Family Financial Frakup

DragonPup

Hey guys, I am trying to help a sibling with some bad koney woes.

After over a decade my sister is seperated from her husband and at some point will finalize divorce. One of the lessons she has learned the hard way is not to have every credit card under one name. She owes somewhere around $21k across a few banks.

Currently she is living at home and working a couple of low paying part time jobs and is essentially not making enough to meet all the monthly payments. She tried speaking to a few banks to see if they were willing to settle partway and those that seemed willing wanted all the money up front.

And if that wasnt enough she and her ex's home has more money owed on it than its worth. This is the one debt that actually has his name on it.

I am trying to think what to recommend for her. The options I can think of are credit consolidation(are any of those guys on the up and up?) or bankruptcy. I've never had money issues even close to this so I was looking for guidance or other suggestions. Thanks!

VisionOfClarity

Has she talked to her divorce attorney about what could be settled in the divorce?

The Crowing One

VisionOfClarity wrote: »

Has she talked to her divorce attorney about what could be settled in the divorce?

Yup!

DragonPup

Lawyers cost money that she doesnt have. Unless theres the equivilent to public defenders or a nonprofit group in Massachusetts.

ceres

It sounds like if there's a way for her to scrape together enough for a lawyer it would probably pay for itself.

Bedlam

Are there any debt consolidation places she could talk to? I dont really know much about them but I see the commercials at work every day.

DragonPup

Bedlam wrote: »

Are there any debt consolidation places she could talk to? I dont really know much about them but I see the commercials at work every day.

I see the ads too, but they all come off as totally sketchy. If anyone knows of one that isn't let me know.

As for a divorce lawyer, assuming its settled out of court how much should one expect it to cost?

Improvolone

There is no right answer for that. Divorce proceedings can last a week to five years, more, less, or somewhere in between. If there aren't children involved it is generally much much much much much much much quicker and cheaper. They can use the same attorney which will be the cheapest, but only couples on amicable terms can pull that off. I've had a scum bag attorney take me for $14,000 and produce nothing. My current attorney is incredible and has nearly completed my drawn out case for a fraction of that.

MushroomStick

Bedlam wrote: »

Are there any debt consolidation places she could talk to? I dont really know much about them but I see the commercials at work every day.

Don't. The one person I know that tried this said it went like this: First you stop sending any payments directly to any of the places that you owe money and send all your money to the debt consolidation place. Then from that money they take the $5k or so that they're charging you for their services before they start any negotiating for you. So if it takes you 6 months worth of payments to get them their fee, all of your existing debts continue to rack up late fees and increased interest rates during this period. Then when the consolidation place finally starts negotiating for you, you'll be lucky if they can get you back down to the payments you had before you ever came to them.

Thanatos

The only thing more expensive than getting a lawyer is not getting a lawyer.

She needs to find a non-profit, get a loan from a friend or family member, or somehow manage to scrape together the money to get a lawyer. In her case, it will doubtlessly be a good investment.

Sir Headless VII

Thanatos wrote: »

The only thing more expensive than getting a lawyer is not getting a lawyer.

She needs to find a non-profit, get a loan from a friend or family member, or somehow manage to scrape together the money to get a lawyer. In her case, it will doubtlessly be a good investment.

That said a lawyer isn't going to be able to make the debt go away, she will still likely be responsible for her fair share and that house sounds expensive. She should still get a lawyer though.

DragonPup

Alright, when I speak with her next, I will advise her to look for a non-profit lawyer group. Thanks again.

Deebaser

Also, there may be a free attorney available some days at the courthouse. Check out the Pro Se office.

sterling3763

In DC, the Bar has a pro bono program that hosts monthly walk-ins clinics where people can talk to an attorney for an hour or two and at least get some guidance on these sorts of matters. If you meet certain income eligibility requirements, you can qualify for on-going representation. MA likely has something similar.
A quick google search suggests this might be a good starting point. They don't seem to have a unit designed for this particular issue, but might be able to help anyway. And if they can't, they will definitely be able to refer you to someone else; they've likely partnered with/referred people to them before.

DragonPup

Thanks guys. I spoke to a friend who knows someone who does family law. Since the two parties just want the marriage over with, and with no kids, it won't be nearly as expensive to do the actual divorce as initially thought. First they have to figure out exactly how much they owe and to who...

Sarcastro

DragonPup wrote: »

Thanks guys. I spoke to a friend who knows someone who does family law. Since the two parties just want the marriage over with, and with no kids, it won't be nearly as expensive to do the actual divorce as initially thought. First they have to figure out exactly how much they owe and to who...

Pretty much, yup. After disclosure comes the split, then the separation/filing and then the ruling.

After the split, she'll have a better idea of what's going on.

Killgrimage

Weird, I thought that when people got married, their debts became each other's debt, and anything debts made after marriage became joint, regardless of who's name was on what. Is that not true anymore?

Druhim

Varies from state to state

Namrok

MushroomStick wrote: »

Bedlam wrote: »

Are there any debt consolidation places she could talk to? I dont really know much about them but I see the commercials at work every day.

Don't. The one person I know that tried this said it went like this: First you stop sending any payments directly to any of the places that you owe money and send all your money to the debt consolidation place. Then from that money they take the $5k or so that they're charging you for their services before they start any negotiating for you. So if it takes you 6 months worth of payments to get them their fee, all of your existing debts continue to rack up late fees and increased interest rates during this period. Then when the consolidation place finally starts negotiating for you, you'll be lucky if they can get you back down to the payments you had before you ever came to them.

Same thing happend to a guy I work with. They pocketed his first few payments and then found out after a few months that his debt wasn't actually being paid off.

Vortigern

It may be worthwhile to speak to a good bankruptcy trustee. I have no idea how the rules work in the US, but it can't hurt. They often offer debt consolidation services, etc, and are more likely to be reputable since getting a trustee's license is expensive, difficult, and time consuming (at least in Ontario). If nothing else, insolvency experts know how to deal with debt and might be able offer better solutions than the rest of us come up with?

Spherick

Just a heads up on the bankruptcy route - certain debts cannot be discharged in bankruptcy, so I would read this.

Also, I know a lot of judges will deny ch. 7 protection and force ch. 13 for most cases that arise out of divorce (at least the ones that I have seen in Florida).

(not a lawyer!)

KidDynamite

Thanatos wrote: »

The only thing more expensive than getting a lawyer is not getting a lawyer. She needs to find a non-profit, get a loan from a friend or family member, or somehow manage to scrape together the money to get a lawyer. In her case, it will doubtlessly be a good investment.

Take it from me, and other friends and the stories you hear.

altmann

Stay the FUCK away from debt consolidation places. Use a REPUTABLE financial institution. There are so many scams in the debt consolidation business it's really sad.

Other than that there's a lot of good advice here.