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Bankruptcy & Foreclosure
Hi Ladies,
I am hoping you can provide me with a dose of reality and/or advice. My parents will likely be going through bankruptcy (for the second time) and will probably lose their home to foreclosure. Its pretty complicated - but essentially their business tanked and left them in financial ruin (no savings, in a huge amount of debt, etc).
Have any of you gone through this with your parents as an adult? I am struggling with how to cope with my feelings on this - I am extremely worried for them (that they'll lose their home, not be able to find jobs, how my siblings who still live at home will be affected etc). But at the same time, I know I cannot fix this problem for them and that its not healthy for me to stress about something not in my control. Growing up my family struggled financially, and this definitely has affected me as an adult. I have sought counseling in the past surrounding these issues.
I have a feeling that at some point, my parents may ask to "borrow" money (they will not be able to file for unemployment due to the setup of their business). In the past, I have been able to say no to similar requests from my siblings...but I couldn't imagine saying no to my parents this time if it meant they would end up on the street due to my decision. I am aware that if I loan them money, I will not receive it back - which I am OK with. I guess I am just tired of feeling like an ATM to my family.
So I guess I am looking for any advice or suggestions - or even some flames to give me a dose or reality.
Re: Bankruptcy & Foreclosure
They will not end up on the streets due to YOUR decision, but rather because they've made poor financial choices in their lives, which you've had absolutely no control over. I'm all for helping people when they need it, but if your family hasn't learned their lesson when they went through this before, helping them out will only enable them and teach them that you'll be there to pick up the pieces of their mistakes. Their actions have consequences and if you help them, they will not see the consequences of their poor decisions.
YOU are not the parent in this situation. Keep saying no, you are in no way responsible to financially support these grown adults in your family.
I totally hear you. My ILs are close to declaring bankruptcy as well to the point where DH has to give them cash in repayment for a school loan they took out for him years ago. Apparently they're so overdrawn that if they took a check to the bank, they wouldn't actually get the money. It frustrates me because they haven't scaled back ANYTHING and have made zero scarifies to try to remedy the situation.
The thing that you have to remind yourself of over and over and over is that you didn't make their bad decisions and you are not responsible for the outcomes of those bad decisions. You are not responsible for supporting them. If you do bankroll them, it will never stop and really, what are they learning? that they can rely on YOU to keep them afloat. If it were me, and it could very well be me here shortly, the answer is "no". Tough love - absolutely but again, they need to live with the results of their own decisions. You are not responsible for them.
I don't know if I'd be able to say no to my family. Yeah, we'd like to think we could, sure (in this me-me-me society of ours, for good and for bad), but for me, my family has given me so much over my lifetime, I feel that for me to say no would be the ultimate in selfish. Even wealthy, well-off families go through hard times occasionally and with the current market and unemployment numbers, it's hard to just say, "No. You fed me and clothed me and paid for my education and everything else, and now I'm going to throw you into the streets." I couldn't do it.
If you want to help them but are scared of the results (and you haven't said if you are/do or not), then make it on your terms. If you're able, give them the money as a gift, not a loan, and limit the amount. Also, if you're able, give them help that doesn't qualify as financial - help them find work, look for an apartment that they can rent, etc. The help doesn't have to be in cash form to be valuable - sometimes, the most helpful help comes in nearly-free ways.
My in-laws are currently in financial crisis, and DH and I are working with them on that. Here are some suggestions...
1) Whatever you decide to do, be on the same page with your DH. My DH and I don't have 'his' money and 'her' money...our money is our money. We don't go loaning it or giving it away without being in agreement on it. Be proactive, and talk to your husband now about what you are and are not willing to do. Will you give them money? Up to how much? Will you open your home to them? For how long?
2) If you do decide that you are going to help your parents out financially, insist upon absolute, 100% crystal clear financial transparency. You need to know in full detail their financial situation, including credit card balances, amount in collections, any liens on the house, etc. If they are not willing to do this, they don't get your help. End of story.
3) Be proactive. Talk to your parents, and involve any siblings you may have. Don't wait until the sh!t hits the fan. It may very well be a hard conversation, but if it means that a solution is found so that they won't be out of a home, then it has to happen.
4) Start looking into public aid programs that may be able to help them... if not now, then in the worst case scenario.
5) Continue counseling. Remember that not being able to help them does NOT mean that you are a bad daughter. They are adults who have made their own decisions, and this is their mess. If you can help, that's wonderful. If you can't, that's not a mark against you.
My family is in a great amount of debt right now, has been for awhile, and I gave them all I could. When I got married, we (hubby and I) gave them all we could. It helped at the moment they needed it, but now that we realize we were just enabling them, we regret ever giving them any money, especially since we're in a tight spot now financially too. And it is extremely hard for them to understand "No" now, since we gave so much previously.
