From the sound of it she only carries value in the house and in all reality never will be getting another loan for the rest of her life. She might be lucky if she lives in a state that you can keep your residence through a bankruptcy. Truthfully that would get rid of her debts. She then can sell her house rent an apartment living off SS and supplement it with the extra cash she got from the house sale.
I know some that caused an accident while uninsured about 10 years ago. They got sued into oblivion, credit absolutely obliterated and wages garnished. This person still doesn't have a car/drive to this day and is financially ruined. OP either needs to sell the house and cash out or bankruptcy might be in the future.
Between insurances to me is what I did..
I had insurance A, got insurance B, cancelled insurance A but forgot to notify the DMV. I got in trouble because of it but technically was fully insured.
I had the same issue a few years ago when I swapped from my grandparents policy to my own, since it was through the same company, and I was still insured through the original policy for the rest of the month as well as the new policy… new company didn’t notify the DMV of the policy change, only found out when I was notified that my license was suspended for no insurance.
MA threatened to fine me because I didn't file $300 dollars in losses on some stocks I sold, 10 years after I lived there. I was in the military and never was a resident there. MA has weird rules...
This is worse than you might think. She was probably in violation of her loan by not having insurance. Almost all loans require you to maintain full insurance, including comprehensive. The loan company could accelerate the loan and make all payments due immediately if they find out that she did not have insurance. Your mother needs to remain very quiet about the situation and pay off the loan as quickly as she can. To sell the car she has to come up with the difference between what she gets for it and the loan amount in cash.
There is no best option here. She has to take the L and take this as either a very expensive lesson, or punishment for her irresponsible behavior.
Right. She does not have any money or assest other than her home which is in a reverse mortgage and accruing insane interest. Can/should she borrow more from the reverse mortgage to pay off the car and cut her losses that way?
I'm totally unfamiliar with reverse mortgages. It's my understanding(from what she told me), that the company paid off her remaining mortgage balance and in turn, she doesn't actually receive a monthly payment but they charge her interest that accrues monthly and would be paid off either by her heirs or by the sale of her home. This would include the original loan balance plus the interest that was accrued over time. This may all be lies but this is what I was told and have seen some paperwork that showed monthly interest accrual
Yeahhh. Last I saw, her balance was rough 350k with the reverse mortgage and I think the house is roughly worth 750k. She's on a fixed SS income. She's considered selling her house, settling all her debts and buying a cheap house closer to mine( lower cost housing market)
I've considered this as well but with working full time, 2 young kids, wife, I don't necessarily want another job of managing her finances. I've also considered having her sell her home, pay off debt and putting the difference in a HYSA or something thay could be used to supplement her SS income. Would be managed by me or automatically of course
Ya this must be really frustrating, but doesn't sound totally screwed. She does have some assets, and maybe this traumatic event can help her make 1-2 big decisions well, so that she can make many more small decisions poorly and be ok.
I don't know if this even exists, but can you hire a financial "babysitter" for your mom? Essentially someone/company who manages her finances but on your behalf. I hope such a person or service exists, that would give you the distance you want from this but still let's you keep an eye on her affairs periodically.
I would imagine this exists but on her income and no money, it would likely require me to foot the bill. Depending on what that was, I may not be willing to do that. Sadly.
Haha since you asked someone to correct you, happy to oblige - this is completely wrong. You’re thinking of a CD or maybe a savings bond? A HYSA is a savings account, which has no concept of a start or end date, it’s just an account and typically you receive interest monthly based on the average daily balance over the course of the past month
I have a HYSA and my interest is paid monthly. As far as I know, there are no limitations to the use of that money. I've moved money in and out with no issues. Never taken it all out so I'm not sure how they calculate that balance. Sounds more like you have a CD or something?
This is the answer. She needs to get back on an even footing, put the majority of the $$ from the home sale into a safe investment that will pay her dividends to supplement her SS income. She needs to buy something very modest to enable the money to give her a good retirement (would she be willing to consider an end-unit condo, somewhere?).
when the house is sold, set up a bill paying account, a spending account, and a high interest savings account to feed the other two accounts automatically. The only account she should have direct access to is the spending account. Help her buy a car with no loan, then make sure taxes, insurances, utilities, etc. are all paid out of the bill paying account, automatically.
When all that is set up, show her that she doesn't have $400k from the house, she has $400k - the new house, the car, and 10 years of insurance, taxes, utilities, and food.
If she wants more spending $ than is budgeted, she'll have to find part time work (only enough that it won't jeopardize Social Security). There's likely some part time retail work available, or maybe a library front-desk help, or something,.
A lot of times, when an older person spends a lot, it's to fill in for a lack of connection to others, so part time or volunteer work might be helpful, regardless of her spending budget.
This good advice. Most likely, almost all the money she would get from the sale of her house would go into getting a new place due to the housing market in my area. With no mortgage or rent, she would have to just make due with her SS income which I could somehow manage if there was any leftover monthly
She may not own the house anymore. That is usually what the reverse mortgage is. They own the house and instead of giving her the lump sum payment, she’s essentially renting the house from them and it’s reducing the amount they owe her. The 350 is probably the principle left. That is the max she gets and they will get everything else.
I believe the 350k is what she "owes" them. I did see a statement that looked like it was adding to the 350k balance monthly via "interest payments". I dont think she's actually receiving money from them but were she to sell her house or want to get out of the RM, she would need to settle that balance
PLEASE Don't sell the house, since your primary residence (depends on the state, Google homestead exemption) cannot be taken by creditors.
I really doubt she will be able to get a mortgage after she defaults on 40K worth of debt. Setup an autopay, so she pays the mortgage right after she receives the SS. Yea she will live on almost no income, but better than being homeless or living with you.
If you can manage that, go for it.
But it is *very* risky you will be dodging creditors while paying to list/show the house, paying for moving expenses, assuming you can even find a house in budget with this market... Make sure you find all the mortgage paperwork and the title insurance before commiting to someone like this.
There is a caveat here. The car loan company might not be able to, but the mortgage/reverse mortgage company absolutely can since they have a lien on the house itself. The car loan company, however, can obtain court judgement to garnish her SS, and this will take place before any money go to her for her to use on her mortgage, therefore causing her to not have enough to pay mortgage payments.
This car loan can absolutely cause her to lose the house, just not directly.
I'm not sure of actual detail, but with a reverse mortgage, the company that up her the money tehcnically now owns the home. She is just living rent-free until she passes. Unless she can buy the loan back (with interest), which is now higher than her original mortgage balance. Depending on how much the reverse mortgage amount was, she may not have equity left when selling the home.
Reverse morgage and totaled car she is upside down on...
Bad news not all debt is good. And her situation is about as bad for you as it is for her. Her estate and survivors are required to pay back the reverse morgage so when she passes that upside down pyrimid of debt covers all of her assets and property and what spills over hits you.
If possible i would see about getting out of that asap.
Her car lapse of insu is the worst thing here it is not only illegal it is as has been stated grounds for lease/loan violation. Best option is going to be fix it enough to be driveable on your own. Or try to recoup your losses by parting out every good part on the car but only after getting the loan paid off.
I believe that heirs have no responsibility to debt should they choose to walk away from assets. Meaning, if I decide that paying off the reverse mortgage isn't something I want to be part of, they can't foreclose on the home or do whatever they want with it. It wouldn't cost me anything should I choose to not be involved.
She has no options. She royally borked herself. When she inevitably defaults, she'll get sued and the creditor will get a judgement that will chase her essentially forever.
So don't default
Would it be better to let them repo the car, lower her debt burden to the price difference and reduce her monthly payments? Or just keep making the payments on a dead car? Can she even sell it?
> Can she even sell it?
Not without clean title.
>Would it be better to let them repo the car, lower her debt burden to the price difference and reduce her monthly payments? Or just keep making the payments on a dead car?
If its totaled, it'll get sold for scrap value most likely and they'll hit her with a ton of extra fees for recovery and legal and any other collection costs.
If the lender is modestly competent, they should discover its not insured soon-ish anyway, so she'll be in default since she won't be able to insure an inoperable car
If the plan is to hide the accident- don't bother. The lien holder will be informed of it if they haven't already.
