Hello,
I have a question for a friend, and since I am not in this field I am relatively uneducated about this subject. If someone could yay or nay this idea and provide next steps it would be really helpful.
Facts:
The grandmother and granddaughter live together in a house that they rent for $800/mo. There is no written agreement in place, all done in cash.
The grandmother has good credit but excessive credit card debt and only receives $800/mo in social security. The granddaughter is listed on the credit cards to be able to use them, but was never a co-signer.
The granddaughter has average credit and also has excessive credit card debt (to a lesser degree). She also has student loans that have been in deferral for many years totaling approx 40k. The granddaughter makes about 25k/yr.
The total credit card debt is about 20k. Most of it is on the cards that are in the grandmother's name. The charges on those cards have been used for both of them however. Their total savings together is at best about $1,000. There is no real estate ownership or other major assets, but the granddaughter owns a 2002 honda with 120k+ miles.
Idea #1:
Between the minimum payments of the credit cards, rent, utils, and food there is not enough income to stay afloat. Debt consolidation is necessary to reduce the credit card payments, and then they can begin to save money. The risk here is that credit will not be available in case of emergency.
Idea #2:
The grandmother is unhealthy and old in age, so in the event of death, all of that debt will be forgiven. Any remaining debt the granddaughter has should be transferred to the grandmother's name. The grandmother will claim bankruptcy and fore-go her credit score, since she will not be making any major purchases again ever.
Any thoughts or ideas to this process?
Thanks!
I have a question for a friend, and since I am not in this field I am relatively uneducated about this subject. If someone could yay or nay this idea and provide next steps it would be really helpful.
Facts:
The grandmother and granddaughter live together in a house that they rent for $800/mo. There is no written agreement in place, all done in cash.
The grandmother has good credit but excessive credit card debt and only receives $800/mo in social security. The granddaughter is listed on the credit cards to be able to use them, but was never a co-signer.
The granddaughter has average credit and also has excessive credit card debt (to a lesser degree). She also has student loans that have been in deferral for many years totaling approx 40k. The granddaughter makes about 25k/yr.
The total credit card debt is about 20k. Most of it is on the cards that are in the grandmother's name. The charges on those cards have been used for both of them however. Their total savings together is at best about $1,000. There is no real estate ownership or other major assets, but the granddaughter owns a 2002 honda with 120k+ miles.
Idea #1:
Between the minimum payments of the credit cards, rent, utils, and food there is not enough income to stay afloat. Debt consolidation is necessary to reduce the credit card payments, and then they can begin to save money. The risk here is that credit will not be available in case of emergency.
Idea #2:
The grandmother is unhealthy and old in age, so in the event of death, all of that debt will be forgiven. Any remaining debt the granddaughter has should be transferred to the grandmother's name. The grandmother will claim bankruptcy and fore-go her credit score, since she will not be making any major purchases again ever.
Any thoughts or ideas to this process?
Thanks!
Comment