I had the same feelings about my family being on the street if I ever said no, but it seems like they never got any good kick in the pants to start getting out of their situation since they knew they could get money from us. Like some others have said, it's a horrible place to be in, but it was not you making their decisions to put them in the place they are in now.
I still feel pretty guilty when I don't give them money for car payments or rent, but I do feel less used, which is a great relief. Perhaps, if you can spare a few dollars here and there for the really important things, like medications, maybe you would feel a little less worried?
Either way, good luck and hang in there.
This is the best post on this thread. I am actually rather saddened by the people who say "they got themselves into it and they are the parents"
Since when has this society completely turned its back on taking care of your parents!! You are an adult now, so you should be willing to take care of parents the way they take care of you. Now it doesnt mean do it blindly. It doesn't mean just ask them what they want and write a check - it means do what the above poster (karen) said.
My husband helped pull his parents out of financial ruin. His dad had a business that was doing well and instead of saving he spent it on opulence and induldgence. It was a HUGE mistake on his part, but parents make mistakes.
My husband (before marrying me but we were engaged) lived in his truck and worked his butt off and most of the money he made went to his parents. He basically lend his dad his name and clean credit record and his dad made some more mistakes and ended up getting a car reposessed under my husband's name and it was another mistake..
When we bought a house I resented my FIL for what he did to my husband's credit and how he took his money and owes him a lot.. but I quickly realized that it is what it is and I would have done the same for my parents.
Family is most of the times one of the only things we have.
His father has promised to be more careful with money and we regularly talk about HIS money and he used to get mad at me for telling him that such and such purchase was not needed, but I just kept at it in a LOVING way.. My FIL and I used to butt heads and now we love each other and RESPECT each other.
SO here is my suggestion - talk about it and help anyway you can. Be sure to talk about it wth your hubby before hand and make sure he knows that its important for you to help
Thanks for your replies everyone - it is nice to hear advice from different angles.
DH and I have already talked about the possibility of gifting them some money. While I don't agree with some of the choices my parents have made, I still love them & care about their well-being. I think that should the time ever come we'd be willing to help them out within reason.
Its just such a terrible & uncomfortable situation to have to even consider. You want your parents to be thinking about retirement - not worrying if they'll be able to find a job to put food on the table.
Thanks again for taking the time to respond.
His father has promised to be more careful with money and we regularly talk about HIS money and he used to get mad at me for telling him that such and such purchase was not needed, but I just kept at it in a LOVING way.. My FIL and I used to butt heads and now we love each other and RESPECT each other.
I love my ILs but I absolutely do not respect their financial decisions in the least because it is fully the result of their laziness and lack of planning. If they were disabled or were laid off and needed money to get by for a few weeks, that is different. However, if you're facing down bankruptcy, you shouldn't be upgrading your cable or getting a new dog or taking a vacation. Sorry - that only shows that you're completely and utterly clueless to the financial mess you're in.
You can still love someone and decide that the best way for them to help themselves is to support them emotionally instead of financially. In my particular situation, and everyone's is different and chooses to handle things differently, I am not going to put my financial or credit stability in jeopardy for 2 grown adults who should know better. If they want help to find a credit counselor, I'd be happy to help them with that search. But I'm not paying for it.
Two things...
First, be careful how much money you gift to them. It could be taxable.
Second, you may want to work around that by actually applying the money to something yourself (such putting money directly onto their credit card, or buying a grocery story gift card). This could help with the tax issue, and more importantly, makes sure that the money you are giving them is going specifically towards what you want it to.... (and not being applied to an unneeded expense).
There comes a time when you need to let go. Maybe you're there now, maybe you aren't. You said you're tired of being an ATM to your family - so have you been giving them a lot of money all along?
The amount and kind of help you can give them depends on the situation. Yes, they need to realize the consequences of their actions. If you're in a position to help them, it's not a terrible idea to help - but you need to make sure some serious strings are attached and they need to be able to learn from everything rather than making it an enabling game. Would they be willing to change their financial habits, or would your money be allocated to a perpetual black hole? Would they be willing to give transparency on everything?
Always keep in mind that you and your H have yourselves to look after and your family (or potential future family if you plan to have kids but don't have them yet). Talk to your H and limit the amount you'd be willing to help, and certainly don't jeopardize your own situation to help your parents - that just adds to the number of people in a terrible financial situation!
DH and I are (very luckily) in a good financial situation ourselves - we would never jeopardize our situation to help my parents. I have considered the impact to us (and our future family); based on the amount I would feel comfortable giving, I think the impact would be fairly minimal.
I have not actually given money to my family in the past. My siblings have asked (which is why I felt like they were treating me like an ATM) - but I was not willing to provide it because their request was based upon poor money management on their part rather than true need.
Regarding transparancy of the situation, unfortunately am extremely aware of my parents' debts & liabilities. If we provide any support, it would cover the expenses of their health insurance or bankruptcy attorney fees. The result of the impending bankruptcy (for them) is a result of putting all their life savings into their business - and not necessarily living a lavish lifestyle.