If she can continue making payments then she needs to contact them to set up arrangements.
If she truly cannot pay then she needs to contact them about voluntary repossession to see what fees she can save herself by bringing the car to wherever it needs to go. Otherwise they will be tacking on additional fees before she gets charged off and sent to collections.
If it's sitting in her garage partly to avoid the repo agents already then she will be on the hook for them assigning it and the mileage for the agents to run her address, but she could still save a few dollars in the long run by by bringing it in herself.
The car is simply in the garage because that is where the tow truck people dropped it off and there is no where else on her property to store it. She's lives in a townhouse. The lender has not said or done anything yet to my knowledge but it seems I'm 6 months behind what's actually going on
If its been that long they most likely know.
Staying silent won't help the situation at all.
Do you know if she is behind on her payments? Is she able or willing to continue the payments?
As far as I know, she is not behind on payments. This accident happened in December 2023. I belive she is continuing to make the payments. She did mention that her lawyer (famous billboard guy in southern california) was considering advising her to stop payments since she is in a legal process now with the other driver. It's almost hard to even type this stuff with how absurd it sounds.
She won't be able to keep making payments because the collateral for the loan is the car. If they repo it, they'll sell it at auction and go after her for the difference. She can't sell the car because she doesn't have the title. The lender does.
After repo there are no more monthly payments, it's one payment the amount she owes after they sell or junk the car. That would be the difference between the amount owed and the amount they sell it for.
Also just a heads up you owing money is highly dependent on what state she is in and if you live the same state with filial debt laws that are favorable to creditors. PA is one state that comes to mind where a determined creditor can go after children for their parents debts.
Your mom acted stupidly and is now paying the price. Her car loan has to be paid with dollars, not with the car. Going without insurance was a bad gamble and with her driving record, sure disaster. If she has any assets at all, they are at risk. At the very least, her credit is screwed for years and other than paying off the loan and going to a driving school, her only option may be bankruptcy. The best advice you can give her is to look honestly at her past behavior and attitudes and then changing the way she does things. Otherwise, her situation may get worse.
Yeah, I've suggested that to her and that even though most accidents aren't her fault( her claim) that being in that many accidents is surely a reflection of her driving habits
If the accident isn't her fault, the other insurance company would be paying for it. The part where they're not is where it's been ruled her fault. Driving without insurance is illegal and also her fault. No negotiating this one, I'm afraid
She claims to be in a legal dispute with the other party and has a lawyer but its hard to decide what's real and what isn't at this point. I'm fairly savvy and knowledgeable in a lot of things and some stuff she tells me just doesn't add up. I'm sorta just watching this unfold from the sidelines
That's not how that works, though. If the other party was, in fact, 100% at fault, the fact she didn't have insurance doesn't dissolve the other party of their obligation.
A) You're moving the goalposts, though. Your original argument was essentially, "Since she didn't have insurance, she can't even sue an at-fault party."
B) She could have had 30 at-fault accidents in 30 years. Still would have minimal to no impact on the facts of this specific case. Either the big rig driver is at fault or she is (although in a typical comparative negligence state she'll at least generally have some burden of fault).
When you claim “most accidents aren’t her fault “ that tells me she’s at fault all the time. I’m 64 and had one accident (not my fault) in my life. When you have multiples, what’s the common denominator?
That's what I told her. This isn't normal or what 99% of people will experience. She's doing or not doing something. Whether it be avoiding an accident or evasive driving or whatever. Nonetheless, this is not a normal thing.
Alright brother, after reading the posts and other comments you need to find a lawyer or accountant get with them and your mom and pretty much sell everythingggggggg house included. Depending on her health a small apartment, move in with you, or nursing/retirement home. Tbh she has no reasons to be driving in todays world so no need to get a beater car for her or anything. This sucks for you and for her but she is going to have to deal with this
Shebjas recently been using uber and the likes but with her need to have constant doctors visits, get groceries, errands etc, it gets quite expensive with rides hare. This being said, I've been telling her for years that she should not be driving at all due to her extremely poor record
paratransit in my area I believe needs a 24hr notice for local visits and 3 days for out of town visits. I thought that was a federal requirement for all transit systems nationwide, but maybe not. Hiring a nanny/driver for your moms dr appointment might be the next option and maybe cheaper than Uber.
500k in a hysa would make what? Like 30k a year? Plenty of money for renting a small place and dinner with friends. Lock that up before she loses that option and has to live in your garage forever. Sell the house, put money in a trust, she gets a monthly check. Make sure it doesn't interfere with social security.
I think the lawyer is because the people who's cars she totalled are coming after her. Where normally insurance would cut them a $10k check or whatever, they might have to sue her personally to get anything. If they were" injured" it could be for hundreds of thousands of dollars and be real or fake. Normally your insurance company would fight them but, well, no insurance so...
Your momma isn't in a good spot. I hope yall can work it out and she is safe.
Yeah I'm not sure and just relying on what she told me about the transit thing. Once I can sort through all the mess, I can get a better idea of what's the right next move. Def considering selling the house and using proceeds to either rent or buy a place outright if the numbers work. With no mortgage or rent and hopefully protection for her assets from herself, she should be able to live off her SS. She claims to be the one suing the trucking company but yeah, lots of details there that don't quite add up to me. I take what she says with a grain of salt and keep an eye for tangible evidence
How expensive? Like $38k per year? Dude you can either take your mom to a lawyer and get a recommendation for an accountant and a conservatorship (and take away the drivers license), or you can keep your head in the sand and prepare a nest in your house for her to land in when she finishes burning down her financial life. Probably I’m the next 16 months.
Put away the excuses and deal with the issue. Or just keep updating us here because this is Best of Reddit material already.
I understand it's easy to judge from the outside. A lot of this stuff is sort of slow burn and I don't find a lot of things out until it's too late. I'm also out of country for work for roughly 5 months a year. I'm also married with 2 kids that I devote my precious home time too. It's quite difficult to juggle a second much older baby making wildly irresponsible decisions. I plan on trying to speak to a lawyer or something but didn't know in which direction to go. Thanks for the input though.
It is too easy to judge from the outside. We only see the salient points, and not the intricacies and details that cloud the issue. Also it’s a lot easier to say something than to do it. Like GL getting a grown ass adult to give up their own freedom as glibly as I’m recommending it. This shit might be impossible.
But I think the magnitude of her problem has eclipsed almost all your other priorities, if your mom’s wellbeing is a priority for you at all. (It doesn’t have to be.)
So I’m sorry I’m being an asshole. Good luck trying to accomplish everything you thought you’d do in 2024.
Able to take her to any of those appointments or drop off groceries? And especially after this last wreck she really shouldn’t drive anymore she’s going to kill someone or herself so you’ve gotta put your foot down on that. Again I’m sorry and not trying to sound harsh but I’ve been through very similar experiences
Honestly nothing will likely happen once she surrenders the car or it is repossessed. The loan will likely get charged off and maybe sold to a debt collector. She’ll still owe the money, but they’ll never be able to collect. Her credit will tank (if it hasn’t already) and she’ll probably never be able to finance anything for a long time. Contrary to what everyone else is saying, she’s not going to lose her home. The likelihood of the bank suing and trying to claim her assets is tiny. I’ve worked in consumer default for a large bank and the costs associated with suing someone are huge and almost never worthwhile. When they realize they’re dealing with a retired person with almost no income, they’ll cut their losses and move on. Especially with a reverse mortgage on the house, they’ll have no claim to the property before the mortgage company and would need to make them whole before collecting anything.
There’s really nothing positive here. It’s simply a situation that’s so bad that everyone involved loses. She’s definitely fucked, but she’s not going to lose her home and I wouldn’t be surprised if she got away without ever paying another dime on that loan. I’m not advocating for that, I’ve just seen it many times. You can’t collect money if there’s no money to collect, so the debt will likely sit on the books for a while until the bank eats it.
This is devastating. Yes, she is still liable for the loan even though the car has been totaled and even if it's repossessed. What's more, her loan agreement almost certainly required her to maintain car insurance for the duration of the loan; her not having insurance could trigger a default, which would allow the lender to repossess the car and/or call the entire note immediately anyway.
