Helping Parents in Debt. or Not?

ednamekin on 14/08/2019 - 14:24
Last edited 16/08/2019 - 21:45

Getting on the back of this post, as I'm watching something similar happen to my own family:
https://www.ozbargain.com.au/node/476489

Sorry in advance if the information seems all over the place, but I'll do my best.

Question: What are my options on sorting out unemployed / in debt parents?

Situation: Asian background (so there's a cultural tradition of looking after parents). I live with my wife in a house, parents live with me, and so does brother. Mother's a housewife, father unemployed last 3 years. I find out a couple weeks back that the parents have almost nothing to their name, and a whopping $40k in debt spread across a personal loan and 3 credit cards (interest between 12 to 20%). They used to pay me rent, but stopped 1.5 years ago. Brother doesn't pay rent, but he's giving around $500/month to parents to stay on top of their minimum repayments. I've made them cut a few stupid expenses (like a cleaner and Foxtel ugh), and fixed expenses are down to around 500/mo if any rent owed to me is excluded.

I have some savings, but looking at their capacity to repay, anything I give them would not be returned, hell there's 1.5 years of rent to pay first. Also I'm not sure if I am liable for any of their debt as their child, maybe they should just go bankrupt and be managed by a trustee.

Options I have thought of:

  • Purchase their furniture (they own 60% of the house furniture, if I take it off them they can use the funds towards debt, and I also control the furniture)
  • Give them money to get out of debt (lost money, puts myself in worse position)
  • Seek ways to evict them (I've only seen articles on parents evicting their kids, not the other way round)
  • Power of Attorney over all their finances?
  • Set up a formal loan agreement with them where I act as the debt consolidation loan provider (don't know how much this will hold up)
  • Bikies (not a nice one, may damage the house)

Edit: added a poll, removed eviction as that was a stupid thing to even include (and the list isn't exhaustive anyway).

Edit2: Thank you for the poll votes, and detailed commentary and assistance. Have a rough plan going forward, have spoken to brother and he's good with it, now to take on the parents over the weekend.

Poll Options

  • 15
    Purchase their furniture so they can use funds towards debt
  • 27
    Give them money to get out of debt
  • 173
    Get them to declare bankruptcy
  • 5
    Power of Attorney over all their finances
  • 1
    Set up a formal loan agreement with them where I act as the debt consolidation loan provider
  • 25
    Bikies
Financial

Comments

  • silenthillrocks on 14/08/2019 - 14:28
    +14

    Maybe add a poll?

    • ednamekin on 16/08/2019 - 21:22
      +1

      Added, thank you. Looks like the bankruptcy is the big winner.

  • pyramid on 14/08/2019 - 14:31
    +77

    I also control the furniture

    wow , never head this before that someone likes to control their parent's furniture. Really?

    hell there's 1.5 years of rent to pay first.

    Did your parents ask you for rent when you were job less or kid or young?

    TBH I find this thread terrible.

    • HighAndDry on 14/08/2019 - 14:50
      +28

      I wouldn't take the post completely at face value - I see OP as being just… out-of-their-depth as to how they can help, and the things suggested as ways to give their parents some liquidity and income but also ensuring they are (or at least can feel) self-sufficient.

    • Cave Fire on 14/08/2019 - 15:39
      +12

      Yeah I think he means buy the furniture off them, then sell it if needs be. Not restricting access to furniture lol.

    • ednamekin on 14/08/2019 - 19:11
      +13

      Sorry the control furniture came out wrong. This would allow me to own the furniture, meaning they don't end up selling it to others.

      • abuch47 on 15/08/2019 - 16:56
        +1

        Well thats your decision if you buy it off them it may cost you more than them selling it but it helps with their debt or cost you less and they still have more debt. Dont pay off debt free ever it should always be for something. like buy their cars off them, its a luxury and if you go south with debt you have an asset to selloff.

        Kicking them out cannot go well but extreme pressure on all 3 dependents to provide more. your brother pays 500 per month which is a little low, push them to get jobs.

      • st11 on 16/08/2019 - 15:59
        +6

        since you are from Asian background
        Question - Did they pay for your uni fee or its you who paid it.

        I am asking this question, because I have seen heaps of Asian parents who spent all their money on kids education, and kept nothing for old age, probably thinking that kids will take care of them in old age. They should have also thought of saving money for themselves and ask you to go and flip burgers to earn your fee.

        Disgusting it is, I pay for all expenses of my parents and I am proud of it, would rather die poor than ashamed.

        • ednamekin on 16/08/2019 - 21:24
          +5

          I'm paying my uni fees, and got through high school on full scholarship, but yes that doesn't detract from the fact that I was raised from birth by them.

    • SpotTheOzzie on 15/08/2019 - 10:39
      +17

      "Did your parents ask you for rent when you were job less or kid or young?

      TBH I find this thread terrible."

