Help needed—Senior Citizen money issues

Nebraska_Disney

DIS Veteran
Joined
Mar 15, 2009
My father in law just passed away suddenly and unexpectedly. Just today, my wife was talking with her mom and learned their finances are in a shambles and she has never been involved with anything and is lost. She now finds herself a widow, owns her house, and a mountain of debt. At this point, how big that mountain is is not known to me or my wife, but we are guessing it could be $100K. Her house is worth about $180K and she works PT at a fast food place. It is not known yet if my FIL’s pension will continue to my MIL or not. The big question is, how does she deal with the debt? Options, such as bankruptcy? Anyone go through something similar?
 
In my area there are senior communities based on income. I would first find out the extent of the debt, then sell the house, pay off the debt, and find her a place like that. She should at the very least get social security. I think you need to start with a lawyer.
 
My father in law just passed away suddenly and unexpectedly. Just today, my wife was talking with her mom and learned their finances are in a shambles and she has never been involved with anything and is lost. She now finds herself a widow, owns her house, and a mountain of debt. At this point, how big that mountain is is not known to me or my wife, but we are guessing it could be $100K. Her house is worth about $180K and she works PT at a fast food place. It is not known yet if my FIL’s pension will continue to my MIL or not. The big question is, how does she deal with the debt? Options, such as bankruptcy? Anyone go through something similar?

It is state-specific. Some states, yes, she owes all the debt...and some states, she would only owe part (that which contributed to the marriage). I would check with the local government office in her city/county/state to see if they have free legal help for low-income senior citizens to help deal with these issues (since it sounds like your mother-in-law would qualify). If not, they may have low cost help that might help you through this difficult time.

My condolences and take care!
 
In my area there are senior communities based on income. I would first find out the extent of the debt, then sell the house, pay off the debt, and find her a place like that. She should at the very least get social security. I think you need to start with a lawyer.

Exactly. Hopefully the estimate of $100,000 isn't too low on the debt. Sell the house, put some money in the bank, and have her start with a clean slate.
 
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It is state-specific. Some states, yes, she owes all the debt...and some states, she would only owe part (that which contributed to the marriage).

My initial thought to this was "How can that be?" But at a quick Google search says you are right depending on how the debt was incurred.
 
My father in law just passed away suddenly and unexpectedly. Just today, my wife was talking with her mom and learned their finances are in a shambles and she has never been involved with anything and is lost. She now finds herself a widow, owns her house, and a mountain of debt. At this point, how big that mountain is is not known to me or my wife, but we are guessing it could be $100K. Her house is worth about $180K and she works PT at a fast food place. It is not known yet if my FIL’s pension will continue to my MIL or not. The big question is, how does she deal with the debt? Options, such as bankruptcy? Anyone go through something similar?
I haven't dealt with this type of situation personally though I have lost a parent. I would not think of filing bankruptcy unless it's a last resort. Assuming the final arrangements don't need assistance? As far as strictly talking about after this, MIL with help of you and spouse could look through mail statements, email account if possible if he used it, credit report, banks he possibly banked with, did he finance the car, and any other method of information gathering. Sounds like contacting the department that dealt with his pension, and social security, is being done. Was he ever in the service? If it were my mom, that's what I'd assist with, to see what debt or asset may be out there. First make sure mom had her mortgage paid up and utilities were paid so that housing issues didn't have to worried about immediately as I can't imagine how stressful that would be after losing a spouse, and everyone else would have to wait a minute as information is collected.
In some cases, some of that debt may be very old, and depending on state laws on debt assumption and on statute of limitations, etc. maybe some doesn't even need to be concerned with.
I'd definitely see if there's some free legal assistance somehow for her as suggested earlier, particularly with estate law.
 
Your MIL is not the first person to find herself in this situation and it's difficult for family members to research and access all the resources available to help.

Here's the link for the Nebraska United Way 211 help line and website. https://www.unitedwaymidlands.org/2-1-1/ They have a searchable data base and phone counselors that can direct you to the appropriate agency in your area, one that will walk you through all the legal, financial, and support services available. These will either be free or sliding scale fees based on income. You and your MIL need high quality information without bias or profit-motive and UW is your best link to the help you will all need in the coming months.
 


I appreciate the responses. Not a great thing to deal with. MY FIL was in the air force for 4 years and a federal employee for close to 40. He had been retired for several years now as the govt privatized his job (flight service center). Anyone familiar with federal pensions?
 
