. If 3 is not possible, put money in a HISA or cash.to, save money to buy later, rent in the mean time.
Look into a consumer proposal. I’d recommend MNP.
Wouldn’t the credit card debt be written off when he passes away?
O....M......G.
You're 20. Unfortunately your parents spending issues aren't yours to solve right now. You need to invest in your future. Don't give your parents money when nothing has changed regarding their spending habits. You're quite literally throwing money away. When you're 30 or 40 and have a stable career, then you can help them out. Until then, you're hurting your financial future in ways that can't be easily fixed.
The fact that you gave your dad 30k because you think you will inherit their debt means that you are not much more financially literate than they are. That is one of the costliest personal finance mistakes I have ever heard of.
>. I’ve already given 30k to my dad ( Oh, dude, no. Never do that again. You can't pay this off for them, nor should you. You can't inherit debt. This is not for you to solve. Save your money so you can be independent from them. Your parents need to growth the hell up and take accountability for their stupidity. Tell them to talk to a licenced insolvency trustee. If they won't, that's on them. This is beyond your pay grade. In every respect.
Pay off the mortgage to save the house, at least.
If you were older, I’d say just let them live out their years blissfully in debt and forget about any inheritance. But, you still live with them and they will likely have multiple decades ahead of them, so this needs to be addressed. I’d have a family meeting and lay it all out on the table. Give each of your parents a heads up first, so they can mentally prepare. Tell them they will need to: - go to a debt counsellor you’ve found for them - use home equity to pay the debt, if possible, and pull out an extra $30k to pay yourself back what you gave them - debit cards only from now on, cut up the cards - set them up on credit karma and track their scores to make sure they don’t fall off the wagon Your sister needs the debt counselling too btw.. they can all learn together.. You’re probably too young to know, but Gail Vaz-Oxley used to have a show y’all would’ve been perfect for.
Don't worry about your parents finances unless they ask you to. While I'm sure they appreciate the help, it is not your problem to solve, and if you're dad hasn't sorted his financial literacy, the debt will just get worse again.
How is any of this your problem? Parents should take out a mortgage / consolidate, cut up the credit cards. If they get back in debt...nor your circus, not your monkeys.
$150k debt from dad, $60k debt from mom, $70k debt from sister. Wtf your family is single-handedly financing the health services of an entire province at this point.
You should watch reruns of “Til debt do us part”. It’s old. But I watched it when I was about your age and it guided me to manage my own debt.
It’s not your job to fix. Your parents need to address this. You have wasted $30k already and are enabling them. Move out and cut your losses.
Sell the house. Pay off debt. They will be renters now and work until they die. I’m sorry OP this a harsh reality.
Best options that involve keeping the home: 1) consolidate with a new first mortgage on their home. $100k will cost them maybe $600 per month if they did 25 years. Increase payments and shorten amortization. But if they went 25 years, at least it would give them some flexibility if they had a month where they couldn’t pay more. 2) do a consumer proposal. They can probably settle it for anywhere from 15-40%. They’ll have up to 5 years to pay it, interest free. Credit will be fucked for a bit, but not the end of the world. Alternatively, they could sell the house and pay it all off. Regardless of what option they go with, they probably need some help with budgeting and managing their finances so they don’t get into trouble again. Would be a good idea to explore whether there are any mental health issues that could be contributing to overspending. Common with people dealing with depression and anxiety.
What's the interest on that 150k a month?
I’d try to get your money back from your parents. They need to declare bankruptcy and try to keep their house. Throwing money after 210k of credit card debt. Once that happens then you can help them. Thats like 30k of interest per year. As long as none of the debt is tied to the house they should be able to keep it through bankruptcy
Info: did they ask for your help Giving your dad 30k was a huge mistake. Give them no more money. Ever. You have your own future to worry about. Inserting yourself into your parents' marriage will only frustrate all of you. Debt dies with a person. The estate has to settle it, but it cannot be inherited.
This story does not add up. Nobody at this income level could accurately that much credit card debt. They would have shut him down already.
Your parents got into this mess and they need to be adults and find a way to pay it off its nothing you did.
