My dad passed away -- left my mom with extreme debt

[WazzuRC]

Hey guys, I have an unique situation.

Unfortunately, my father passed away last Thursday. He suffered a heart attack on Monday and the lack of oxygen to his brain while they tried to get his pulse back damaged his brain very badly. The family kept him on life support until Thursday, when the neurologist informed us that he only had about a 1% chance of ever waking, with the odds of waking with a meaningful life after far worse. Everyone in our family is devastated, especially my mom.

My dad did ALL the finances. My mom doesn't even know how to access her online bank account. He gave her the money to spend, they lived good lifestyles, everyone was happy, etc. He was the breadwinner. My mom has an okay paying job, basically enough to pay standard bills with a small amount left over -- nothing close to being able to pay any minimum payments for credit cards.

As I've looked through their accounts to help my mom spend and budget wisely, I've found some disturbing debt. My mom has ZERO clue and assumes they were close to debt free. They have a total of 100k in debt (ugh) -- approximately 20k in my student loans which they agreed to pay for along with 80k in various credit cards, debt consolidations and small personal loans (like Springleaf Financial).

I'm so shocked and angry at my dad now that I can't even grieve properly. This debt has been with them for years without my mom knowing. I've looked at statements from three years ago and the debt is still there, meaning it's been in my family more or less for many years.

I don't know how I can tell my mom. I want to wait until after the service on Saturday and tell her Sunday or Monday about it. I live two hours away so I don't want to tell her and then head home, but I don't want to impact the service at all on Saturday in anyway. I met with a probate lawyer without my mom's knowing yesterday and they think we should at this time try and get grace periods for these accounts until we can figure out a gameplan. My parents have no wills in their name. This doesn't even count any medical bills or funeral service bills we may accrue over these next couple months.

I'm just looking for any advice. When to tell her, how to tell her, ways we can get past this, etc. I don't want my 60+ year old mom in financial ruin because of dumb decisions they made years ago that my mom has no idea about it.

Any help is appreciated.

-Ryan

[fistofrage]

Re: My dad passed away -- left my mom with extreme debt

Did he have a life insurance policy? 401 k? Pension? You'll have to take all the info you have and have your mother speak with a financial advisor. Sorry for your loss.

[countryboy]

Re: My dad passed away -- left my mom with extreme debt

First and foremost Ryan, I am sorry for your loss. Thoughts and prayers for you and your family.

I would wait until after the services to tell her. But when I did tell her I would come right out and lay out all the information and let her know that you'll be in her corner and help her figure this all out.

In addition to what fistofrage said, I would contact each creditor and explain the situation and see if you can work out some type of terms.

[mgoblue]

Re: My dad passed away -- left my mom with extreme debt

Did he have a life insurance policy? 401 k? Pension? You'll have to take all the info you have and have your mother speak with a financial advisor. Sorry for your loss.

Yeah, we had to go through this with my FIL. He had tiny pension and life insurance that essentially covered the funeral and stuff. Sucks he didn't have more to help her stepmother and us (we have 30k+ of student loans that he was supposed to pay but dropped on my wife after she graduated).

Otherwise the planners will help see what they can do, but if it's in her name as well she might be hosed and eventually have to declare bankruptcy

Your family's in my prayers, I know how tough this must be, and money stuff on top of it really blows.

[WazzuRC]

Re: My dad passed away -- left my mom with extreme debt

He had 401k and (I hope to God) life insurance. My mom expects he does but she isn't 100% sure. We're supposed to be meeting with his employer today.

[dsallupinyaarea]

Re: My dad passed away -- left my mom with extreme debt

Sorry for your loss.


If he didn't have a private life policy, the company he worked for might have some coverage.

[SPTO]

Re: My dad passed away -- left my mom with extreme debt

My condolences go out to you and your family. This is just horrible. I don't really have much in the way of advice but I do think it's best that you leave this news til after the service.

Hopefully your father had a life insurance plan or things are going to be really really difficult. I will keep your family in my thoughts and prayers.

[Gotmadskillzson]

Re: My dad passed away -- left my mom with extreme debt

Sorry to hear that. Tell your mom BEFORE the funeral before she starts spending all kinds of money on the funeral that she thinks she have but really don't. Funerals aren't cheap. No need to let her put herself further into debt.

[WazzuRC]

Re: My dad passed away -- left my mom with extreme debt

Is something like this better to go with a probate attorney or a financial advisor?