I appreciate the responses. Not a great thing to deal with. MY FIL was in the air force for 4 years and a federal employee for close to 40. He had been retired for several years now as the govt privatized his job (flight service center). Anyone familiar with federal pensions?

You can look things up at OPM.gov. With 40 years of service he is probably CSRS and I am not familiar with that. With FERS I know it depends on how the pension was set up. You can take the whole pension and leave nothing for spouse, or you can take 90% of pension and leave surviving spouse with 50% at death of employee.
 
when you are looking into the pension also check to see what her medical insurance situation is/will be. i'm retired government and some plans provide continuation of health insurance post retirement for surviving spouses while others do not. even for those that provide the cost can be prohibitive (my dh's premium would over quintuple if he opted to stay on when i pass). since she works PART-TIME at the fast food i'm guessing she's not doing it for medical coverage so it really needs to be looked into since she might only have 30 days post his death to make a decision to keep/decline coverage under his pension plan (and if there's not continuing spouse pension sufficient to pay the premium in full she will need to pay out of pocket to prevent it's cancellation).

on the debt-i would look into free consumer credit counseling services and see what they recommend. i'll echo what was said above on rules varying state to state. i was surprised to find out when mil passed that she could have chosen to wipe out many thousands in debt when fil passed b/c it was on cards only in his name (and the stuff had been used jointly by the household) if she had simply surrendered the cards and closed the accounts. she however wanted access to those cards so she took on the debt to put them in her name (we found the letters from the credit card companies in her paperwork detailing how to get the debt written off). in any case-don't immediately think of selling the house. depending on the laws in the state it could be protected if bankruptcy is a better option, and even if she could sell it/pay the debt in full/be left with a little-it may be much more financially beneficial to do the bankruptcy and keep it (depending on the ongoing cost of living in the home vs. other housing options).

it might be worth it to pay for an hour with a GOOD CERTIFIED elder law attorney in her state to get jump start advise on what to do/NOT to do.
 
I appreciate the responses. Not a great thing to deal with. MY FIL was in the air force for 4 years and a federal employee for close to 40. He had been retired for several years now as the govt privatized his job (flight service center). Anyone familiar with federal pensions?
Depending on his service type (i.e. Active, Guard, or Reserve) and characterization of discharge (not all service type/time period makes one considered a veteran under specific federal codes), there are some options for the surviving spouse, and also in burial services and things surrounding this with Dept. of Veterans Affairs. For final arrangement type of information, if dealing with a funeral home right now, I would assume they should have already brought this up in the case of burial, markers, headstones, etc., whatever the final arrangements and of course wishes are/were. But, anyway, weblink is https://benefits.va.gov whatever the case may be. There are also phone numbers on there and locations to closest VA locations for a representative that may be of further assistance. If he was receiving VA disability, that would have to be reported anyway. Hopefully a copy of his DD214 (Certificate of Release/Discharge Active Duty) is around, but these can also be requested through National Archives if necessary.

As far as federal employee, I did work with federal government before, but not in retirement and benefits, so I'm only vaguely familiar with federal pension. But yes, she can use OPM.gov or phone contact retirement information there for more information on the pension, possible life insurance, etc.
 
it might be worth it to pay for an hour with a GOOD CERTIFIED elder law attorney in her state to get jump start advise on what to do/NOT to do.
A good attorney to deal with the elder law and bankruptcy questions would be money well spent. Not knowing bankruptcy laws, on the surface to me if the assets exceed the debt I'm not sure that is an option, but I could be wrong.
My former neighbors came up with their own financial plan without consulting an attorney after the man lost his job. They ended up with a legal spaghetti of problems. They wanted to walk away from the house, so they could keep up on their payments on their RV, Pickup and Jeep. Problem was, he wasn't on the mortgage, only she was and they had some funky provision where the lender could attach her wages for the payment. Throw in that they were married, divorced, then remarried and she bought the house when they weren't married. It took the lender a few months to enforce the wage attachment, but it took them a year in court to sort it out.
 
Exactly. Hopefully the estimate of $100,000 isn't too low on the debt. Sell the house, put some money in the bank, and have her start with a clean slate.

IF she's willing to move. My Mom has money issues, a house that's paid off, but she refuses to sell and move.
Also, if your Mother is filing taxes, and is able to file jointly with your father (you still can for the year in which he died), be sure she files for "Innocent Spouse", otherwise the IRS may take the refund to pay off debt.
 
i just thought of this-

some older retired federal employees believe they are ineligible for social security b/c they didn't pay into social security. if that's the case with your late fil-have your mil still look into social security. i say this b/c i knew a massive number of retirees from a federal facility where i used to live-all were under the impression that they didn't qualify for social security until one went in and learned that during the decades he worked for the federal government there were periods of time when he and his co-workers had technically been subcontracted by the feds to private companies. those private companies had paid social security on those subs, and between those periods of time and (with some) the quarters they had put in prior to getting fed jobs-they were indeed eligible to benefits (and their widows as well).

social security is something to explore.
 