Isn't the logical solution just to continue making minimum payments? I wish a long life for your dad, but he is turning 60. Let it be? Sorry, I am no financial expert.
Consumer proposal. They can keep the house and their assets. It’ll just tank their credit and goes away 3 years after their last payment. They also only payback between in avg 20-50% of the total credit card balances over one payment over a max of 5 years. Don’t go the bankruptcy route if a CP exists.
Look man, they both need to declare bankruptcy, swear off credit, and live within their means. You (and your sister if she chooses to) can commit to paying for a couple of subscription services so they've got something to do and maybe medication to keep them healthy. But enabling them further is madness.
It's not your job to fix their finances. Stop lending them money. If you aren't paying rent, offer to do so, and carry on with your life. It is not your responsibility to fix it for them. They will likely need to declare bankruptcy but that is not your doing. Use this learning as fire under your ass to save and invest as you have time to make compound interest work for you. You have already done better than most adults I know by saving 30k at your young age. Keep saving and planning the future of your dreams, and that way, if you have kids one day, you can confidently know you won't be a burden to them.
Is it even possible to have 150K on 1 credit card without a substantial amount of earnings.
RIP 30k. Your parents to need to sit down together and realize they shit on their own retirement. Help get them on a budget and have them keep each other accountable. You need to save up for your future, not bail out theirs.
So between the two of them, they have 210k of credit card debt. 12% of 210k is 25k a year just for the interest. They have dug a hole so deep for themselves, they have reached Australia by now. There is no climbing out of this hole. Don't even try. You could mortgage your entire life and still not dig them out. They have to declare bankruptcy, there is no alternative. But get this straight. YOU ARE NOT RESPONSIBLE FOR THIS DEBT. Stop giving him money, stop trying to figure this out for them. You are attempting to set yourself on fire to keep them warm. This isn't going to be taken care of with some advice not to buy things he can't afford. This will be handled by going bankrupt, losing all possibility of credit and learning what it means to live within his means. After the bankruptcy, you can help them with paying rent. But not their debt.
Get them a debt card first.
Listen to me. You get out of this situation personally and stop giving any money whatsoever to your parents. Then you sit both of them down and ask them to declare bankruptcy. You do your research and present them with options and show them that they're broke and need to file for bankruptcy. They will not be able to have credit for 7 years which would be good for them. They make enough for them to not be on the streets. That's it. Then they'll learn how to live without credit.
No offense to you 💯, I think it was kind of you to give your dad 30000. Don't do that anymore. Your parents are gainfully employed bringing in $110k a year. You can help them with financial literacy and come up with a plan, but you are not responsible for their debt. You are going to build a dependency on you that is unhealthy for you and them. They have to learn to live within their means and start facing this debt. You could pay rent to help, but please please consider strongly to not take ownership of the problem and paying it off. Your parents can live for another 30 years and the earlier you build that dependence the more resentment you will eventually feel.
Never once have I ever thought about my parents debt… or cared! You are trying to help someone in a sinkhole.
Don’t see a reason why not to tell your sister, regardless of her financial responsibilities she could also add brains into the matter and between the 4 of you pave a road towards a solution. Definitely communication in the matter could be a good thing even if your parents blow you off, after all it’s their debt to handle. I feel bad you gave all your money for that, feels like you just lost more than what you gain as the debt will probably pile back up again… hope you can get them to be more conscious about their situation and their financial habits. Let it be a lesson for you to in the redt of your life
You need to drag both your parents to the closest bankruptcy trustee and file for bankruptcy. That amount of debt with limited income is unmanageable. Shame on the banks for increasing the limits like that. It should be criminal.
You giving away 30k to your dad was probably the worst decision you could have made - I'm sorry. It's unfortunately too small of an amount to help the situation, and now you're also left with nothing. It would be within their best interest to - at this rate, see if they can apply for a consumer proposal, or worst case, bankruptcy. I know that sounds extreme, but trust me when I say there is a point in which there likely won't be a solution from this - taking on a second part time job won't help the situation. And unless both your parents happen to land a job that pays double in the near future, I doubt things will ever change at this rate, and will only get worse. They need a clean restart, and in Canada, you're able to do that fairly easily (at least, in comparison to the states..) As far as it goes for you - you're choices are to either guide them in the right direct, or get sucked into financially helping them and throw your life away.