      I would never want to financially burden my children to support me.

      There are people out there that would have an endless supply of kids hoping in return they can be looked after in future. I only plan on having the amount of kids I can afford to begin with, if it turns out to be zero..so be it.

      • [Deactivated] on 16/08/2019 - 12:24
        +3

        This is very common for Asian living in western culture. The western environment means they can't afford their lifestyle and also having two elderly dependents.

        And parents converting their Asian wealth to here means they only have very little. If they are lucky and have pr or citizenship, they can get money from centrelink.

    • [Deactivated] on 18/08/2019 - 09:45
      +5

      Did your parents ask you for rent when you were job less or kid or young?

      Parents bring a child into the world for all sorts of reasons, a lot many of them being wrong ones, never a child has any control over being born, the parent does choose and has complete control over most of the times. It is an implicit duty of the parent to raise the child by providing a house. It is ridiculous to make OP guilty for being indebted for rent he was a kid. Now it is different because they are all adults.

  • k-rokfm on 14/08/2019 - 14:31
    +7

    -Give them money to get out of debt (lost money, puts myself in worse position)

    Do you have the cash to make them debt free?

    -Seek ways to evict them (I've only seen articles on parents evicting their kids, not the other way round)

    Why would you want to evict them? what benefit would this have to a) you and b) their repayments??

    -Power of Attorney over all their finances?

    This may help in managing their affairs but with the limited (none?) way to pay it back this would have minimal benefit?

    Do they have any ability to gain an income, anything at all? Any pensioner benefits, could they take up any level of work? I would be talking to your brother to be taking up more than their minimum payments considering he doesnt pay you any rent at all, he should have the ability to take more responsibility of it

    • ednamekin on 16/08/2019 - 21:25

      I have around $20k available, so half of the total amount. After reading the comments eviction was a stupid thing to write or even think about, there's no winner there. The Power of Attorney or similar may give a bit more control around using credit vs a bank account to pay for things, a commenter has mentioned getting a joint account which sounds good.

  • kolorijo on 14/08/2019 - 14:34
    +55

    Get rid of their credit cards first. You want to keep the debt at its current level.

    Pay their debts & get your brother to pay rent (or at least the $500/month to you).

    Someone need to step in and take control of the situation - this would be you.

    Also, think of other 'luxuries' that could be trimmed.

    • gyrex on 15/08/2019 - 08:48
      +12

      This is by far the best suggestion. It sounds like your parents are fiscally irresponsible and do not have a clear understanding of their dire situation; and throwing more money into their cause may well be just throwing it into an abyss. You're not legally responsible for any of their debt if they do enter bankruptcy proceedings. The important thing to do at this stage is to limit the debt growing - especially their credit card debt which, with compounding, will be their most potent issue.

      I'd talk to them about the options you've laid out but assuming that they're old and have no immediate prospect of purchasing a home, I'd suggest that bankruptcy might be the best course of action and will definitely take the pressure off them and everyone else in the family. Also, because bankruptcy is managed by a third party, it will limit any potential for feuds within the family.

    • ednamekin on 15/08/2019 - 10:49

      Thank you, this also sounds like the best way.

      • kolorijo on 15/08/2019 - 14:33
        +1

        You are welcome. I don't know the mechanics of declaring bankruptcy hence I didn't mention it above. It might be something that you want to investigate and see if it could help with your situation.

        Good luck ednamekin, you are a good/responsible son/daughter. Kudos to you.

      • Mr Ayayay on 15/08/2019 - 18:51
        +1

        If you are paying it off then make a 'debt reduction offer. That is, offer what you can as full and final settlement of the debt despite it being less than the amount owed. Some creditors will accept an offer like this to clear the debt'

        Info here: http://www.moneyhelp.org.au/your-debt-options/informal-negot…

      • twig on 24/08/2019 - 09:55

        Transfer debt to another location, that can buy you some extra time during an "interest free period" (if allowed)

  • [Deactivated] on 14/08/2019 - 14:37
    +4

    how long have your parents been here? why havent they got any assets? house etc

    • ednamekin on 16/08/2019 - 21:26
      +1

      History of ins and outs, and so when they do have money they tend to spend. Hoping I don't go down the same path (going good so far)

  • Soluble on 14/08/2019 - 14:40
    +9

    If they've been living with you for that long, not paying anything for 1.5 years how'd you only just work out a couple of weeks ago they have nothing to their name?

    • HighAndDry on 14/08/2019 - 14:56
      +10

      I assume he thought they had savings that they were running low on (so not paying rent), not that they literally had $0 and was living on credit cards only.

      • ednamekin on 14/08/2019 - 19:12
        +4

        Correct!

  • Amaris on 14/08/2019 - 14:45
    +40

    Did they look after you well when you were young? If so, now is your turn. Shame on you for even thinking of evicting them.