IF she's willing to move. My Mom has money issues, a house that's paid off, but she refuses to sell and move.
Also, if your Mother is filing taxes, and is able to file jointly with your father (you still can for the year in which he died), be sure she files for "Innocent Spouse", otherwise the IRS may take the refund to pay off debt.
There other options like reverse mortgages.
 
when you are looking into the pension also check to see what her medical insurance situation is/will be. i'm retired government and some plans provide continuation of health insurance post retirement for surviving spouses while others do not. even for those that provide the cost can be prohibitive (my dh's premium would over quintuple if he opted to stay on when i pass). since she works PART-TIME at the fast food i'm guessing she's not doing it for medical coverage so it really needs to be looked into since she might only have 30 days post his death to make a decision to keep/decline coverage under his pension plan (and if there's not continuing spouse pension sufficient to pay the premium in full she will need to pay out of pocket to prevent it's cancellation).

on the debt-i would look into free consumer credit counseling services and see what they recommend. i'll echo what was said above on rules varying state to state. i was surprised to find out when mil passed that she could have chosen to wipe out many thousands in debt when fil passed b/c it was on cards only in his name (and the stuff had been used jointly by the household) if she had simply surrendered the cards and closed the accounts. she however wanted access to those cards so she took on the debt to put them in her name (we found the letters from the credit card companies in her paperwork detailing how to get the debt written off). in any case-don't immediately think of selling the house. depending on the laws in the state it could be protected if bankruptcy is a better option, and even if she could sell it/pay the debt in full/be left with a little-it may be much more financially beneficial to do the bankruptcy and keep it (depending on the ongoing cost of living in the home vs. other housing options).

it might be worth it to pay for an hour with a GOOD CERTIFIED elder law attorney in her state to get jump start advise on what to do/NOT to do.
Start here for whose responsible for the debt. https://www.consumerfinance.gov/ask...-off-the-debts-of-my-deceased-spouse-en-1467/ If this is credit card debt and if it was in the deceased spouses name there might light at the end of your tunnel.
These two are the best advice in this thread.

Do not jump right to selling the house. As a senior on a limited income that might be the only solid thing she has. Find out exactly what type of debt is owed. There’s a really good chance she might not be liable for a large part of it. Talk to a reputable lawyer, maybe two.
 
I appreciate the responses. Not a great thing to deal with. MY FIL was in the air force for 4 years and a federal employee for close to 40. He had been retired for several years now as the govt privatized his job (flight service center). Anyone familiar with federal pensions?

Go to the OPM.gov website and look under Retirement. It gives you instructions on what you have to do in case of a death.

If you can’t find his retirement paperwork at home they will be able to tell you whether he had a survivor annuity. If he had one then your MIL can keep her federal health benefits and pension benefits.

Good luck.
 
These two are the best advice in this thread.

Do not jump right to selling the house. As a senior on a limited income that might be the only solid thing she has. Find out exactly what type of debt is owed. There’s a really good chance she might not be liable for a large part of it. Talk to a reputable lawyer, maybe two.
I also would not suggest selling the house immediately. However, since she has not been in the practice of taking care of anything up to this point, I do believe a house will be too much to keep up herself. Everything will depend on how much income she ends up having, of course. But when my dad died, my mom stayed in the house for about a year and a half and then she was ready for something maintenance free and more secure feeling for her. And she had plenty of money. Had she not, it would not have been an option to stay in her home. Upkeep, taxes and insurance could clean a person on a limited income out very quickly. My mother in law moved to a small apartment a few years after my father in law passed away.

In your case, OP, I still think moving in the direction of selling the house in the not too distant future is the best thing to do. If your mother in law is unable to manage money, she could end up defaulting on it. And if she won't accept your help it could happen before you even know there is a problem. Right now is the best time to set up a plan with her, while she is open to your input.
 
She owns the house, mortgage free. But, other debt, taxes, insurance, upkeep will be a chore. She is 64 and the house is on a large lot, over 1/2 acre with lots of mowing and landscaping. Probably too much for her long term and we live 90 miles away, so not just a quick drive over either.

Lots of good and useful information here and places for us to start. I appreciate it.
 

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