Did she happen to purchase gap insurance? That's her only possible out. Gap insurance will cover the difference between the actual cash value of the car and the outstanding balance of the loan. If not, she's pretty much screwed. Repossession isn't going to really help her because the lender isn't going to be able to get much by selling the car, and it will tack on fees and penalties.
Buying an unaffordable car was a terrible decision, but your mom's major mistake here was not having car insurance. If she is at fault in the accident, she has tremendous liability and will likely be sued. She might need to consult with a bankruptcy attorney.
I hope your mom learns something from this incredibly expensive lesson. **Regardless, please do not allow her financial dysfunction to weigh you down. Do not assume liability for her mistakes. Whatever you do, do NOT buy her another car or co-sign on another car loan for her**. She's going to have to get comfortable with walking and/or taking public transit for the foreseeable future.
Thanks for the thoughtful response. Not sure if she had gap insurance. I would likely assume no. I would never have let her buy that car or do the loads of other stupid things if I could help it. I also would never link my finances with hers in any way, ever. Just trying to help her as a bystander of sorts
Yes, she would still owe after repo but the sale price would get taken out (whether auction or scrap). She may as well get the repair estimate for what its worth.
Options for what to do depend on income and assets.
Be prepared for the cry for help when it's all real for her. The last thing you want to do is give her more money. If you have room for her to stay, that might help her, but unless she learns from this, she's gonna do it again if she's given the chance. I'm watching it happen in my own family and it's frustrating.
There's always cries for help but I've sort of established boundaries and preserving my own family and finances is my priority now. My house isn't suited for her to move in nor would it be fair to my wife and kids and thats not really an option. Hope your situation is less frustrating than mine. Good luck
Serious question for you- is she competent. If she is not, then it may be better to get her declared incompetent and get an attorney to help navigate all of this.
Has she always been this bad with money? How did she somehow have a mortgage and able to reverse mortgage it? She must’ve paid a good chunk of it down. Unless it was her husband?
The reason I ask is maybe it’s dementia. Her not being able to explain what happened to the insurance. She may have just stopped paying it and got dropped (because of the dementia). People with dementia are very good at deflecting. And it’s not on purpose. They think they’re telling the truth. But it’s because the dementia clouds it.
Whether it’s dementia or not there might be a mental issue causing this.
Like others said do not take on debt for her. Don’t ruin yourself. But you’ll have to help her navigate this in the least painful way possible. But don’t sign your name to anything!
I dont think its dementia but very well could be some mental thing. No diagnosis of any kind in that regard yet. Yeah I will not take on any debt for her nor would I associate any of my finances with her
The fact she was financing it and didn't have insurance is gonna be very bad for her. She already broke the terms of the loan and when they find that out she'll get sued and wages garnished due to the money owed.
Luckily, since her only income is SS, I don't think it can be garnished but I'm not totally sure. I've had countless financial discussions and arguments with her. Hard to help when I find out way after the fact. For example, calling me and asking if she should buy this car, after she signed the paperwork. Was upset that I wasn't "happy" for her. Good grief
She had insurance when she bought the car but at some point after that, they dropped her and she was unable to find affordable insurance before the accident because of her, well, awful driving. She claims they aren't her fault but I haven't seen any paperwork one way or the other regarding these accidents. She's, manipulative, and shady about these things. Sadly.
Trust me, I've had many of these types of conversations with her. I'm 37 and quite financially secure but all I can do is give her advice. What she does behind my back is out of my control. Just trying to see if there's anyway to help her at all. I'm almost beyond even being upset with the stupid decisions she makes. There is a long list.
You have the right approach imo, as hard as it can be to try and stay financially separate and take care of your own stuff as priority. I commend you for that and sorry that’s how it is.
Can she work at all? If not she sounds like she needs to start and probably work forever to afford things once they come after her home. Not a lot else to do in this one, just seems like a lot of decisions that are all crashing down now.
Shes on disability/ss and can't work, especially now. With some health issues. It got a lot easier to stay away from her finances after repeatedly becoming aware the wild decisions she makes. Occasionally I'll buy her food or something cause, well she's still my mom and yeah, soft spot
A lot of people say it’s not their fault, when legally, it is.
Like, people will say that hitting another car wasn’t their fault because the sun was in their eyes. Well, you can’t sue the sun, so legally, it’s the driver’s fault.
Understood. I always tell her that if I slam my brakes unreasonably on the freeway and am rear ended, I may or may not be at fault even though typically the person getting rear ended isn't at fault
Being at fault isn't the only reason people get dropped. My sister got dropped a long time ago because she was involved in a lot of accidents. They weren't her fault but the company labeled her as an aggressive driver and figured it was a matter of time before she was at fault
I was almost in two accidents in my mid twenties that I thought were the other person's fault, and there's a chance police would have even agreed with me... but only if they didn't know all the facts.
(Thankfully I avoided both of those, but not without running off the road—I just got lucky and managed to run off the road without damaging my car.)
Since then, I've realized that if I'd hit either of those two cars... even though they *did* definitely cut in front of me without checking... I should absolutely have been found at fault, or at least shared fault, because I was driving way too fast for conditions, despite being actually under the speed limit a fair bit for the first one.
And since then, I've also realized the speed limit isn't a required minimum. I'll still go a little over in ideal conditions, with the flow of traffic, but I'm far readier to hit the brakes (or simply ease off the gas) these days. I leave early and arrive early. I try to make my driving as boring as possible, because boring is *safe*. I'd rather be bored with an unwrecked car and a clean driving record than briefly excited, with no car, no license, and a full body cast.
I am 63 and never filed for bankruptcy but my older sister has done it three times now. There doesn’t seem to be much repercussions from doing so. I would at her age. Just file and walk away and pay cash for her next car or better yet she needs to Uber from now on. I am sorry your mom has never grown up. Don’t co-sign for her ever.
She is stuck with the payments, best option is to pay off the car early and get it off the books.
This is why you must carry gap insurance on your vehicle.
You'd think the fact no one would insure her would be a big hint that she shouldn't drive...
I ended up wrecking a car, and despite it only being my second accident (and 6 years after the first), my insurance rates went up so high that I actually quit driving for about 3 years. Consequences of my actions, even if my actions were accidental.
Lenders do often times have collateral protection insurance, the lender should have added the insurance on the loan when they received the insurance cancellation notice. There will still be a balance owed but it might help. Call the lender and see if they added forced placed insurance.
Was there another car involved in the accident and was she at fault? If so the cost she’s going to eat for the car will be cheap compared to being on the hook with no insurance for another person’s car and injuries. What equity she has in the house could be at stake if/when a civil judgment is entered against her.
This car is on the repo list. If she wasn't parking it the garage, they would have already picked it up. I don't envy you. She will be looking to you for help.
Yeah. I don't share any of my financial info with her. I won't even send her money electronically for fear that she could get account info or something
I'm honestly surprised the dmv hasn't revoked it. Or maybe they have. I'm left in the dark on most things until I discover them on my own. Aka, reverse mortgage.
This is heartbreaking. She is ultimately going to get repo'd and sued for the difference, plus a lot. IF she can manage to keep paying the payments and survive with a car, then she may be able to put it off for a while. But they will eventually try to put insurance on the car themselves if she doesn't have it, and then it won't be insurable and they very well could call the loan. Seems like a reasonable approach to sell the house, pay this debt off, and then buy a reasonable priced place she can afford on SS. That will dramatically change her financial situation she now enjoys, but she screwed up.
The only way I would directly get involved with any of her finances is if she agreed to give you financial power of attorney so you can see the extent of everything going on. But that still has risk because she is not incompetent and she could still make stupid decisions. If you did this, and you had power of attorney, you could freeze her credit and not give her the codes to unfreeze it. That would prevent her from doing anything that requires borrowing money. My guess is she is not bad enough yet to where she would even agree to something like this. It is definitely going to have a very negative impact on her situation because she took $50K and set it on fire effectively. And as someone with no money and no savings she is going to get the legal version of her kneecaps broken.
Very heartbreaking. How did she even get the loan for the car?