    • [Deactivated] on 14/08/2019 - 14:49
      +12

      I know right. I'd give my parents everything i have if they asked and then there is this thread. smh..

      • HighAndDry on 14/08/2019 - 14:53
        +27

        I don't think OP is seriously considering evicting them, just that he's out of ideas and not ruling anything out.

        The old quote about "Give a man a fish… teach him to fish…" etc applies here I think.

    • Taro Milk Tea on 14/08/2019 - 15:20
      +29

      Did they look after you well when you were young? If so, now is your turn.

      So you're saying parenting create future liabilities for the children? My parents always told me that I do not owe them anything - which makes me even more grateful that I'm willing to do anything for them out of love.

      I have mates telling me stories where they parent demanding them to give them money as they owe to their parents for all the money spent to raise them as a child. I found this very sad!

      • dbui8743 on 14/08/2019 - 17:11
        +12

        I am asian so it kinda goes without saying, or maybe for me at least, I feel I owe my parents. Granted that my parents really provided me with everything, above and beyond, not just means to subsist. And they are really not expecting anything back, but i do feel they have the right to expect something back if they devoted everything to you when you were young.

        Not saying that you dont have to look after your parents if they had not spent on you lol.

        • geoffs87 on 15/08/2019 - 11:22
          +10

          Why does it have to be monetary returns?

          I help my parents in many ways, but have never given them cash (and they havent given me any since i finished my 1st year of uni at 18yo). They have limited understanding of financial, technology, investing, strata etc etc. 5 years ago my parents were in $80k debt (granted they owned their home). With some support, they now are debt free, have investments, international holiday every year, bought a yacht, still own a house etc.

          Overall they're in a much better position, i help them with understanding a heap of things, and in no way would they ever expect any money from me, even when they were struggling and marriage almost broke down. To me, this is the value of your children - they should learn from your mistakes, take all knowledge and skills you can impart on them and support them to go above and beyond, in kind they should return with non-monetary support as the parents age. I think thats worth tenfold the cash they spent on your upbringing, granted i went to public school :).

          • punk000 on 18/08/2019 - 22:26

            @geoffs87: From 80k debt to getting a yacht in 5 years, that's sound financial advice. You have your own investment firm ?

      • tempura on 15/08/2019 - 11:09
        +7

        So you're saying parenting create future liabilities for the children?

        but in OP case, the parent did create future liabilities for themselves and as the son, he feels responsible to get them out of the debt; he doesn't have to, but I do understand where he's coming from, being from the same culture.

        In normal parenting world, the parent shouldn't be in debt at first place as this will create headache for their kids. Parent should be the responsible one but in nowadays world, it can go both ways.

        • Taro Milk Tea on 15/08/2019 - 11:18
          +2

          In normal parenting world, the parent shouldn't be in debt at first place as this will create headache for their kids.

          I think it's normal to be in debt e.g. having home loans etc. What's not normal is being in debt expecting the kids to repay it for them - This is more like a slavery tbh.

          • tempura on 15/08/2019 - 11:34
            +1

            @Taro Milk Tea: obviously in OP's case, it ain't mortgage rather than personal loan and credit cards. Why do that to your kids?

        • Roman Sandstorm on 15/08/2019 - 15:02
          -4

          @tempura

          I do understand where he's coming from, being from the same culture.

          To be 'culturally insensitive' to you and milions of others: a medieval 'peasant' culture, unsuited for our modern world.

          It's only two generations since most Asian cultures were having hordes of children just so they could force them to work the fields from five years of age. And thus aid the family to survive.

          That cultural mentality doesn't disappear overnight.

          It is rooted in the value of life, the philosophy of existence. Many cultures have viewed children as 'property', as assets to be exploited. Hell, some cultures still believe that, particularly with respect to their females. (And all us progressive liberal westerners get all uppity when we see women being oppressed, mutilated, uneducated, forced marriage, etc.)

          In Europe we held similar attitudes for centuries regarding children: working fields, mines, chimneysweeps (hahaha…), but modernisation, increase of wealth, etc changed things.

          In Asia, the modernisation is so new, the growth of wealth so new, that older cultural norms have not caught up with the newer lifestyles.

          To most of us reading this thread it is anathema that we would feel a real monetary obligation towards our parents. After all, they chose to have children, fully realising they would legally and morally be responsible for bringing them up.

          Unless the OP chooses to perpetuate this ancient cultural trait, it will (should?) die out with his parent's generation. But that his (and his contemporary's) choice.

          • tempura on 15/08/2019 - 15:12
            +4

            @Roman Sandstorm: OK

          • Amaris on 17/08/2019 - 10:34
            +4

            @Roman Sandstorm:

            Unless the OP chooses to perpetuate this ancient cultural trait

            Looking after our infirm, old, disabled including parents is NOT an ancient cultural trait but something which makes us human. Mammals look after their children as well as we do but they, in turn, don't look after their parents. We spend millions of dollars every year on healthcare and services to look after our elderly and sick.

