My mom has always been very hush hush about her finances. I've tried to give her advice over the years and she's always made excuses for not taking it. I'll give you an example, I worked for one tax season at Jackson Hewitt as a tax preparer. At the time my mom was 3 years behind on her taxes (basically someone told my mom about the three year grace period that the IRS gives you if they owe you money & since she is a huge procrastinator she waited until the last minute.) She's getting older and finally relinquishing some control & I've started to dig into her finances and I am truly at a loss for words on how much of a mess things are. I am completely overwhelmed and could use some advice. Also, I'm not even sure this is the right subreddit, but its where I'm trying to start getting some advice for fixing this mess.
To summarize:
- My parents bought the house she lives in back in 1986. They got divorced in 1991ish and at the time the agreement was that in lieu of child support my dad would continue to make payments on the mortgage until I was 18, at which point she would buy him out. They squared up in the early 2000s & my mom bought him out of his half of the property. He later told me that there was only 12k left on the original mortgage, but I think she probably had to take out a mortgage for the 12k plus his half of the 2000's value of the property.
- At some point she got involved with a large timeshare company that you've heard of. These evil ass people lied and manipulated her repeatedly over the years and had her take out multiple loans, home equity lines, drained her 401k, savings, everything. All she's got is her monthly retirement & SS payments to live on and is currently on the hook for like 120k to them.
- She got some other family members involved with the timeshare & they all realized too late it was a bad investment and a scam. They jointly hired a timeshare cancellation company & paid them 12k to get rid of the timeshare. The cancellation attorney(?) told my mom to stop making payments on it while they did whatever they're supposed to be doing, so my mom had to close her bank account & open a new one because the timeshare company was direct debiting her checking account. As it stands right now, her two mortgages totaling 120k through these people are 2 years delinquent. Its been two years since they engaged the cancellation company and she still hasn't paid them in full for their service, but claims she is making monthly payments to try and settle up. She claims they aren't able to act on her behalf until she finishes paying them off.
- My husband and I were trying to do her a favor and buying her house from her for the balance of what's left on the current mortgage which is around 90k. We were trying to prevent the timeshare from putting a lien on the property and basically taking it upon her death. After discovering how deep in a hole she is, we are wondering if consulting a bankruptcy attorney is the better route to take. I need some advice on this idea in particular.
- She also has multiple credit cards with balances ranging from $70 to $1600, plus a personal line of credit through the bank for 10k which is of course maxed out.
- I am working to get her taxes current. She claims the past two years she's owed the IRS money in the amounts of $1200 & $3000 which includes 3 years worth of penalties and interest.
Some advice on where to start would be helpful. Should consult a bankruptcy attorney? Financial advisor? Accountant? Like I don't even know where to start. I think her annual income is somewhere around 60k-70k, but I will know more once I dive into her taxes.
Thanks for reading.
original posted by FannyComingThru to r/personalfinance on Sun, 24 Mar 2024 15:50:11 GMT.