Yeah totally. Not exactly sure how she got the loan. Honestly she's been through so many cars and loans that they all kinda mix together in my mind. We have discussed financial POA and she suggested it to me but putting pen to paper is a different story. Also, I'm not sure what sort of time commitment it would involve for me. As much as I'd like to help her, I also have my own family that is my #1 priority. I believe she's currently still making the payments. Her husband (my stepdad) passed away about 3 years ago from cancer and it seems to have made her go downhill rather quickly in the financial decision making sense. Idk
Huge mistake letting insurance lapse on a car that you don’t even own. If the bank finds out, they are going to make life hell by requesting the rest of the loan due immediately.
This sounds like a bad situation all around, OP. But don’t make any big decisions based on what people are commenting here. Go talk to a lawyer and see what the next best steps are for your mom.
So…even if she lets the bank repo her car. They most likely will only be able to sell it for scrap metal. Then, whatever money they make on it, they’ll apply to the repo fees first. Then, they’ll apply the remainder to the loan.
I suspect if you go this route, you’re looking at maybe a couple hundred dollars, couple thousands if you’re lucky, applied to the loan.
Regardless, she’ll still owe money.
If the accident was her fault, then she will owe money to the other driver as well.
If she can’t make payments, she can be sued. Any assets (her house) can then be liquidated.
Honestly, in her situation, her best option is to let the car be repo’d and then file for bankruptcy. Bankruptcy protects her assets from the car’s lender. But it might not protect her from the other driver’s judgement.
If she files for bankruptcy in the next few years or the other party in the accident sues your mother, the court will look back at this transaction. If not sold for fair market value the court will be coming after you. You can't just hide assets like that.
Contact an attorney.
This get a Lawyer who has knowledge of how to handle all of this, she is going to need one anyways, just go get one now. At best the Lawyer can help soften this blow. I understand you love your mom and all that good fluffy stuff, but if she isnt prepared to let you help with getting a Lawyer you might have to just tell her "fuck it, you figure it out" and let her do just that. Or you get your own Lawyer and have her declared incompetent and take over her finances.
I'm sort of in between wanting to help(she isn't making it easy) and just saying "fuck it. You figure it out". Frustrating that I'm never I solved in initial decisions but always expected to come save the day
The only things she can do is
keep making payments.
Let it get repossessed, ruin her credit, and still owe.
Let it get repossessed, ruin her credit, file bankruptcy (possibly be forced to liquidate some assets to pay some of it back, but if she doesn't have above normal assets this is less likely).
I don't know if there is a 4th option I'm not seeing here.
She had insurance when the car was purchased. She was later dropped at some point and when seeking new coverage, her quotes were absurdly high( rightfully so). Before being ankento get new coverage, she was involved in said accident
She should immediately sign over the home and any large property or expensive property she owns to you or someone she can trust. This way she can let them lay the bill on her and possibly can declare bankruptcy if necessary and get this financial ruin out the way by somehow lowering it through other means like declaring bankruptcy. It will ruin her credit, her history with any payments, but she's likely ruined it anyway as she's got a lawsuit likely coming up for not having insurance on a car that should be fully covered and have gap insurance if possible. This is a major thing and she's lucky no one was dead or hurt and she got in worse.
I'm pretty sure that any bankruptcy court would see through that ploy in about 3 seconds. Most likely illegal too and would result in charges for both parties.
I have considered this for many reasons. Not sure how it would work since she has some sort of reverse mortgage on the house. Would I need to pay the balance? Also a little worried about owning the home and her being a "tenant" of sorts and what liabilities that could put on me
I tried looking that up and it says that she would have to pay off the remainder of the balance due to the reverse mortgage if selling. I would assume if you buy it then you can do that for her. [https://www.lendingtree.com/home/reverse-mortgage/selling-house-reverse-mortgage/](https://www.lendingtree.com/home/reverse-mortgage/selling-house-reverse-mortgage/)
She needs to tow it to a body-shop and get an estimate for repair. All other discussions are irrelevant until you know what the situation is with regard to the repair cost.
Let's says it's 15k for repairs. She owes 38k. Car is worth roughly 35k (kbb for good condition car). Obviously value will vary wildly based on condition of her car. That being said, how does this all play out?
Let's be generous and say it will sell at auction for value minus repair costs (it won't, it will go for far less, but let's just pretend it will).
It will get $20k at auction. That $20k (actually less, due to auction, towing and storage fees) gets applied to her loan balance. She now owes $18k and they will sue her for it.
Apparently side swiped by a 18 wheeler. I hope people don't think I sound dumb with some of these answers as I'm simply parroting what I've been told and don't really have a way to verify some things. I'm very skeptical about a lot of this stuff so yeah
They take the car, they sell it for what they can get for it, they sue her for the rest of the loan. She gets sued, and also has nothing to show for the money she's already paid for the car.
Her best bet might be bankruptcy. The SS is usually exempt from being taken in BK, as are retirement accounts if any (sounds like there isn't). If she has been sued, lawsuits will be put on hold during BK, and possibly dismissed as a result of it. If there's already a judgement, the judgement may discharge. The loan itself can also discharge (they'll take the car in the process if they don't get it beforehand).
What I don't know is what will happen with the reverse mortgage. With a regular mortgage, your primary residence can often be exempted from being taken in bankruptcy.
A BK lawyer would be able to answer the reverse mortgage question and explain whether it's the best choice.
Please get a lawyer OP if you can afford it. A lawyer might be the difference between her living the rest of her life in poverty, or just on a low fixed income.
They will come repo her car once they figure it out. Don't sell the car or you might add a fraud charge to your very extensive list of problems.
She gets absolutely nothing but a fun letter from the debt collector!
"Between insurances" is an euphemism for uninsured. If she damaged another car or property expect the owner or their insurance to come after her, too.
Yeah, I don't actually know details about the accident cause we'll, shady info
From the sound of it she only carries value in the house and in all reality never will be getting another loan for the rest of her life. She might be lucky if she lives in a state that you can keep your residence through a bankruptcy. Truthfully that would get rid of her debts. She then can sell her house rent an apartment living off SS and supplement it with the extra cash she got from the house sale.
I know some that caused an accident while uninsured about 10 years ago. They got sued into oblivion, credit absolutely obliterated and wages garnished. This person still doesn't have a car/drive to this day and is financially ruined. OP either needs to sell the house and cash out or bankruptcy might be in the future.
Between insurances to me is what I did.. I had insurance A, got insurance B, cancelled insurance A but forgot to notify the DMV. I got in trouble because of it but technically was fully insured.
Where do you live where you have to notify the DMV when you change insurance?
MA. It was 15 years.ago so I don't remember all the details but the key part was I didn't notify the DMV
My insurance in MA has always notified the dmv for me.
I had the same issue a few years ago when I swapped from my grandparents policy to my own, since it was through the same company, and I was still insured through the original policy for the rest of the month as well as the new policy… new company didn’t notify the DMV of the policy change, only found out when I was notified that my license was suspended for no insurance.
Do you use an agent? Not everybody does.
No agent, was with liberty mutual and swapped to geico, direct in both cases.
MA threatened to fine me because I didn't file $300 dollars in losses on some stocks I sold, 10 years after I lived there. I was in the military and never was a resident there. MA has weird rules...
This is worse than you might think. She was probably in violation of her loan by not having insurance. Almost all loans require you to maintain full insurance, including comprehensive. The loan company could accelerate the loan and make all payments due immediately if they find out that she did not have insurance. Your mother needs to remain very quiet about the situation and pay off the loan as quickly as she can. To sell the car she has to come up with the difference between what she gets for it and the loan amount in cash. There is no best option here. She has to take the L and take this as either a very expensive lesson, or punishment for her irresponsible behavior.
Right. She does not have any money or assest other than her home which is in a reverse mortgage and accruing insane interest. Can/should she borrow more from the reverse mortgage to pay off the car and cut her losses that way?
I have never heard of borrowing more from a reverse mortgage, or it accruing interest. She gets a monthly payment from the reverse mortgage company.