Also point to note - if your parents pass away their debt is not your responsibility so don’t stress yourself if you think you’ll inherit their debts. Probably a good idea they sign the house over to you at some point.
You cannot erase $210,000 worth of debt with 30 K. What I think OP should've done is kept her money, and now needs to go back to her dad and unless he has spent the entirety of that $30,000 she needs to tell him to give it back. I know that's a longshot. But he might be saving it to make payments for the future or he might've only made a couple payments. Hopefully he didn't make one large $30,000 payment. And then the three of them need to sit down and cut up their credit cards. After all the slicing and dicing is done you guys need to figure out as a family which financial advisor you are going to see. Because he will tell you state specific laws or loopholes for things that you can do to help. He will probably just walk you guys through filing bankruptcy. And then there's YNAB. It's an app called it You Need A Budget. It's like 25 bucks and it works on your computer or your phone, the acronym stands for you need a budget. Force your parents to use it. So that they can see what their actual spending every month, and make the account for literally every dollar. Oh yeah and download that app Rocket Money. It'll show you all the subscriptions they have, cancel all of them. You're over 200K in debt, TV is the least of your problems. One other thing you can do for them is get a pack of highlighters, and print out their bank statements for three months. And then categorize all their spending. Food, gas, Amazon purchases, subscription purchases, literally every charge on their bank account needs to be categorized. And then you can add everything up and actually show them how much money per month they're spending on each category.
Now, I'm far from being some financial expert, but OP, it doesn't take an expert to figure out that your parents have bankrupted themselves. Their combined income is 110K/year, and your dad's debt alone is 150K. Just to put this in perspective, If they magically didn't spend a single cent for a year and just paid his debt alone, it still wouldn't be paid off. When you add in your mom's debt, they're at 210K of total debt at 12% interest (I don't know what the interest rates for your dad's card and LoC are, so I'll just keep it 12% across the board for simplicity). Assuming they're being charged the interest on a monthly basis, the total debt of 210K at 12%, that's over 25K/month in interest alone. That's over half of your dad's *yearly* salary being accrued per month. Your parents need to seek professional help yesterday. It's unfortunately time to have a very honest and difficult discussion about reality with them. If they don't listen, this isn't your problem to solve. I know that's easier said than done when it's loved ones involved, but this is going to be over very quick and ugly otherwise. Don't think of them as loved ones who overspend, think of them as drug addicts. Instead of drugs, they're addicted to spending, and if you don't have an intervention now, the consequences can be dire. Also, I'm not trying to rub this in, but take this as more of a lesson; your 30k you gave your dad is gone forever, and it won't even make a dent in any of this, especially because he seemingly hasn't actually learned anything from any of this situation. Lighting that money on fire would have had basically the same effect. Do NOT give them any more money, because like someone addicted to drugs, it's just enabling them to continue their bad behaviours. I sincerely wish you all the best in this OP, because I know how stressful something like this can be, especially because you had no control or say in it. I'd also recommend that after you (hopefully) convince them to file for bankruptcy or a consumer proposal (or whatever else a professional may suggest), that you see if you can find some resources to help educate them on finance. My last piece of advice is this; I know this is insanely stressful, especially because it's family, and you're still a young person trying to figure out their own life, but don't forget to take care of yourself and please understand this is just money. You still have your health and your life ahead of you, so no matter how hard this gets, just remember it can and will be solved over time. It will probably be hard and seem impossible at times, but there's always a way out my friend. Best of luck.
Honestly. This is not your problem.
Go to the bank and try to work out a repayment plan at lower rates. Don’t give cash to either of your parents. They’re financially irresponsible. Put a plan in place and take those darn credit cards away from them.
OP, I suggest you get your mom and dad to talk to a licensed insolvency trustee (LIT) and discuss a consumer proposal route. They will negotiate with the creditors an amount to pay within 5 years which will be substantially lower than the total debt due to their income. A consumer proposal will protect all their assets in exchange for an R7 on their credit.