            In my line of work, I see elderly who've been 'abandoned' by their children, living pathetic lives in nursing homes, not even visited for months. The children might feel good thinking they're letting the state take care of their elderly parents but believe me that is not a life to live for anyone.

            It might sound modern to you Roman Sandstorm but the 'newer lifestyle' to me sounds profoundly medieval.

          • SlavOz on 17/08/2019 - 10:38
            +3

            @Roman Sandstorm: Wow, so much for Progressive. I thought most people in Oz were supposed to be all for multiculturalism and all that?

            Yeah some cultures do suck and have deservedly died out, but Asian is not one of them. In fact there's probably nothing more tragic than when old languages and traditions die out.

            Yes, OP's parents chose to have children. They also chose to raise him well enough to where he is today. They also chose not to abandon him or abuse him like many children are forced to suffer thru these days. In return you think he should choose to abandon them because they made the stupid mistake of trusting and relying on him? I feel sorry for your parents. Someone in your family line is doing to have financial difficulties one day and I would only hope you realize the importance of helping them. Not for pride or pressure, but in ensuring your values, culture, beliefs, legacy, etc are in some way preserved when you die. The only way for that to happen is to help your family thrive.

            • The tiger on 17/08/2019 - 11:06
              +2

              @SlavOz: Hi Stav, I love what you said here. Tell you my own experience re my adult kid. She is currently a scientist with a PhD degree. I don’t claim all her bringing up is wholly due to me. But as a parent I poured out a lot and lot of love to her. Now she has her two kids. You know what ? One day she told us now she realises more the responsibility and parental worries of being a parent . And because of her own experience as a parent she understands more about love of parents to their kids . It is really horrific to say we come to this world of no choice and even think it was due to parents’ xxpleasure.We gave birth to our children as we wanted them to be with us ; to love them and to be loved ; and to travel together helping each other for poor and for rich on our life journey .

      • srr on 15/08/2019 - 19:19

        So you're saying parenting create future liabilities for the children?

        Not sure about Australia, but in other countries, for example Russia, there's a legal requirement for children to support parents in need, with an option to get alimony from their children if they don't support voluntarily.

      • Amaris on 17/08/2019 - 10:13

        @ Tempura
        Not financial liabilities but morally and emotionally you're liable, even though no good parent would demand it.

    • Caped Baldy on 14/08/2019 - 20:12

      A problem is that OP may not have funds to pay the parents debt and start a family (if that's in the pipeline). OP could pay the oldies money for child care.

    • horsome on 14/08/2019 - 22:27
      +11

      Children are the obligation of the parents that have them, not the other way around. What a poor attitude to have with judgement against the OP who needs help!

      • Blitzfx on 15/08/2019 - 10:19
        +4

        This is absolutely correct. OP has no obligation legally to back pay their parents.

        Family law in Australia defines the responsibilities that parents have in relation to bringing up their children. These include:
        to protect your child from harm
        * to provide your child with food, clothing and a place to live
        * to financially support your child
        * to provide safety, supervision and control
        * to provide medical care
        * to provide an education.

        Parents are lawfully required to do so. Any ozbargainer making such stupid claims should review this and rethink it.
        The parents shouldn't have had children if their intention was for them to support them later in life. It is unfair for a child to burden their massive irresponsible debt in today's age

    • Autonomic on 15/08/2019 - 11:49

      A child can't look after themselves. A functioning adult can.

    • coffeeinmyveins on 16/08/2019 - 14:11

      Nobody asks to be born. You don't have an obligation to "repay" something you never asked for in the first place.

      I love my parents, and I will take care of them if I need to, but the idea of it being "your turn" is ridiculous.

  • jackofspade on 14/08/2019 - 14:47
    +2

    File for bankruptcy?

  • HighAndDry on 14/08/2019 - 14:49
    +29

    Damn, sorry to hear that.

    With only the given information, and in roughly order of urgency:

    1. Consolidate their debt - if their loans and cards are with the one bank, speak to that bank. The bank would rather have regular and more certain repayment, than irregular repayments and further borrowing that might not be repaid. Have a read here:

    https://www.moneysmart.gov.au/managing-your-money/managing-d…

    1B. Along with that, cut up all their credit cards. Don't let them take on any more debt.

    1. If they haven't already, see what government benefits and welfare payments they may be eligible for. At the very least, Newstart or the Aged pension, depending on their ages. And then apply to those.

    2. Look after their mental health - especially for the elderly who're used to having a productive life and who may take a lot more seriously their responsibility and obligation to support themselves, being in this position can be a blow - so see what free courses/training might be available - that way they're occupied during the day, they can feel productive, and they're doing something which doesn't involve spending more money.