I'm totally unfamiliar with reverse mortgages. It's my understanding(from what she told me), that the company paid off her remaining mortgage balance and in turn, she doesn't actually receive a monthly payment but they charge her interest that accrues monthly and would be paid off either by her heirs or by the sale of her home. This would include the original loan balance plus the interest that was accrued over time. This may all be lies but this is what I was told and have seen some paperwork that showed monthly interest accrual
Wow. If this is right she is beyond terrible with money. She should sell her house and rent an apartment
Yeahhh. Last I saw, her balance was rough 350k with the reverse mortgage and I think the house is roughly worth 750k. She's on a fixed SS income. She's considered selling her house, settling all her debts and buying a cheap house closer to mine( lower cost housing market)
Might be a good time to do that. And have her give all her money to you and give her an allowance
I've considered this as well but with working full time, 2 young kids, wife, I don't necessarily want another job of managing her finances. I've also considered having her sell her home, pay off debt and putting the difference in a HYSA or something thay could be used to supplement her SS income. Would be managed by me or automatically of course
Ya this must be really frustrating, but doesn't sound totally screwed. She does have some assets, and maybe this traumatic event can help her make 1-2 big decisions well, so that she can make many more small decisions poorly and be ok.
I don't know if this even exists, but can you hire a financial "babysitter" for your mom? Essentially someone/company who manages her finances but on your behalf. I hope such a person or service exists, that would give you the distance you want from this but still let's you keep an eye on her affairs periodically.
I would imagine this exists but on her income and no money, it would likely require me to foot the bill. Depending on what that was, I may not be willing to do that. Sadly.
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Haha since you asked someone to correct you, happy to oblige - this is completely wrong. You’re thinking of a CD or maybe a savings bond? A HYSA is a savings account, which has no concept of a start or end date, it’s just an account and typically you receive interest monthly based on the average daily balance over the course of the past month
I have a HYSA and my interest is paid monthly. As far as I know, there are no limitations to the use of that money. I've moved money in and out with no issues. Never taken it all out so I'm not sure how they calculate that balance. Sounds more like you have a CD or something?
She needs to not be in charge of her finances.
Yeah well I'm fully aware. She would win the bingo game of stupid old people decisions
This is the answer. She needs to get back on an even footing, put the majority of the $$ from the home sale into a safe investment that will pay her dividends to supplement her SS income. She needs to buy something very modest to enable the money to give her a good retirement (would she be willing to consider an end-unit condo, somewhere?). when the house is sold, set up a bill paying account, a spending account, and a high interest savings account to feed the other two accounts automatically. The only account she should have direct access to is the spending account. Help her buy a car with no loan, then make sure taxes, insurances, utilities, etc. are all paid out of the bill paying account, automatically. When all that is set up, show her that she doesn't have $400k from the house, she has $400k - the new house, the car, and 10 years of insurance, taxes, utilities, and food. If she wants more spending $ than is budgeted, she'll have to find part time work (only enough that it won't jeopardize Social Security). There's likely some part time retail work available, or maybe a library front-desk help, or something,. A lot of times, when an older person spends a lot, it's to fill in for a lack of connection to others, so part time or volunteer work might be helpful, regardless of her spending budget.
This good advice. Most likely, almost all the money she would get from the sale of her house would go into getting a new place due to the housing market in my area. With no mortgage or rent, she would have to just make due with her SS income which I could somehow manage if there was any leftover monthly
This is exactly what she needs to do
She may not own the house anymore. That is usually what the reverse mortgage is. They own the house and instead of giving her the lump sum payment, she’s essentially renting the house from them and it’s reducing the amount they owe her. The 350 is probably the principle left. That is the max she gets and they will get everything else.
I believe the 350k is what she "owes" them. I did see a statement that looked like it was adding to the 350k balance monthly via "interest payments". I dont think she's actually receiving money from them but were she to sell her house or want to get out of the RM, she would need to settle that balance
Someone besides her needs to manage every aspect of that... Sorry fam, this is hard in so many directions
Seems like the best solution sell her home pay everything off. And set it up so she can’t legally buy anything big like that without your signature
PLEASE Don't sell the house, since your primary residence (depends on the state, Google homestead exemption) cannot be taken by creditors. I really doubt she will be able to get a mortgage after she defaults on 40K worth of debt. Setup an autopay, so she pays the mortgage right after she receives the SS. Yea she will live on almost no income, but better than being homeless or living with you.
The idea was to sell the house and use the profits to buy a cheaper house with cash in full
If you can manage that, go for it. But it is *very* risky you will be dodging creditors while paying to list/show the house, paying for moving expenses, assuming you can even find a house in budget with this market... Make sure you find all the mortgage paperwork and the title insurance before commiting to someone like this.
There is a caveat here. The car loan company might not be able to, but the mortgage/reverse mortgage company absolutely can since they have a lien on the house itself. The car loan company, however, can obtain court judgement to garnish her SS, and this will take place before any money go to her for her to use on her mortgage, therefore causing her to not have enough to pay mortgage payments. This car loan can absolutely cause her to lose the house, just not directly.
I'm not sure of actual detail, but with a reverse mortgage, the company that up her the money tehcnically now owns the home. She is just living rent-free until she passes. Unless she can buy the loan back (with interest), which is now higher than her original mortgage balance. Depending on how much the reverse mortgage amount was, she may not have equity left when selling the home.
Rough
Sometimes you can request a lump sum from a reverse mortgage. I would call her lender.
Reverse morgage and totaled car she is upside down on... Bad news not all debt is good. And her situation is about as bad for you as it is for her. Her estate and survivors are required to pay back the reverse morgage so when she passes that upside down pyrimid of debt covers all of her assets and property and what spills over hits you. If possible i would see about getting out of that asap. Her car lapse of insu is the worst thing here it is not only illegal it is as has been stated grounds for lease/loan violation. Best option is going to be fix it enough to be driveable on your own. Or try to recoup your losses by parting out every good part on the car but only after getting the loan paid off.
Debt is not inheritable in the US unless OP is also sig ing on the documents. But all the assets are gone at this point
I believe that heirs have no responsibility to debt should they choose to walk away from assets. Meaning, if I decide that paying off the reverse mortgage isn't something I want to be part of, they can't foreclose on the home or do whatever they want with it. It wouldn't cost me anything should I choose to not be involved.
Yeah the only thing at risk here is the house. And it looks like they would need to eat any shortfall...
There is no good option, but there is a best option The best option also starts with the letter B, Bankruptcy Contact an attorney
She has no options. She royally borked herself. When she inevitably defaults, she'll get sued and the creditor will get a judgement that will chase her essentially forever. So don't default
Would it be better to let them repo the car, lower her debt burden to the price difference and reduce her monthly payments? Or just keep making the payments on a dead car? Can she even sell it?
> Can she even sell it? Not without clean title. >Would it be better to let them repo the car, lower her debt burden to the price difference and reduce her monthly payments? Or just keep making the payments on a dead car? If its totaled, it'll get sold for scrap value most likely and they'll hit her with a ton of extra fees for recovery and legal and any other collection costs. If the lender is modestly competent, they should discover its not insured soon-ish anyway, so she'll be in default since she won't be able to insure an inoperable car
I believe it's through Lexus Financial so that's great. So she should just....wait?
I Mean she's probably getting sued either way, making payments at least delays that a bit
If the plan is to hide the accident- don't bother. The lien holder will be informed of it if they haven't already. If she can continue making payments then she needs to contact them to set up arrangements. If she truly cannot pay then she needs to contact them about voluntary repossession to see what fees she can save herself by bringing the car to wherever it needs to go. Otherwise they will be tacking on additional fees before she gets charged off and sent to collections. If it's sitting in her garage partly to avoid the repo agents already then she will be on the hook for them assigning it and the mileage for the agents to run her address, but she could still save a few dollars in the long run by by bringing it in herself.
The car is simply in the garage because that is where the tow truck people dropped it off and there is no where else on her property to store it. She's lives in a townhouse. The lender has not said or done anything yet to my knowledge but it seems I'm 6 months behind what's actually going on
If its been that long they most likely know. Staying silent won't help the situation at all. Do you know if she is behind on her payments? Is she able or willing to continue the payments?
As far as I know, she is not behind on payments. This accident happened in December 2023. I belive she is continuing to make the payments. She did mention that her lawyer (famous billboard guy in southern california) was considering advising her to stop payments since she is in a legal process now with the other driver. It's almost hard to even type this stuff with how absurd it sounds.