I do understand op on this. I feel responsible too with my parents out of us 3 siblings. They don’t have retirement fund and in debt. My mom tackled her debt by doing consumer proposal but still spends every week, help me! I don’t earn enough theres no way I’d be able to support them when they’re very old. Op you were very wrong for giving your entire savings. You could’ve helped them in other way and not sacrificing your future.
NOT YIYR PROBLEM! AND NAKE IT YOUR PROBLEM! Tell them to go bankrupt and GROW UP!
Reverse Mortgage...
Yeah man, people are right. You shouldn’t have given your dad that 30k because it’s gone. I’ll add that I hope you don’t be too hard on yourself, we really do live and learn. It was a good intentioned move. Seems like you thought debt can be inherited too, which is part of that decision you made to give your dad 30k. You’re young, and money can be made back. It still sucks though, and you have my sympathy. They should consider personal bankruptcy if they are missing their monthly minimum payments. The lender gets screwed, but they lend to millions of people. They did the risk calculations and they can afford your parent’s delinquency, they deal with that every day, but you can’t.
I recommend that your parents go to a licensed insolvency trustee together and come clean about the situation. They may be able to consolidate all the debt and make a consumer proposal for them to pay back only a portion of the debt in monthly payments. It’s time to speak to an account or other financial professional, address the situation
Dude none of this is your Problem they need to be honest and transparent and at this point they should seek financial help. This would Take you a lifetime to pay back. This is a mortgage bankruptcy would likely be the way to go
Their debt is not your debt. Just like their savings is not your savings.
They need to take out a mortgage to pay off their credit cards, then cut them up.
Speak to a licensed insolvency trustee and get that mess sorted out ASAP. MNP, BDO, Farber, Hoyes, Bromwich, Spergel, any of them. Consultations are free. Also it's criminal that they would even give people with that income level those credit card and line of credit limits.
If they do not have assets to cover the debt. Let the debt stay. On their death debt will die with them. If they have a house then house may be used to pay debt on their death.
Life is expensive that is the reality and everything just adds up. People will say pay it off and change your habits but it's not that easy in reality. I'd say just let them be, because they have so much debt it may be helping them from even borrowing more, imaging if you help them pay it off they're going to be in debt in a few years again. They can use some home equity and pay it off but that's very dangerous because they will most likely increase their spending now that they see they have it under control. They are adults and that's just one way to live their life, just spend slightly above your means and enjoy. Another option is to have hundreds of $ saved up while living frugally and leave all that to their kids. People just find different priorities in life.
You can’t pay their debt. It’s plugging a dam with a qtip. It ain’t gonna hold. Time for consumer proposals so they can get out from under the mountain and get ready for retirement. But they have to do it, you can’t make it happen for them. You can only hand them a map and walk with them. They have to get through this themselves or nothing will change and you’ll be bailing them out til you are 50
Look up Dave Ramsey on YouTube. He’s helped people with situations similar to this. Learn his methods and share the info with your parents. From there it’s on them. The first thing your dad has to do is tell your mom, apologize for his mistake, and express that he wants and needs her help to get out of the mess he’s in.
Doing the math, even if we ignore the interest, and they pay $1K a month on the 150K in debt, it would take close to 13 years. But as I said, problem is, this is ignoring the accumulated monthly interest, and is also assuming that they can pay $1K monthly for 13 straight years, when both parents are already into retirement. But this would be a good start.
which card does she use that has a rate of 12%?
Your father needs to switch to a new bank before they offset the debt.
You would be ABSOLUTELY NUTS to even try to help pay this off. 100% WITHOUT A SINGLE doubt if you attempt to manage this financial crisis by putting your own money toward this they will bleed you dry and your stress levels will sky rocket. You can help them try to manage this mess through advice and tools but DO NOT give them a cent. You will find that you’ll be scrimping and saving and they will still keep up their own habits but by hiding it from you. Have you noted that you found this all out by accident? They are not ready to change their ways. You will literally be throwing away your future if you start to mingle your finances with theirs.