    3B. In addition to that, what skills do they have? Even if their English is bad, maybe you can help them find odd-jobs and sources of income on things like Airtasker/etc. Baby-sitting/child-care or cleaning for your mother, cleaning/outdoor/gardening/repairs for your father maybe depending on his skill-set, etc.

    1. DON'T lend them money yourself, or act as their guarantor unless you're absolutely 100% certain they won't rack up more debt - since this is unfortunately not possible, stick to just "DON'T lend them money yourself".

    Good luck.

    • rompastompa on 14/08/2019 - 15:09
      +4

      We also don't know the history.

      Did the parents do whatever they could to give OP the life they lead now? Where would OP be if the parents didn't move here? OP could have a better education, higher paying job, etc than if they didn't immigrate.

      Whatever the story is, OP, just talk to your parents/brother. It might be a combination of factors that you need to consider, not just a black and white solution.

      • TheMindsetTraveller on 14/08/2019 - 15:24
        +3

        I agree, have a good honest chat with parents about their situation.

        Don't blame - doesn't do anything good.

        Look at ways to move forward e.g get rid of bad debt if possible and educate/encourage parents to be more frugal if their financial situation (inability to work) remains the same.

        Consider getting parents onto some type of Centrelink benefit if eligible.

        If parents willing to be frugal and if you aren't in a position to get rid of bad debt, then consider defaulting on the loan and credit card. Assuming your parents having nothing in their legal title (house, car, possession etc) then they may take action towards bankruptcy but leave it to them to do.

    • Pantagonist on 15/08/2019 - 21:31

      Who hijacked HighAndDry's account?

      Encouraging people to access money from the public purse / welfare?

      No judgement about lifestyle choices nor confusion about why these people haven't just paid off the money they borrowed and earned their right to adult.

      Can't be the same person who said this;

      Lessons? Exercise financial responsibility. Don't be like these people.

      Surely?

  • prisonmike on 14/08/2019 - 14:55
    +22

    I declare Bankruptcy !!!!

  • daalinz on 14/08/2019 - 15:00
    +14

    How do your parents get income at the moment? I'm half expecting that they are on Centrelink.

    If they aren't working now and have no desire or ability to be employed, they should consider bankruptcy. 40k debt is going to take a long time to pay off in their current circumstances.

    Use your brother's $500/month as rent towards bills and mortgage.

    You shouldn't take on your parents' debt.

    • ednamekin on 16/08/2019 - 21:29
      +3

      No income at all. Both PRs, maybe it's an Asian thing but while they're not too proud to live with consumer debt, they're too proud to get on Centrelink.

      • diazepam on 16/08/2019 - 22:07
        +2

        … That's free money they're "too proud" to have?
        There's clearly half your solution.

        • BabsBBS on 17/08/2019 - 01:23

          It’s an Asian cultural thing, it’s hard to explain. My grandma would rather stay cooped up in the house for the rest of her life rather than enjoy being able to go outdoors but have people see her in a wheelchair.

          She is too proud to be seen in a wheelchair. Therefore she has spent the last 15 years inside the house. Like I said, it’s hard to explain but I’m not surprised by her actions. Even though I think she’s being silly, I know it’s an actual thing, this pride. Asian pride.

          • diazepam on 17/08/2019 - 11:39

            @BabsBBS: Understood, I'm born and raised in the same culture
            I understand the wheelchair thing, absolutely.

            However with Asians, it's often people knowing about their condition.
            The chances of someone knowing / finding out information from you from Centrelink is next to none.

            Just my opinion and I'd certainly sell it to @OP's parents that way. . Also if this was my situation, I'd probably pay out the debt (but I get maybe not everyone will be able to pay out everything) and ask / oversee them to make changes that will prevent this from happening in the future. This is the Asian culture.

            • BabsBBS on 18/08/2019 - 15:00

              @diazepam: Agree with you all the way. It would have to be a tactful way of doing it, and exactly like you said, sell it to them that nobody would know. I would however, also sit them down and say I’m going to make it all go away BUT I’m now in control of all the family finances, that’s the condition. And then explain why I think that it’s best for everyone that we do it this way. Be gentle and say you know what, I know the monetary system here better, our dollars will be stretched further if I do the things.

              And part of the agreement would be to at least consider Centrelink. They can quickly go in and get out covering their faces so nobody sees them if that’s what will help alleviate those concerns.

      • ankor on 18/08/2019 - 20:24

        As a chinese/aussie, I can only say that your parents are living with their head in the clouds.
        They need to take a good hard look at the bills they are racking up, the interest on their loans/cc each month and work out a plan.

        Being rent free and getting $500/month from their other son.. bloody hell mate, it's like bailing out a sinking boat with a teaspoon.

  • windowshopper on 14/08/2019 - 15:14
    +9

    You are not liable for any of your parents debt. No one has any right to chase you for it. Don't change this by taking their debt.