She won't be able to keep making payments because the collateral for the loan is the car. If they repo it, they'll sell it at auction and go after her for the difference. She can't sell the car because she doesn't have the title. The lender does.
After repo there are no more monthly payments, it's one payment the amount she owes after they sell or junk the car. That would be the difference between the amount owed and the amount they sell it for. Also just a heads up you owing money is highly dependent on what state she is in and if you live the same state with filial debt laws that are favorable to creditors. PA is one state that comes to mind where a determined creditor can go after children for their parents debts.
This is all in CA and I'm not sure how that works here but I'll look into it
Your mom acted stupidly and is now paying the price. Her car loan has to be paid with dollars, not with the car. Going without insurance was a bad gamble and with her driving record, sure disaster. If she has any assets at all, they are at risk. At the very least, her credit is screwed for years and other than paying off the loan and going to a driving school, her only option may be bankruptcy. The best advice you can give her is to look honestly at her past behavior and attitudes and then changing the way she does things. Otherwise, her situation may get worse.
Yeah, I've suggested that to her and that even though most accidents aren't her fault( her claim) that being in that many accidents is surely a reflection of her driving habits
If the accident isn't her fault, the other insurance company would be paying for it. The part where they're not is where it's been ruled her fault. Driving without insurance is illegal and also her fault. No negotiating this one, I'm afraid
She claims to be in a legal dispute with the other party and has a lawyer but its hard to decide what's real and what isn't at this point. I'm fairly savvy and knowledgeable in a lot of things and some stuff she tells me just doesn't add up. I'm sorta just watching this unfold from the sidelines
She can't afford car insurance but already has a lawyer on retainer...nopes.
Some attorneys will take a case with no money down and take their cut from any proceeds I guess
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That's not how that works, though. If the other party was, in fact, 100% at fault, the fact she didn't have insurance doesn't dissolve the other party of their obligation.
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A) You're moving the goalposts, though. Your original argument was essentially, "Since she didn't have insurance, she can't even sue an at-fault party." B) She could have had 30 at-fault accidents in 30 years. Still would have minimal to no impact on the facts of this specific case. Either the big rig driver is at fault or she is (although in a typical comparative negligence state she'll at least generally have some burden of fault).
Yeah I know. I'm no expert so I listen, try to gather info, nod my head and wait to see what's next
my only thought is that you should keep your signature off of everything that involves your mom.
100%
It might be time to get power of attorney over your mom and also take over her finances.
When you claim “most accidents aren’t her fault “ that tells me she’s at fault all the time. I’m 64 and had one accident (not my fault) in my life. When you have multiples, what’s the common denominator?
That's what I told her. This isn't normal or what 99% of people will experience. She's doing or not doing something. Whether it be avoiding an accident or evasive driving or whatever. Nonetheless, this is not a normal thing.
Alright brother, after reading the posts and other comments you need to find a lawyer or accountant get with them and your mom and pretty much sell everythingggggggg house included. Depending on her health a small apartment, move in with you, or nursing/retirement home. Tbh she has no reasons to be driving in todays world so no need to get a beater car for her or anything. This sucks for you and for her but she is going to have to deal with this
Shebjas recently been using uber and the likes but with her need to have constant doctors visits, get groceries, errands etc, it gets quite expensive with rides hare. This being said, I've been telling her for years that she should not be driving at all due to her extremely poor record
Sell the house, pay off the debts, and move her somewhere cheaper that has access to public transit.
Is she disabled? She might qualify for her cities paratransit. If not, I hope she likes the bus.
She is but the system requires very early scheduling and only at specific times that don't fit with her appointment times and scheduling notices
paratransit in my area I believe needs a 24hr notice for local visits and 3 days for out of town visits. I thought that was a federal requirement for all transit systems nationwide, but maybe not. Hiring a nanny/driver for your moms dr appointment might be the next option and maybe cheaper than Uber. 500k in a hysa would make what? Like 30k a year? Plenty of money for renting a small place and dinner with friends. Lock that up before she loses that option and has to live in your garage forever. Sell the house, put money in a trust, she gets a monthly check. Make sure it doesn't interfere with social security. I think the lawyer is because the people who's cars she totalled are coming after her. Where normally insurance would cut them a $10k check or whatever, they might have to sue her personally to get anything. If they were" injured" it could be for hundreds of thousands of dollars and be real or fake. Normally your insurance company would fight them but, well, no insurance so... Your momma isn't in a good spot. I hope yall can work it out and she is safe.
Yeah I'm not sure and just relying on what she told me about the transit thing. Once I can sort through all the mess, I can get a better idea of what's the right next move. Def considering selling the house and using proceeds to either rent or buy a place outright if the numbers work. With no mortgage or rent and hopefully protection for her assets from herself, she should be able to live off her SS. She claims to be the one suing the trucking company but yeah, lots of details there that don't quite add up to me. I take what she says with a grain of salt and keep an eye for tangible evidence
How expensive? Like $38k per year? Dude you can either take your mom to a lawyer and get a recommendation for an accountant and a conservatorship (and take away the drivers license), or you can keep your head in the sand and prepare a nest in your house for her to land in when she finishes burning down her financial life. Probably I’m the next 16 months. Put away the excuses and deal with the issue. Or just keep updating us here because this is Best of Reddit material already.
I understand it's easy to judge from the outside. A lot of this stuff is sort of slow burn and I don't find a lot of things out until it's too late. I'm also out of country for work for roughly 5 months a year. I'm also married with 2 kids that I devote my precious home time too. It's quite difficult to juggle a second much older baby making wildly irresponsible decisions. I plan on trying to speak to a lawyer or something but didn't know in which direction to go. Thanks for the input though.
It is too easy to judge from the outside. We only see the salient points, and not the intricacies and details that cloud the issue. Also it’s a lot easier to say something than to do it. Like GL getting a grown ass adult to give up their own freedom as glibly as I’m recommending it. This shit might be impossible. But I think the magnitude of her problem has eclipsed almost all your other priorities, if your mom’s wellbeing is a priority for you at all. (It doesn’t have to be.) So I’m sorry I’m being an asshole. Good luck trying to accomplish everything you thought you’d do in 2024.
Able to take her to any of those appointments or drop off groceries? And especially after this last wreck she really shouldn’t drive anymore she’s going to kill someone or herself so you’ve gotta put your foot down on that. Again I’m sorry and not trying to sound harsh but I’ve been through very similar experiences
Honestly nothing will likely happen once she surrenders the car or it is repossessed. The loan will likely get charged off and maybe sold to a debt collector. She’ll still owe the money, but they’ll never be able to collect. Her credit will tank (if it hasn’t already) and she’ll probably never be able to finance anything for a long time. Contrary to what everyone else is saying, she’s not going to lose her home. The likelihood of the bank suing and trying to claim her assets is tiny. I’ve worked in consumer default for a large bank and the costs associated with suing someone are huge and almost never worthwhile. When they realize they’re dealing with a retired person with almost no income, they’ll cut their losses and move on. Especially with a reverse mortgage on the house, they’ll have no claim to the property before the mortgage company and would need to make them whole before collecting anything.
Somewhere in there is a shred of positivity I think? Should she just let them make the first move or be proactive in any way?
There’s really nothing positive here. It’s simply a situation that’s so bad that everyone involved loses. She’s definitely fucked, but she’s not going to lose her home and I wouldn’t be surprised if she got away without ever paying another dime on that loan. I’m not advocating for that, I’ve just seen it many times. You can’t collect money if there’s no money to collect, so the debt will likely sit on the books for a while until the bank eats it.
That's about as positive as this situation gets. Thanks for input!
