Hi Reddit,
I’m recently married and my husband and I do kinda well for ourselves. We help out my family a lot financially (mostly from my income- we have shared account for bills and separate for discretionary). What’s worrying me though is we need to buckle down on our finances and I can’t keep supporting my family but I don’t know how to get out of it. Is there any way they can ever become self sufficient and able to retire?
Parents info: Self employed- the business makes money but they’re drowning in debt (mostly pay day loans because they both have horrible credit) so all the profits mostly go into these loans that are automatic deducted daily. These should be paid off in three months leaving more free cash flow:
Other debts: $25,000 to friends $16,000 to irs in sales tax (which they don’t have) $180,000 on their mortgage (for a house that cost $210,000 and is now worth maybe 100k. It’s falling apart and would need a complete remodel to ever be sellable. We’re considering a short sale. Their current mortgage is $1,650. $30,000 worth of rent to restaurant landlord but the space isn’t in a super desirable area for restaurants so the landlord is not mentioned it as long as rent is not missed again (and it hasn’t been an issue in a year thankfully) Maybe 4K in combined credit card debt.
Their cars are paid off, so other expenses include: $250 insurances Phones/WiFi/Netflix, Hulu- 150 No real grocery bill as they own a restaurant and generally eat all their meals there since they both work daily.
They have zero savings. Zero as in my mom maybe has $200. My husband and I have supported my parents and step sister over the years and it just needs to stop but I have no clue how.
If they work part time the restaurant can’t really function- and what they would pay in salary / lose in tips (my mom serves) would be comparable to work they would be able to get since they aren’t very skilled (mom has English degree, step dad is an ex cop). We’re going on vacation soon that was gifted to my parents (my husband and I are paying our own way) so I don’t want to mention anything until post- vacation (it’s their first vacation in 10 years. It’s a big deal and don’t want to spoil it) so I have about 3 weeks to give them a comprehensive plan.
Specific questions:
1.) What exactly is a short sale and how does it work? Or any options regarding the house. 2.) About $4,000 month will be freed in 3 months after the day loans are done with- it’s been a long time coming. Where should this money go first? 3.) I’m probably going to pay the owed sales tax since it can result in jail time or their business being closed (they don’t put it aside as they should- don’t ask me why). 4.) How can they ever save with all this debt? Is bankruptcy an option? The only “real” debt is the house- money owed to friends is verbal (of course should be paid back) and the money owed to the landlord is negotiable.
Working part time really isn’t an option- both work from 11 am - 9pm 7 days a week so this is what we have to work with for now.
They already cut down on a ton of expenses, including changing POS systems that take way lower percentage so that should help. Any other ideas would be great- they really are simple people. They don’t travel, shop, etc so any unexpected areas to save would be great.
I should edit: step dad is an ex cop from a different country so no state / gov benefits apply. Moms degree is also from a foreign country.
Edit: Their mortgage also missed so many payments, so many fees, interest etc that they’ve been paying for 10 years and only touched 30k. So I find the mortgage worthless at this point but they are saying renting is a waste of money and hat if they give up on this mortgage they’ll never own again due to bad credit, no cash + age.
Edit 2: Restaurant has steadily increased in revenue about 20k a year for 4 years now, roughly makes around 300k gross. We’ve had it for 7 years- they first 3 years is where they accumulated most of the debt + missed mortgage, missed rent, etc. Before that they owned a different business they closed.
Submitted January 21, 2018 at 07:19PM by lividbridewow http://ift.tt/2mZtM9I