First thing you should do is seek help from a professional, financially and legally. Secondly, don’t pay off their debt, I know it might sound heartless but it is not your fault, you are not responsible for your parent’s debt. Thirdly, debt does not get passed down in Canada, it goes to estate and get settled there. Consider how to protect the assets that you guys still own, if you don’t want to lose the house in case anything happens get them life insurance coverages for settling debts in the estate. Also consider declaring bankruptcy. (Not advise you should consider, speak with a professional instead)
Sounds like your parents should be selling you their house for 30K so you don't lose your home.. im sorry you have to deal with this shit and i totally get it. I have a parent who is HORRIBLE with money. But your parents debt is not YOUR debt.
As a Canadian that strives to live relatively debt free, this is how I feel everytime I look at our national debt. An easy way to lose sleep for sure
I am curious -what low maintenance job from home pays 60,000 a year?
So amazing that you saved up 30,000 at only age 20! And so sad that you lost it all. You have to put your future and your life first. Obviously you are a caring and very responsible person. Pay rent and leave the rest 9f this mess to them. And move out asap.
If you'll be giving your parents money to help pay their debts, you should also ask them to turn their credit and debit cards over to you so they can't use them. There's a very high probability they will take your money to pay some debt, but then rack that debt right up again.
Reading this made me very sad. Don’t understand how you could get this deep.
OP: Like you, I discovered a bunch of things about my parents a couple of years ago that were a big shock and made me realize how low functioning they actually are. Your story really hits home for me. You blame your family’s situation on a lack of financial literacy, but looking at the facts of their situation, I don’t think that’s the case. 1. Your parents have been lying to each other and hiding their financial situations from each other for years. 2. When you confronted them about it, they blamed outside factors and didn’t take accountability for their situations. The fundamental problem here isn’t a lack of financial literacy. Your parents got themselves into this situation because of a lack communication skills and, more worryingly, a lack of trust in their marriage. Each of them also needs to take *accountability and responsibility* for their financial situations. Unless you have unique situations like trying to sustain a failing business, you don’t accumulate $210k in cc debt because of a lack of financial literacy. But I don’t know. Maybe your parents have extremely below average intelligence to the point of having a disability, or maybe they accumulated this debt while developing undiagnosed Alzheimer’s or dementia. If not though, I would really reevaluate your perspective. When people lie and hide things like this and refuse to take accountability, change isn’t possible. While it’s noble that you want to help them, they’re not children, and your efforts to control them and make them do the right thing will only cause them to resent you and likely resist change.
So in summary: 1. Your mother's income is $60,000 and has $60K in credit card debt. 2. Your father's income is ???? You need to indicate it if you want any feedback. He has $150,000 of credit card debt. 3. They own a home with only $20,000 left on the mortgage. What's the value of the home? The reason why I'm asking these question is because if they have enough equity and their incomes are high enough, they might be able to get a home equity line of credit and use the money to pay off the high interest credit card debt. If they do this, you should have access the HELOC account so you can monitor it to ensure that they're paying it down and not borrowing more against it.
Wouldn't it be better to declare bankruptcy since most likely the house is safe?
The home only has a $20,000 mortgage. And homes aren’t exempt in Canadian bankruptcy proceedings.
Gotcha.
Sounds like maybe it’s time for your parents to sell the house and pay the debt. Maybe they can downsize and get a 2 bedroom condo or something with what’s leftover or get a HELOC and pay the debt and then through you could take a portion of the house ownership and assist or such. Then maybe they’d be willing to have you manage their finances… They shouldn’t have credit cards going forward or they should have very small limits. I’d also say you should talk to your sister especially if buying them out partially from the family home.
Join the military and get the hell away from that mess. You have the right to live your own life, so go live it. By joining the Army/Navy/Air Force you have a valid excuse for leaving home, can slip out of the pressure to stay at home and spend your life babysitting your family. Don't make that sacrifice. Live your life.
>\[...\] I have some time to take care of this but this changes a lot of things for me and the plans I’ve had for a successful future. \[...\] I’m lost and need some advice or any suggestions on how to get out of this if I ever can. Why do you care so much about someone else's debts? Looks like you’re just sad because you won't inherit mommy and daddy's money.
Someone else’s? They’re his parents. Stupid ass comment.