Learn Me Debt Consolidation/Relief

It's unusual for me to agree with Dr. Hess on a topic like this, but this is at least the second time this exact scenario has happened...if you bail out your mom and ask her to please not do this again - and I totally understand why you'd want to do that - just don't be surprised if the same thing does indeed happen again.

You need to do something different if you want to ensure it doesn't happen again - maybe bailing her out on the condition that she gives you limited power of attorney such that you can ensure she can't get her hands on a credit card again.

I agree that just bailing her out is the wrong thing to do, which is why I don't plan to. I'm not even planning to bail her out halfway (i.e. pay her down so that she's below the $5,000 threshold for HUD). What I'm trying to do is come up with and direct her on a plan that will put her on track to dig herself out of the hole. 27% with $220/month payments is insane for her. But if I can negotiate that to 8-10% with $150/month payments and establish a pattern of her paying that every month (even after she's out of the hole, she can put that into building an emergency fund) as a constant reminder of the trouble she can get herself into. Then, I'm going to take steps to make it extra hard for her to get a credit card again.

I'm not going to try to solve her problem for her. I'm just able to think clearly and rationally to come up with a plan that she can hopefully follow to solve it herself. Her mental illness and other personality traits make it very difficult for her to step back and come up with that plan on her own.

That's why all I'm asking about are suggestions on how to get her debt into a form that will be easier for her to manage with lower risk of her relapsing into addictive behavior.

I also agree with Dr. Hess.  However, having been in this situation with my father (who had even less financial discipline than your mother), be careful. After too many times bailing him out, I finally said No.  And he essentially disowned me. I haven't spoken to my father in 8 years and have no idea if he's even still alive.  

In reply to Dr. Hess :

I don't disagree.  I never said to "bail her out".  But there's a lot of real estate between bailing her out and telling her that she made her bed, she needs to sleep in it.  Especially given the mental health issues BB has mentioned.  

Anyway... to get back on track...

This is why what I'm looking for are suggestions for what I can direct her to do about the credit card debt. So far, the one I like the best is to have her go to her bank or a credit union, discuss the situation with them, and find out about getting an unsecured loan with a halfway reasonable interest rate.

Any other suggestions on place she could look for getting a similar sort of loan if the bank isn't inclined to?

So I was about to suggest conservatorship....then remembered that I had had a very similar conversation with someone on this board a couple years ago...and I looked the thread up.  Turns out it sounds familiar because it was exactly this situation we were talking about in the other thread.  

2015 - the first bailout

Honestly, my advice hasn't changed.  I don't know if she'd agree to it or if you're willing to do the recordkeeping, but that's the only foolproof way to prevent her from getting credit again.  However, if she won't consent to it then it can be a fight to even get the court to award conservatorship.  Depending on how deep her swings can be, though, it's likely that it's a fight you'd win.  You might have to swing a couple grand to an attorney in the short run, but it would likely prevent you having to bail mom out every couple of years down the line.  Plus peace of mind knowing she's at least going to have the money for groceries/etc.

The suggestions about power of attorney and freezing her credit are good ones, but in the long run I'm pessimistic that they'd stop someone in a manic swing from revoking the POA and unfreezing the credit.   T

Baron,

Faced similar problems with my mother, but at a greater magnitude.  We had to pursue bankruptcy and revamp her whole living situation and are currently working with social services to have a conservator take over managing the financial end (because my brother and I have been unable to control her well enough to be stable).  She had a recent close call with a scammer that made her willing to consent, so we have that going for us.

At least I can tell you, you arent alone in this.

In most, if not all, states pension payments are exempt from creditors claims.   A creditor may obtain a lien against a bank account that receives pension of social security payments because they, and the court, do not know the source of the money.  Upon notice that the money is pension or similar, almost any judge will stop it.

She has no real estate and her personal property - household goods and the like are both typically exempt too, not to mention that they are near worthless anyway.

Don't pay, just let them call and she can tell them that all she has is her pension and household goods and she's happy to answer their call when they call tomorrow.  Her capacity to borrow, her credit, will disappear.  She'll get used to living on cash and the statute of limitations will run in 3-5 years, depending on your state.  If they want to sue, there's nothing to collect on/from so most collection attorneys, after looking at it, won't bother.

If you want to settle it, after some time they will discount down to 50% or less as that is the typical contingency fee that collection attorneys charge creditors.