I am taking care of the funeral temporarily, but we will use some of my mom's life insurance she had on dad. No worries on funeral service coverage.

That said, my dad took a very paltry amount of life insurance for himself so at least my mom is getting some money from her life insurance for him.

[kehlis]

Re: My dad passed away -- left my mom with extreme debt

Is something like this better to go with a probate attorney or a financial advisor?

I am taking care of the funeral temporarily, but we will use some of my mom's life insurance she had on dad. No worries on funeral service coverage.

That said, my dad took a very paltry amount of life insurance for himself so at least my mom is getting some money from her life insurance for him.

Sorry for your loss man.

Definitely get an attorney, a financial adviser can't do anything for you in this case. They manage assets, not debts.

An attorney will be able to draw up the paperwork that will allow him to work with debtors which is something that neither you or anyone but your mom would be able to do at this point.


As for the timing, definitely wait until after the ceremony and give her as much time as you possibly can before you have to go back.

I can't imagine what your family is going through. Best of luck with everything.

[HealyMonster]

Re: My dad passed away -- left my mom with extreme debt

sorry for your loss buddy. Very sad losing a parent.

With that said, nobody is perfect, im sure your dad did the best he could, and we all make financial mistakes not thinking we might pass away in the middle of it.

I would recommend not thinking about it for the time being, and grieve along with your family. Once a few weeks have gone by, and your mom is ready to start resuming her life, it will probably be best to sit down with her and have a direct conversation about the things you found digging around.

Like others have said, this isnt the first time this situation came up in this world, so a Lawyer will probably be able to give you guys the best gameplan to overcome this as easily as possible.

Wish you the best of luck man, keep your head up!

[fistofrage]

Re: My dad passed away -- left my mom with extreme debt

Sorry for your loss man.

Definitely get an attorney, a financial adviser can't do anything for you in this case. They manage assets, not debts.

An attorney will be able to draw up the paperwork that will allow him to work with debtors which is something that neither you or anyone but your mom would be able to do at this point.


As for the timing, definitely wait until after the ceremony and give her as much time as you possibly can before you have to go back.

I can't imagine what your family is going through. Best of luck with everything.

I agree an attorney may be able to handle most questions. The reason why I said to get a financial advisor is because he said the mom had little to no experience handling the finances. To get 80k in debt if that's not including mortgages or car loans the dad must of either had to have assets for collateral or a proof of decent sustainable income.

Long story short now is not the time to panic and cash in 401ks and other assets that could be protected. Hopefully he has a binder or file that at least spells out the debt and assets. I'd get a couple of opinions before doing anything to try and save the house etc. good luck.

[kehlis]

Re: My dad passed away -- left my mom with extreme debt

I agree an attorney may be able to handle most questions. The reason why I said to get a financial advisor is because he said the mom had little to no experience handling the finances. To get 80k in debt if that's not including mortgages or car loans the dad must of either had to have assets for collateral or a proof of decent sustainable income.

Long story short now is not the time to panic and cash in 401ks and other assets that could be protected. Hopefully he has a binder or file that at least spells out the debt and assets. I'd get a couple of opinions before doing anything to try and save the house etc. good luck.

The difference is financial advisers income is based on their clients making money whereas a lawyer makes income based on time spent.

It's sad but only the lawyer will have the best interest in mind in this case.

The FA doesn't stand to make anything and they don't get paid to give advice.

[Smallville102001]

Re: My dad passed away -- left my mom with extreme debt

Man sorry to hear about all of this. That really sucks and I don't really know what to say other then I hope things can some how work at well and fast.

[WazzuRC]

Re: My dad passed away -- left my mom with extreme debt

Thanks guys. A few things to add.

-If I wait a few weeks, those payments will be overdue and she'll get late fees on these cards, no? That's the last thing she needs right now.

-Luckily, my parents have very little in collateral. They actually are currently renting. They have a sweetheart deal where they pay $1000 for a beautiful 3-bed home from a friend that has way too much money. That said, I'm not ready to ask this friend that I hardly know to help financially if it came to that. They also have three cars -- loan payments on two and own one outright that isn't worth much. That's really the only assets they have that any creditors could touch.

-I have a financial advisor friend that I will at least seek counsel from so hopefully she can help a little from that aspect.

-This isn't even counting potential medical bills. We're still hoping that my dad's coverage was good enough that she won't have to pay too much out of pocket.