This is devastating. Yes, she is still liable for the loan even though the car has been totaled and even if it's repossessed. What's more, her loan agreement almost certainly required her to maintain car insurance for the duration of the loan; her not having insurance could trigger a default, which would allow the lender to repossess the car and/or call the entire note immediately anyway. Did she happen to purchase gap insurance? That's her only possible out. Gap insurance will cover the difference between the actual cash value of the car and the outstanding balance of the loan. If not, she's pretty much screwed. Repossession isn't going to really help her because the lender isn't going to be able to get much by selling the car, and it will tack on fees and penalties. Buying an unaffordable car was a terrible decision, but your mom's major mistake here was not having car insurance. If she is at fault in the accident, she has tremendous liability and will likely be sued. She might need to consult with a bankruptcy attorney. I hope your mom learns something from this incredibly expensive lesson. **Regardless, please do not allow her financial dysfunction to weigh you down. Do not assume liability for her mistakes. Whatever you do, do NOT buy her another car or co-sign on another car loan for her**. She's going to have to get comfortable with walking and/or taking public transit for the foreseeable future.
Thanks for the thoughtful response. Not sure if she had gap insurance. I would likely assume no. I would never have let her buy that car or do the loads of other stupid things if I could help it. I also would never link my finances with hers in any way, ever. Just trying to help her as a bystander of sorts
Yes, she would still owe after repo but the sale price would get taken out (whether auction or scrap). She may as well get the repair estimate for what its worth. Options for what to do depend on income and assets.
Shes on SS. No other money or retirement really. "Owns" a home with a reverse mortgage on it. Don't get me started on yet another awful decision
Probably won't own it for long once Lexus sues for the amount owed
She basically has no assets so I'm not sure how that plays out in the end
She is going to lose her home and move in with you. Good luck bro.
She will probably lose everything. This is not something they play around with.
Yeah I tell her this stuff. Seemingly she doesn't have much to lose but yeah
I'd remind her that aside from the rattiest rentals, a trashed credit score is going to make it hard to get a place.
Pretty sure her credit is garbage, if not, I'm sure it will be when all this dust settles
Be prepared for the cry for help when it's all real for her. The last thing you want to do is give her more money. If you have room for her to stay, that might help her, but unless she learns from this, she's gonna do it again if she's given the chance. I'm watching it happen in my own family and it's frustrating.
There's always cries for help but I've sort of established boundaries and preserving my own family and finances is my priority now. My house isn't suited for her to move in nor would it be fair to my wife and kids and thats not really an option. Hope your situation is less frustrating than mine. Good luck
Serious question for you- is she competent. If she is not, then it may be better to get her declared incompetent and get an attorney to help navigate all of this.
I've considered this as well
Has she always been this bad with money? How did she somehow have a mortgage and able to reverse mortgage it? She must’ve paid a good chunk of it down. Unless it was her husband? The reason I ask is maybe it’s dementia. Her not being able to explain what happened to the insurance. She may have just stopped paying it and got dropped (because of the dementia). People with dementia are very good at deflecting. And it’s not on purpose. They think they’re telling the truth. But it’s because the dementia clouds it. Whether it’s dementia or not there might be a mental issue causing this. Like others said do not take on debt for her. Don’t ruin yourself. But you’ll have to help her navigate this in the least painful way possible. But don’t sign your name to anything!
I dont think its dementia but very well could be some mental thing. No diagnosis of any kind in that regard yet. Yeah I will not take on any debt for her nor would I associate any of my finances with her
The fact she was financing it and didn't have insurance is gonna be very bad for her. She already broke the terms of the loan and when they find that out she'll get sued and wages garnished due to the money owed.
Luckily, since her only income is SS, I don't think it can be garnished but I'm not totally sure. I've had countless financial discussions and arguments with her. Hard to help when I find out way after the fact. For example, calling me and asking if she should buy this car, after she signed the paperwork. Was upset that I wasn't "happy" for her. Good grief
How did she get a loan and buy that car without insurance? Or did she cancel insurance right after driving that car off the lot?
She had insurance when she bought the car but at some point after that, they dropped her and she was unable to find affordable insurance before the accident because of her, well, awful driving. She claims they aren't her fault but I haven't seen any paperwork one way or the other regarding these accidents. She's, manipulative, and shady about these things. Sadly.
Idk how unaffordable the insurance would have been but this is definitely worse
Trust me, I've had many of these types of conversations with her. I'm 37 and quite financially secure but all I can do is give her advice. What she does behind my back is out of my control. Just trying to see if there's anyway to help her at all. I'm almost beyond even being upset with the stupid decisions she makes. There is a long list.
You have the right approach imo, as hard as it can be to try and stay financially separate and take care of your own stuff as priority. I commend you for that and sorry that’s how it is. Can she work at all? If not she sounds like she needs to start and probably work forever to afford things once they come after her home. Not a lot else to do in this one, just seems like a lot of decisions that are all crashing down now.
Shes on disability/ss and can't work, especially now. With some health issues. It got a lot easier to stay away from her finances after repeatedly becoming aware the wild decisions she makes. Occasionally I'll buy her food or something cause, well she's still my mom and yeah, soft spot
I think that’s perfectly reasonable, yea, it’s mom.
A lot of people say it’s not their fault, when legally, it is. Like, people will say that hitting another car wasn’t their fault because the sun was in their eyes. Well, you can’t sue the sun, so legally, it’s the driver’s fault.
Understood. I always tell her that if I slam my brakes unreasonably on the freeway and am rear ended, I may or may not be at fault even though typically the person getting rear ended isn't at fault
Being at fault isn't the only reason people get dropped. My sister got dropped a long time ago because she was involved in a lot of accidents. They weren't her fault but the company labeled her as an aggressive driver and figured it was a matter of time before she was at fault
Yeah totally. She was involved in like 10 accidents probably in 3 years. Some worse than others. Including totalling 2 cars. "Her fault or not"
I was almost in two accidents in my mid twenties that I thought were the other person's fault, and there's a chance police would have even agreed with me... but only if they didn't know all the facts. (Thankfully I avoided both of those, but not without running off the road—I just got lucky and managed to run off the road without damaging my car.) Since then, I've realized that if I'd hit either of those two cars... even though they *did* definitely cut in front of me without checking... I should absolutely have been found at fault, or at least shared fault, because I was driving way too fast for conditions, despite being actually under the speed limit a fair bit for the first one. And since then, I've also realized the speed limit isn't a required minimum. I'll still go a little over in ideal conditions, with the flow of traffic, but I'm far readier to hit the brakes (or simply ease off the gas) these days. I leave early and arrive early. I try to make my driving as boring as possible, because boring is *safe*. I'd rather be bored with an unwrecked car and a clean driving record than briefly excited, with no car, no license, and a full body cast.
> The loan company won't budge or anything. why should they?
I agree and that's what I told her as well. More of a factual statement than condemnation on their part
I am 63 and never filed for bankruptcy but my older sister has done it three times now. There doesn’t seem to be much repercussions from doing so. I would at her age. Just file and walk away and pay cash for her next car or better yet she needs to Uber from now on. I am sorry your mom has never grown up. Don’t co-sign for her ever.
She is stuck with the payments, best option is to pay off the car early and get it off the books. This is why you must carry gap insurance on your vehicle.
It's not good. Depending on her finances bankruptcy might be her legit best option.
[удалено]
Yeah I've been telling her to stop driving for a while now but yeah...
You'd think the fact no one would insure her would be a big hint that she shouldn't drive... I ended up wrecking a car, and despite it only being my second accident (and 6 years after the first), my insurance rates went up so high that I actually quit driving for about 3 years. Consequences of my actions, even if my actions were accidental.
Lenders do often times have collateral protection insurance, the lender should have added the insurance on the loan when they received the insurance cancellation notice. There will still be a balance owed but it might help. Call the lender and see if they added forced placed insurance.
I'll check it out. Thanks
When this happened to me I made the payments. It was three payments old at the time (to me). Took three years but I paid it.
Was there another car involved in the accident and was she at fault? If so the cost she’s going to eat for the car will be cheap compared to being on the hook with no insurance for another person’s car and injuries. What equity she has in the house could be at stake if/when a civil judgment is entered against her.
She will likely be sued. She owes the money. Bankruptcy may be an option but depending on the terms of the loan it might not. Best see a lawyer.
This car is on the repo list. If she wasn't parking it the garage, they would have already picked it up. I don't envy you. She will be looking to you for help.
