Wisdom of TSF: Debt consolidation



  • Nah not me ya shunts: Mother-in-law has put herself in the shit.

    Retiree, basically a fucking hermit who has cooped herself up inside with her dog and plays fucking Farmville or some other related shit all day.

    In between racking up a few dollars a day on FB games, she's positively bleeding money into iTunes (games) and PayTV as well as just not looking after her shit day to day e.g. multiple pet insurance policies. Also still has a mortgage, though being in Sydney the property is worth a solid amount.

    As a result of her inattention, she's punched on to what I consider to be an astounding amount of credit card debt for reasons I will never fucking understand. We're not talking $100K but the way my wife looked when she was going through the papers (I stay away from that shit) it was certainly moving that way.

    The mortgage she has is probably a modest amount compared to the property value, because its fucking Sydney so a bagload of equity is not out of the question.

    My first instinct is to talk to the bank and ask if she can extend the mortgage against her equity in order to get rid of the debt.

    What does the collective wisdom of TSF thinK? Keeping in mind financial markets and things are different everywhere.



  • @NTA I'm no expert but the interest on the mortgage can't be as steep as the credit card? Either that or sell the house and move in with you 😧



  • @canefan said in Wisdom of TSF: Debt consolidation:

    @NTA I'm no expert but the interest on the mortgage can't be as steep as the credit card?

    Yeah that's my thinking - not sure what rate she's getting, but it can't be more than 7% on the house. The cards are upwards of 20%.



  • @NTA Cut her farking cards up toot sweet!!



  • @canefan said in Wisdom of TSF: Debt consolidation:

    @NTA Cut her farking cards up toot sweet!!

    Wife is still over at her place, getting everything cancelled that she doesn't need to survive. I have offered to cancel her dog in the past, but think I'll leave that alone for now.

    We weren't expecting to look after another child in our 40s, that's for fucking sure. 😠

    Note that we only caught this because her health insurance declined when Mrs TA took her for new glasses the other week.

    SNOWBALL BITCHEZ!



  • @NTA She probably needs someone to administer her affairs so she doesn't get herself in more strife. Clearly she can't be trusted to exercise good judgement on her own



  • @canefan said in Wisdom of TSF: Debt consolidation:

    @NTA She probably needs someone to administer her affairs so she doesn't get herself in more strife. Clearly she can't be trusted to exercise good judgement on her own

    Yeah Mrs TA was taking her to the doctor originally after the took a bit of a turn a couple of weeks ago, driving the opposite direction to our house for an hour. We live ten minutes away.

    We've been discussing power of attorney on her estate as well as her father's.



  • @NTA Get the POAs in place ASAP. Not sure if you do Lasting Powers of Attorney in Australia but these are very handy. Basically you all agree who the POA is in advance and then it is up to the POA and associated people (GP, maybe Social Services etc) as and when the POA is invoked. Saves a lot of hassle in the long run.

    In regard to the credit card debt @canefan said, cut those fuckers up and ensure the bank don't go offering her another one. After that is is deciding on which is the least worst option. If she is struggling to service the credit card payments then consolidating might be the best option. However be aware that as (usually) the mortgage has a longer term even though the interest rate is less you can end up paying more over time. Another option might be to roll over the credit card debt into an unsecured bank loan. Interest will be higher than the mortgage rate but it ought to be paid off quicker, no issue with the property being at risk either.

    Good luck with it mate.



  • @Catogrande yep we have lasting/enduring PoA here. The wife is onto it.

    Spot on about the cost over term. I was thinking more of ways to stop paying credit card interest while we look to sell her house.

    And we WILL be selling it. On closer analysis she can't afford it - her pension only just covers the loan repayments. I mean with $50/week left over. She's blown all her superannuation as well. So the value of the house is it for the rest of her life.

    And thanks to the fucking dog, it needs some reno work due to damaged carpets.



  • @NTA Do you guys have equity release mortgages? In the UK there are schemes that will allow a consolidation loan, plus maybe a bit of cash or a small income against the value of the property with the interest rolling up. This of course eats into the equity over time but it does allow the old dear to remain in her own home and have a bit of financial comfort albeit at a cost to her beneficiaries.If such plans are available make sure there is a no negative equity clause and do some worst case scenarios (i.e. the old deal living to 105 and that sort of thing).



  • @Catogrande mate you had me right up until "cost to her beneficiaries."

    😉

    It's a four bed, two storey townhouse. For her and a small dog. She only owes about 35% of its market value, and even after the carpet replacement we will need to do, she can't stay there.