    If they are both not working then there is no way they are ever going to repay it. You also have to make sure the debt is not still accumulating. People still have living expenses.

    I would understand why they are choosing not to work when they have debts. Help them get a job. There are many packaging work opportunities now which is low experience but decent paying work.

    If I was old, couldn't get a job and had no assets to my name then bankruptcy is an option.

  • mskeggs on 14/08/2019 - 15:15
    +13

    You need to approach this as a grown up, not by looking at legal arrangements like controlling their furniture or evicting them(?!?!?).
    Ask your parents and brother what their plans are to gain an income, and what the time frame is.
    Explain you are considering your own future which might involve kids and a smaller house, but you obviously want to ensure they find their feet as soon as possible.

    It is quite reasonable to expect both your parents to work or provide for themselves. It is unreasonable to deny them housing without seeking to find a respectful solution.

    • HighAndDry on 14/08/2019 - 15:20
      +36

      You need to approach this as a grown up

      Unfortunately I fear OP might be the only grown-up in this situation if their parents are $40k in debt and needed OP to tell them to cancel cleaners and Foxtel.

      • Kangal on 16/08/2019 - 00:50
        +3

        The OP needs to approach his parents and his (deadbeat?) brother.

        Then say, what if he dies tomorrow… where will you move, what will you eat, where will you get the electricity?
        And clarify that this isn't to make the situation worse or mock or guilt-trip them, but to look at things objectively and formulate a plan. Currently their plan is to ask you for $60k (by guilt-tripping you) so they can pay off their growing debts, followed by continuing to live with you, and hoping things get better financially for them = through you. This might be acceptable with you, and for some people it is, but based on the tone of the thread it doesn't seem like so.

        To be frank, OP, I am in a similar situation but much worse. And I have logically concluded that my life and feelings do not matter in the eyes of my family members. So eventually there will be a separation, but that takes power and courage. I am in short supply of both, but I am working on a way/formula to better myself first and foremost, and have the luxury of deciding if-when-how I could help them out.

        My only advice would be to figure out your "Why". As in Why do you get up in the morning? And where do you want to be in 5 years time? That's a hard start. Next is figuring out how to get there, again no easy task. And thirdly to take the first 100-steps and putting the theory into practice, that's the hardest part. Do it long enough, and you eventually make life-progress, and suddenly that 1,000 Km walk doesn't seem so bad anymore… it really is a marathon

  • Seraphin7 on 14/08/2019 - 15:16

    If they have no assets, then let their debts, etc. stack up to the roof. If they can't cover them, eventually they will be called on them and will have to file for bankruptcy. None of those debts can be referred to you solely because you happen to be their child.

    Support them in whatever way you sit fit but noting that whatever cash/assets you give them will be spent and none will be coming back to you.

  • Bob81 on 14/08/2019 - 15:20
    +4

    If it is as you mentioned that your parents will likely live with you and your family for the rest of their lives, your willing to support them and they have nothing of significant value, such as a house, car, etc, I think it would be best for them to claim bankruptcy and clear their debts. This will get them out of their hole and onto government support.

    • SnakeCasablanca on 15/08/2019 - 20:18

      I would also let them declare bankruptcy. Sounds like if you pay of their credit cards they will get more debt to pay for luxuries. If they are bankrupt… No new debt.

      Plus as long as they arent on your mortgage… No recourse for the lenders.

  • Quantumcat on 14/08/2019 - 15:25
    +1

    Help them to declare bankruptcy

  • p1 ama on 14/08/2019 - 15:49
    +19

    This is a delicate situation, but let's look at the facts.

    Your parents are only $40k in debt - this is not a terrible situation. The truth is that there are many other people who are in far, far worse situations than your parents are in. The biggest concern is that the $40k is in high interest personal loans and credit card loans.

    The first thing you need to decide is whether you want to help them or not. Helping them might involve monetary help, it might not, but you need to decide whether you want to be involved and if so, why, if not, then why not.

    At the end of the day, I think it's worth remembering that your parents housed you, fed you, gave you an education, obviously treated you well enough for you to have reached this day and that the amount they would have had to spend raising you so far (even if they may have been bad parents) is surely more than whatever monetary amount that you would have to spend in order to help them. You don't have any legal requirement to help them, but if your parents were there for you when you needed them, I think the least you could do is to be there for them when they need you. And no, I don't mean that you should just give them $40k, but rather, find a way to help them.

    In regards to your options,

    -Purchase their furniture (they own 60% of the house furniture, if I take it off them they can use the funds towards debt, and I also control the furniture)

    This is a reasonable idea. I would start off by helping them sell everything they don't need and making sure that the funds go towards paying off the debt. Sure, buy their furniture off them. If they have any valuable assets, I would start making listings for them and getting rid of them.