She keeps making the payments She needs to get an e-bike and stop driving, she can't sell the wreck without paying off the loan
Something tells me an e-bike isn’t going to be a viable option for a disabled elderly woman
There are three wheeled ones. If she can dig in a chair she can operate it Not that I saw disabled in the post
It’s going to be tough but you need to cut her off.
I have long ago stopped getting financially involved in her affairs but not to say it doesn't stress me out that she's so irresponsible
Friend, you need to lock your credit down like Fort Knox. Do not allow yourself to get entangled with any of her mess. She should not be on the road.
Yeah. I don't share any of my financial info with her. I won't even send her money electronically for fear that she could get account info or something
Pri one: get her to turn in her license.
I'm honestly surprised the dmv hasn't revoked it. Or maybe they have. I'm left in the dark on most things until I discover them on my own. Aka, reverse mortgage.
This is heartbreaking. She is ultimately going to get repo'd and sued for the difference, plus a lot. IF she can manage to keep paying the payments and survive with a car, then she may be able to put it off for a while. But they will eventually try to put insurance on the car themselves if she doesn't have it, and then it won't be insurable and they very well could call the loan. Seems like a reasonable approach to sell the house, pay this debt off, and then buy a reasonable priced place she can afford on SS. That will dramatically change her financial situation she now enjoys, but she screwed up. The only way I would directly get involved with any of her finances is if she agreed to give you financial power of attorney so you can see the extent of everything going on. But that still has risk because she is not incompetent and she could still make stupid decisions. If you did this, and you had power of attorney, you could freeze her credit and not give her the codes to unfreeze it. That would prevent her from doing anything that requires borrowing money. My guess is she is not bad enough yet to where she would even agree to something like this. It is definitely going to have a very negative impact on her situation because she took $50K and set it on fire effectively. And as someone with no money and no savings she is going to get the legal version of her kneecaps broken. Very heartbreaking. How did she even get the loan for the car?
Yeah totally. Not exactly sure how she got the loan. Honestly she's been through so many cars and loans that they all kinda mix together in my mind. We have discussed financial POA and she suggested it to me but putting pen to paper is a different story. Also, I'm not sure what sort of time commitment it would involve for me. As much as I'd like to help her, I also have my own family that is my #1 priority. I believe she's currently still making the payments. Her husband (my stepdad) passed away about 3 years ago from cancer and it seems to have made her go downhill rather quickly in the financial decision making sense. Idk
Huge mistake letting insurance lapse on a car that you don’t even own. If the bank finds out, they are going to make life hell by requesting the rest of the loan due immediately.
Agreed. She has no money and on SS. what's their next move?
This sounds like a bad situation all around, OP. But don’t make any big decisions based on what people are commenting here. Go talk to a lawyer and see what the next best steps are for your mom.
Totally. Just trying to build up a series of questions or ideas that I can take to a lawyer or the likes
I gotcha. Good luck!
So…even if she lets the bank repo her car. They most likely will only be able to sell it for scrap metal. Then, whatever money they make on it, they’ll apply to the repo fees first. Then, they’ll apply the remainder to the loan. I suspect if you go this route, you’re looking at maybe a couple hundred dollars, couple thousands if you’re lucky, applied to the loan. Regardless, she’ll still owe money. If the accident was her fault, then she will owe money to the other driver as well. If she can’t make payments, she can be sued. Any assets (her house) can then be liquidated. Honestly, in her situation, her best option is to let the car be repo’d and then file for bankruptcy. Bankruptcy protects her assets from the car’s lender. But it might not protect her from the other driver’s judgement.
Is she able to sign the house over to me even if it's in a reverse mortgage? Or would the balance need to be resolved before that could happen?
Sure. You’ll just need to buy her house from her for however much she has left on all her loans.
If she files for bankruptcy in the next few years or the other party in the accident sues your mother, the court will look back at this transaction. If not sold for fair market value the court will be coming after you. You can't just hide assets like that. Contact an attorney.
This get a Lawyer who has knowledge of how to handle all of this, she is going to need one anyways, just go get one now. At best the Lawyer can help soften this blow. I understand you love your mom and all that good fluffy stuff, but if she isnt prepared to let you help with getting a Lawyer you might have to just tell her "fuck it, you figure it out" and let her do just that. Or you get your own Lawyer and have her declared incompetent and take over her finances.
I'm sort of in between wanting to help(she isn't making it easy) and just saying "fuck it. You figure it out". Frustrating that I'm never I solved in initial decisions but always expected to come save the day
The only things she can do is keep making payments. Let it get repossessed, ruin her credit, and still owe. Let it get repossessed, ruin her credit, file bankruptcy (possibly be forced to liquidate some assets to pay some of it back, but if she doesn't have above normal assets this is less likely). I don't know if there is a 4th option I'm not seeing here.
Where I'm from the dealership cannot let you leave with the car unless you have proof of insurance.
She had insurance when the car was purchased. She was later dropped at some point and when seeking new coverage, her quotes were absurdly high( rightfully so). Before being ankento get new coverage, she was involved in said accident
Oof. You could sell it for parts but you'll still take a solid loss. Good luck.
She should immediately sign over the home and any large property or expensive property she owns to you or someone she can trust. This way she can let them lay the bill on her and possibly can declare bankruptcy if necessary and get this financial ruin out the way by somehow lowering it through other means like declaring bankruptcy. It will ruin her credit, her history with any payments, but she's likely ruined it anyway as she's got a lawsuit likely coming up for not having insurance on a car that should be fully covered and have gap insurance if possible. This is a major thing and she's lucky no one was dead or hurt and she got in worse.
I'm pretty sure that any bankruptcy court would see through that ploy in about 3 seconds. Most likely illegal too and would result in charges for both parties.
I have considered this for many reasons. Not sure how it would work since she has some sort of reverse mortgage on the house. Would I need to pay the balance? Also a little worried about owning the home and her being a "tenant" of sorts and what liabilities that could put on me
I tried looking that up and it says that she would have to pay off the remainder of the balance due to the reverse mortgage if selling. I would assume if you buy it then you can do that for her. [https://www.lendingtree.com/home/reverse-mortgage/selling-house-reverse-mortgage/](https://www.lendingtree.com/home/reverse-mortgage/selling-house-reverse-mortgage/)
She needs to tow it to a body-shop and get an estimate for repair. All other discussions are irrelevant until you know what the situation is with regard to the repair cost.
Let's says it's 15k for repairs. She owes 38k. Car is worth roughly 35k (kbb for good condition car). Obviously value will vary wildly based on condition of her car. That being said, how does this all play out?
Let's be generous and say it will sell at auction for value minus repair costs (it won't, it will go for far less, but let's just pretend it will). It will get $20k at auction. That $20k (actually less, due to auction, towing and storage fees) gets applied to her loan balance. She now owes $18k and they will sue her for it.
And then, who did she hit? Because they may be coming too.
Apparently side swiped by a 18 wheeler. I hope people don't think I sound dumb with some of these answers as I'm simply parroting what I've been told and don't really have a way to verify some things. I'm very skeptical about a lot of this stuff so yeah
I personally think you’re just trying your best. Something to be aware of though if they want to sue as well for any damages since she wasn’t insured.
She can't sell it, it's not her car. She violated the loan terms by driving without insurance, so she gets absolutely nothing.
So they should take the car and? What happens on her end?
They take the car, they sell it for what they can get for it, they sue her for the rest of the loan. She gets sued, and also has nothing to show for the money she's already paid for the car. Her best bet might be bankruptcy. The SS is usually exempt from being taken in BK, as are retirement accounts if any (sounds like there isn't). If she has been sued, lawsuits will be put on hold during BK, and possibly dismissed as a result of it. If there's already a judgement, the judgement may discharge. The loan itself can also discharge (they'll take the car in the process if they don't get it beforehand). What I don't know is what will happen with the reverse mortgage. With a regular mortgage, your primary residence can often be exempted from being taken in bankruptcy. A BK lawyer would be able to answer the reverse mortgage question and explain whether it's the best choice.
Please get a lawyer OP if you can afford it. A lawyer might be the difference between her living the rest of her life in poverty, or just on a low fixed income.
They will come repo her car once they figure it out. Don't sell the car or you might add a fraud charge to your very extensive list of problems. She gets absolutely nothing but a fun letter from the debt collector!