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Sibling in crisis

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Emali
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Sibling in crisis  Reply with quote  

Hi all,

We have a family situation that is coming to a head. Two years ago my brother's partner moved out. They were just getting by before that happened but these last two years my brother is depressed and in terrible financial shape. He is in his 50s. My sister has been very generous and bailed him out repeatedly and I have contributed as well. He has somehow (thanks, sis) not fallen behind in any of his obligations--pretty much a miracle--but neither has he made any move to solve the long term problems and the well is about to run dry. He has a $600/month shortfall. He has a 2009 car which he still owes $12000 on and he has an unrealistic idea of what it's worth although he will consider selling it. He has $30000 in credit card debt (one card). He has a high interest mortgage (10%) but he can't refinance at a lower rate because the only income he has is his disability payments. His health is bad and the stress and depression isn't helping. He's frozen by inaction. He wants me to co-sign to refinance his mortgage with enough to pay off everything but I will not co-sign. Because of the plummeting housing values I don't think he could refinance even with a co-signer. He owes $37,000 on his house and comparable houses in his neighborhood are selling for about $55000. My sister and I are both retired, both married with husbands who are about to retire. I would like him to go with us to a credit counselor but he has so far refused. He's bitter because I won't co-sign and he sees that as the only way out of his situation. Any advice? Thanks so much.
Post Mon Aug 22, 2011 4:19 pm
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jfurnish
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Tell him you will CONSIDER co-signing if the credit representative thinks it is the best course of action for him and his situation. That way it is back in his court to fix his situation.
Post Mon Aug 22, 2011 10:19 pm
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Emali
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That's a possibility, better than anything we've come up with so far. Thank you!
Post Mon Aug 22, 2011 10:23 pm
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kate032
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You should consider co-signing the loan for him, if and only if, you don't mind jeopardizing your own financial future. Based on what you've said, he has been irresponsible and is showing no signs of reform. Therefore, if you co-sign, you will be responsible for his payments. Since your family keeps bailing him out, he has no reason to begin financial responsibility.
Post Tue Aug 23, 2011 1:19 am
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coaster
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I don't know how many posts we've gotten here over the years from people who've co-signed for someone else, and as a consequence found themselves in a terrible jam. Don't do it. Period. Family are the worst.

~Tim~
Post Tue Aug 23, 2011 5:22 am
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euniceB
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You can't help him if he's still depressed, denial and don't want to accept your help. You have to make him realize what he is doing and there, hr can go with you and your sister with the plan to help him.
Post Tue Aug 23, 2011 6:06 am
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Emali
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Thanks everyone for these thoughts and ideas. More than anything this forum has provided a great reality check for me. I know this is guilt and manipulation coupled with bad decision-making and a disastrous life style. Unfortunately, there's another sib who does the same thing. Thanks again!
Post Tue Aug 23, 2011 1:19 pm
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eastmn
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Paste from another thread:

Dollars & Sense Article: Robert Manning Consumer Finance Expert;
His "Responsible Debt Relief Formula" Write down debt to meet
realistic income/expense ratio, therefore avoiding bankruptcy.
Settled at 37%
http://www.youtube.com/watch?v=IM0DhBj-5y8

...
Post Tue Aug 23, 2011 2:40 pm
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soybean
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What's the interest rate on that $30000 in credit card debt? I'd guess it's very high, which another dark cloud in this situation. If he's missed some payments or been late on payments on that credit account, the rate could be up around 30%.

If this is the case, going to a credit counseling service may be beneficial. I believe credit counseling agencies can often negotiate with creditor to get interest rates reduced and payments lowered.
Post Wed Aug 24, 2011 6:50 pm
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littleroc02us
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Why not tell him to sell the house for 55k and after he pay's off the 37k and commissions and such he could have around 10k. Then sell the 2009 car to buy something cheap for the time being which could save thousands also unless he is under water. But even using the 10k to get out of the loan and into a used car for say 5k would solve a ton of problems. As for the 30k in credit card debt he will need to cut those suckers up and begin paying off the debt. This would be a much better situation then the one he is in or he can just keep doing the same if he won't budge. As for co-signing. NEVER IN A MILLION YEARS!

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Aug 24, 2011 7:56 pm
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Emali
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More ideas to think about. Thanks!
Post Thu Aug 25, 2011 12:32 am
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RonBrun
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With his only income being disability, I'm not seeing how he is paying the credit card payment on top of his other obligations. Rarely do I advocate bankruptcy, but if I'm reading this correctly that might be his only option. Either that, or increase income in a substantial way. The interest alone must be close to 500 a month or worse.
Post Wed Aug 31, 2011 4:54 am
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coaster
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Great advice in this thread.

The words "frozen by inaction" struck me. That's a very common symptom of depression. I think that making decisions while in a depressed state is a recipe for making bad decisions. But cosigning for him would be making a bad decision yourself.

With a downturn in a life situation, expectations must also be downsized. Maybe it's time to lovingly and patiently convince him that it's time to let go of the home and the car. To let go of the obligations that are weighing him down. To simplify his life until he get some effective treatment for the depression. And if he isn't getting professional medical/psychological attention for that, get him there! You might have to be proactive. "Inaction" is the key word with depression. Been there; I know how it is.

Are any siblings well-off enough and/or have a spare room you could take him in at least until this mess clears up? Or get him set up in an apartment? He needs help, but the help he thinks he needs isn't going to be a help at all.

~Tim~
Post Wed Aug 31, 2011 5:22 am
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Eric80
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Debt Management can be an excellent solution to manage your debts, but it will depend on your individual situation. For example, an IVA (Individual Voluntary Arrangement) or another debt solution may be of more help. When considering debt management, you should also be aware that unlike an IVA, it is not a legally binding agreement. There may be other debt solutions available that are more suitable to manage your debt so it is best to speak to a specialised debt advisors for help. This way you will not have to keep bailing your brother out, it sound harsh but he need to stop relying on his family so much years after the event.
Post Sun Oct 30, 2011 1:56 pm
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