    -Give them money to get out of debt (lost money, puts myself in worse position)

    This would be a last resort, but if you do this, my suggestion would be to have a repayment plan figured out with them. You need to figure out how much money they are making and make some reasonable attempt at coming up with a repayment which is feasible. The major benefit to this is that you'll probably be charging them far lower interest than the personal loans and credit cards. Make sure that they do not have any other liabilities.

    -Seek ways to evict them (I've only seen articles on parents evicting their kids, not the other way round)

    Not sure what this would achieve - you only make their situation worse and you don't benefit in any material way. I wouldn't evict them unless you don't like them and don't want them living in your place for whatever reason. Even then, there are moral issues to consider.

    -Set up a formal loan agreement with them where I act as the debt consolidation loan provider (don't know how much this will hold up)

    It will hold up if you set up the contract correctly. I personally think that this is the most reasonable solution. However, you need to address the big issues.

    1) Why did they get into so much debt in the first place. I assume they are not wealthy, why do they have a cleaner and Foxtel? What other expenses can they cut? I know someone making close to a 7-figure salary as an options trader who does his own dishes and cleans his own house.

    2) Why don't they have any ability to repay? Why is your dad unemployed? Try help him find a job, same with your mum, why is she a housewife when she no longer has kids to look after? The first step to solving any financial issue is to get some income.

  • MoshPitShaq on 14/08/2019 - 15:49
    +14

    The Foxtel and cleaner only being cancelled once the debt had reached $40k really gets to me…

    But… Everyone's circumstances are different, and I would personally help my parents to the best of my abilities, and would encourage you to help yours, given they also make an attempt to alleviate the situation (Foxtel and cleaner, argh).

    Another thing worth mentioning is how old your parents are?

    • Soluble on 14/08/2019 - 19:36
      +6

      What really gets me is how they were paying for Foxtel and a cleaner in someone else's house instead of paying rent!

      • mooboy on 15/08/2019 - 13:19
        +18

        What gets me is housewife and unemployed need a cleaner…

        • taoz on 15/08/2019 - 13:34
          +4

          Staggering, no money and in debt with no jobs and have a cleaner.

  • Fier2 on 14/08/2019 - 15:49
    +1

    Have you talk about it with your wife and your parents ?

    Would be great to see with your wife what can be done for your parents. If she is willing to take on their debt or just asking you to ask your parents to fill for bankruptcy.

    Some parents are proud and will often try their best to put on with the cost of life without asking much, when some will come back to their kids and ask them to look after them because they raise them. If your parents have been good to you, it will be nice to help them as much as you can ( and maybe not evicted them if possible as it might be hard for them to find a place). And even if they weren t the best, showing them some kindness would be good for their old days.

    You can either let them keep going in their debt or just start planning their finance with them .

  • [Deactivated] on 14/08/2019 - 15:52
    +1

    Yes it is expected that you will look after your parents.

    In fact there are rules around it, but luckily you are in Australia. If you were in China, your grandfather can just turn up and make you look after him with the threat of jail time apparently.

    • passwordistaco on 14/08/2019 - 23:44

      Interesting.

      I appreciate I'm not across culturally what these 'expectations' are.. but do those obligations extend to repaying a debt that has obviously grown irresponsibly? Where is the accountability for OPs parents? I do agree with most that evicting your parents won't solve for anything.

      More importantly OP, whats the go with your brother? If he is able to source an income I'd focus on that, then tackle your parents financial problems together.

      I don't know much about bankruptcy so can't make a comment there.

      And lastly, look after yourself too OP. I'm friends with guys that are single income earners for young familes of four, and are already feeling the pressure… Can imagine this would be a lot to take on mentally.

  • barozgain on 14/08/2019 - 15:53
    +8

    Sorry OP but it's very sad reading this thread. They are your parents not some randoms or friends: they took care of you and didn't mind all your troubles when you were young not for them to be evicted out of your place.

    If I were you, I'd do everything I can to let them be ok and live in dignity.

  • juzza87 on 14/08/2019 - 15:55
    +5

    I am intrigued by the Bikies option, tell us more.

    • Lockieasy on 15/08/2019 - 11:22
      +6

      Maybe his parents can earn a decent wage as bikies.

    • ednamekin on 16/08/2019 - 21:31
      +1

      Get my father to join the Bikies, and start a side-hustle of showing up at Ozbargainers' front street menacingly, "encouraging" them to buy from TechFast.

  • garetz on 14/08/2019 - 15:58
    +9

    You missed the most important question, how old are your parents ? Are they near retirement age ?
    If your father has been out of work for 3 years, is there a reason ? Is he still looking for work ? Maybe apply for newstart in the meantime.

    40k is not alot of debt, but if they have 0 income, they should be reassessing their expenditures. They may end up being financial burdens on you for the rest of your life. If they are near retirement age, maybe try to put them on the pension asap.