    The fucking strata fees are mental, I might add.

    I've also just learned that her dad - who lives nearby and owes nothing in his 3 bed freestanding - also has practically zero other money.

    So the plan seems to be sell both properties, and move them in together somewhere else. Freestanding house. Try to get her a carer's allowance or something.



  • @NTA downsizing. Good.



  • Over here at least poa stops the moment they pop their clogs so keep that in mind when the vultures start circling .... I mean grieving relatives come to pay their respects.



  • @jegga said in Wisdom of TSF: Debt consolidation:

    Over here at least poa stops the moment they pop their clogs so keep that in mind when the vultures start circling .... I mean grieving relatives come to pay their respects.

    Where there's a will, there's a relative.



  • @NTA If you consolidate the debts, she MUST change to avoid getting back into debt. Otherwise people go forward and wind up with a big consolidated debt AND all the other debts together. This can be really hard to do - although you have a crack if she winds up in care of some form and you have POA.

    She has a problem, and is very very unlikely to have recognised that yet.

    Good luck



  • @jegga said in Wisdom of TSF: Debt consolidation:

    Over here at least poa stops the moment they pop their clogs so keep that in mind when the vultures start circling .... I mean grieving relatives come to pay their respects.

    Yeah I think its the same here - so does that mean we need to ensure the right Executor is appointed on the will or something? 🤔

    =================

    Mrs TA got home around 10PM (I left near 7PM) and gave me the details. The MIL hasn't even got a mobile phone right now - everything but the landline has been cancelled. She's back to FTA TV and not even internet.

    Mrs TA's brother came over as well, and he was pretty calm about it, which is odd because he's a massive hothead. They suggested the plan to sell both properties and move in together, but that she might have to rent while one of the properties was being disposed of.

    "But rentals don't allow pets* and I won't be separated from my dog under ANY circumstances!"

    If I was there, I would have pointed out that she can't actually afford the dog and, while I'm a dog lover, accidents happen

    alt text

    *Recently I believe NSW rental law changed to allow pets unless there was a pretty fucking good reason not to. I don't think we can risk the bond when the dog pisses all over the carpet though.

    Mrs TA hasn't slept which is a big mistake. Things still look massive to her because she's frazzled.

    I looked at the figures, and its just over $40K in credit cards and a mortgage she can't afford. So while its bad, it isn't that bad. Guy I played rugby with had his Mum gamble away her Dad's house and so they all had to move in together.



  • I missed something here, if they aren't living together now is it a good idea for your in laws to move together *? Also those houses sound pretty big for people living alone, it'd probably be a lot less hassle for them to have a smaller place.

    *(Moving back in with my ex....shudder)



  • @jegga said in Wisdom of TSF: Debt consolidation:

    I missed something here, if they aren't living together now is it a good idea for your in laws to move together *? Also those houses sound pretty big for people living alone, it'd probably be a lot less hassle for them to have a smaller place.

    It's my mother-in-law and HER father - Mrs TA's maternal grandfather.

    And it isn't a good idea anyway, because they haven't lived together for nearly 50 years and she can't stand him for more than a few hours at a time.

    BUT this is what you get when you're not adult enough to look after your own affairs.

    Yes the places are too big for them so we'll definitely get them to basically get something as small as possible. Hopefully all tiles so the dog can't fuck it up too bad. But out here the prices are ridiculous because Sydney.

    A three bed single storey on a fairly small block will probably be around $800k. If we can find one, and if it doesn't have its price driven up further by investors and Indian/Asian families.

    Would be easier if the three of them (MIL, Grandfather, dog) all carked at once.

    I'd miss the grandfather.



  • @NTA said in Wisdom of TSF: Debt consolidation:

    @jegga said in Wisdom of TSF: Debt consolidation:

    Over here at least poa stops the moment they pop their clogs so keep that in mind when the vultures start circling .... I mean grieving relatives come to pay their respects.

    Yeah I think its the same here - so does that mean we need to ensure the right Executor is appointed on the will or something? 🤔

    =================

    You may want to check if it's the same in Aus but over here an Enduring Power of Attorney can have a clause which gives the attorney (presumably your wife) the power to create a will.



  • @JC said in Wisdom of TSF: Debt consolidation:

    You may want to check if it's the same in Aus but over here an Enduring Power of Attorney can have a clause which gives the attorney (presumably your wife) the power to create a will.

    Thanks for the tip JC. Will chase that up as part of the discussion


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