Thanks again!
If they're doing everything they can to remedy the situation, scaling back in extreme ways, actively trying to get jobs, selling their belongings, making no unnecessary purchases, no eating out, etc., then try and remember all they have sacrificed for you and find it in your heart to help them as much as you can. Being a parent myself, I realize how my parents gave up lots of things for us kids. I'm sure yours did the same for you many many times and didn't ask for anything in return. To me, it's different for parents than any other family member. It's not your obligation to help them, as many have pointed out here, but ask yourself if your parents would be there for you financially had the situation been reversed.
On the flipside, if they aren't doing everything possible to help themselves, keep your money.
I think this quote really sad:
DH and I are (very luckily) in a good financial situation ourselves - we would never jeopardize our situation to help my parents.
Do you see what you are saying? You would never put yourself out to help your parents! I don't know about you, but I would jump in front of a moving bus to push my mom out of the way. If my mom was struggling financially (and we are hardly financially stable) I would do everything in my power to help them. My husband did the same.. he put his ENTIRE financial life on the line to help his father.. and guess what, they kinda made it harder for us to get a house.. but guess what, his father did the best he could to raise him his whole live and just made some bad decisions.
I don't know you exact situation, but the only time I feel like the whole "they're adults let them fend for themselves" thing is acceptable is if your parents made you fend for yourself as a kid..
So answer this:
Did you always have food?
Always have a safe place to sleep?
Always go to school in clean clothes?
Always have a Christmas?
My mom and dad gave up a LOT of their financial stability to give my brother, sister, and I a great life. They put xmas gifts of credit cards and spent the whole year working extra jobs to pay it off only to do it again next year.. I never EVER knew how poor we really were. I remember boiling water for baths because we didn't have any, but I thought it was just one of those things people did sometimes. I remember never going out to dinner, I remember my mom picking up every odd job she could do, I remember gifts under the tree every xmas.
I would literally sell my house and give my parents the profits and move back in with them if it meant keeping them on their feet.
This more and more is becoming very common and quickly becoming a sign of the times. I am sorry for your troubles.
It's the death of the middle class -- and the middle class is what keeps everything running! Not the rich, or the very moderately well off: THE MIDDLE CLASS.
The middle class is what buys the homes, shops in stores, practices consumerism, pays taxes and owns homes, poplulates our colleges, unis and other post secondary schools and keeps the tax base operable. Not the rich: the middle class.
Is there any way they can come live with you? I usually do not advise living with a relative but in this case, it's an exception.
So, you're OK with parents being able to spend irresponsibly, and the kids are going to have to bail them out, just to see them turn around and do it again?
Well, that's fine for you, enjoy your life as a doormat who won't ever have a decent credit rating. That will really come in handy when you try to buy a house.
Parents aren't accountable for their mistakes? And you're OK with barely making ends meet in order to help them make yet another poor financial decision?
No thanks. If my parents were in bad financial straights because of medical bills, or something that was out of their control, of course I would help them if I was able. But if it's just another instance of them making poor decisions, your family should not have to struggle because of that.
Parents do give up a lot for their kids, but at the same time if they keep making bad choices and their kids keep bailing them out, there's no point in continuing to enable them. You said you remember your mom doing every odd job she could do. Not all parents who end up in bad financial situations over and over try that hard. Everyone's situation is different. Nobody should help their parents unconditionally just because they're parents - that's crazy. Example - BIL bailed MIL out time and time again. He told her the last time he gave her $ that it was the last time and that she needed to get her sh!t together. Well, she kept shopping and shopping and now she's struggling to make her mortgage because she's blowing all of her money at department stores. Why should he put his own family's livelihood on the line because his mom continues to blow her money on clothes and stuff for her house rather than actually paying for her house?
Ditto this 100%. There are certain situations when people should really exercise some judgment before blindly throwing money at their parents. Certain situations are more appropriate than others.
I am not saying that I would not help my parents - I am saying that I am not going to put myself in financial distress to help my parents. DH and I have worked very hard to have minimal credit card debt and to pay off student & car loans. We make smart decisions with our money so it never becomes an issue in our relationship. I am more than willing to try and help my parents within our means, but frankly, I think ruining your own financial stability for the sake of another doesn't accomplish anything.
Exactly. I'd help my parents out if they got into a financial jam, but I sure as hell wouldn't be living in my car to do it, especially if their own repeatedly poor choices were the source of their problems. I'm their daughter, not their doormat. In this situation, I can understand why you would want to help your parents- it sounds like they made an investment that just didn't work out. If you choose to help them, I think setting a finite amount of assistance is a good idea. I also like the idea posted earlier about helping in a way that gives YOU control over how the money is spent- grocery store giftcards, paying some of their bills directly, etc. Decide (with your husband) what you can afford to do without putting yourselves in a bad situation and don't feel bad that you can't do more.