    They are your parents, you wouldnt be alive without them, why would you ever even consider evicting them ?

    Just use a common sense approach, and look at their financial situation, and their options, then make what needs to happen happen.
    You are not liable for the debt, if you cannot find any way for them to get out of under the debt, then their only choice is bankruptcy unless you want to pay the debt yourself, which seems like a waste of money for no reason.

    If they were to declare bankruptcy how would it affect them in the future adversely ? If nothing then do it sooner rather than later.

    • trapper on 15/08/2019 - 18:12

      They may end up being financial burdens on you for the rest of your life.

      This without doubt. Get the bankruptcy underway and stop pouring good money after bad.

    • ednamekin on 16/08/2019 - 21:32

      54 each, yes looking for work and I've helped with his CV, written him a couple cover letters, but nada. When he gets interviews rejects are overwhelmingly due to being over-qualified.

      • spacemannn on 17/08/2019 - 01:20

        If he's getting THAT many rejections to being over qualified, and can't seem to get a job for his level of skill, just tone down the resume to match what they want. He can use his skills and know how to get a better salary 6 months/1 year into the job. Don't need to go in guns blazing listing every single achievement/job his had. That's stuff I did when I was looking for my first proper job with barely any work experience. Taylor the resume to some jobs but tone it down a little.

      • andyhwl on 18/08/2019 - 21:20

        Cleaning jobs are quite good to get into. Centre Link can help with placements.

        Sunday language schools? Worth looking into too.

        Asian supermarket check out?
        Foodcourt table cleaners.

        Obviously pride would get in the way of this.

        • ankor on 19/08/2019 - 06:42

          Asian supermarket checkout probably pays about the same as a cleaner.. diddly squat. But even a crap wage of $14/hr is better than 0.

  • HighAndDry on 14/08/2019 - 16:03

    Edit: Just to add to previous comments - do they have any Super? It's not ideal, but they CAN access their super under hardship provisions.

    • mskeggs on 14/08/2019 - 16:07
      +6

      True, but likely better to discharge debts while super is locked away safe than withdraw it to pay off consumer debt.

      • HighAndDry on 14/08/2019 - 16:21
        +1

        Yeah - I may have understated just how "not ideal" that would be. But if OP can rule out bankruptcy (and that is a big "if" there) - given the age of OP's parents, dipping into super will be preferable to possibly taking on more debt if unavoidable expenses pop up.

    • [Deactivated] on 14/08/2019 - 16:22
      +1

      his parents probably did all cash in hand jobs

  • s313 on 14/08/2019 - 16:06

    did your parents consult others when ever u needed money or something else…

  • FareEvader on 14/08/2019 - 16:19
    +2

    Paying off their debts won't fix anything, you need to look into the root cause of the problem. How are they in so much debt when they haven't any paid rent for nearly 2 years? Do they gamble?

  • idonotknowwhy on 14/08/2019 - 17:43

    Are you planning to / do you have kids? If so, I've observed that the Asian way is that the parents will take care of them right?

    If that applies to you, then they'll easily save you 40k in childcare costs, giving you time to sleep, cleaning up, etc.

    As others have said, you need to figure out how they got into debt in the first place, and find a solution to fix this.

    Also why did they hire a cleaner when they're unemployed. What do they do all day?

    • barozgain on 14/08/2019 - 18:17
      -1

      why did they hire a cleaner when they're unemployed

      username checks out

  • try2bhelpful on 14/08/2019 - 18:42

    Are you buying the house or just renting it? If you are buying the home then you may be able to borrow against your equity to clear their credit card debt. Paying the minimum amount at 20% is just madness, you are better clearing it for them and paying a much lower rate. The $500 could be used to pay a fair amount of the principle as well. Make sure you cut up their credit cards as well. Does your brother have a job? If so he might be able to increase his payments to cover the debts. It sounds like he isn't really pulling his weight. It also depends on what your parents view is on the debt as well, are they happy to cut down on their spending, or are they just looking at this on the never never?

    Best of your luck with this, it is not a great place to be.

  • AustriaBargain on 14/08/2019 - 18:55

    You could get an accountant to examine their situation, your situation, and tell you what they think makes the most sense. A few thousand for an account to get a feel of things could save you thousands more in the long run. Sounds like you're about to the patriarch of your family. I'd see what an accountant says, see if it makes sense, see if you can think of anything better, and then just do it. And reassess your situation every now and then. And if you're making decisions for them then you need to find out what they want, maybe they would be happy on a low fixed income if they could live near a trainline or the beach 2 hours out of town. You're talking like your parents are close to being dead, or mentally incapable of being in charge of their own finances or living situations, and it sounds like you already decided you want to step in do whatever you need to do. It'll be a lot easier if what you want them to do is what they want to do too, so you have to talk to them about what they want. Sucks to be you right about now.

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