Banks for You!

My retired parents are in a financial crisis. They got behind on their credit cards while they were trying to pay the mortgage on their home of 41 years. That home is now in a short sale. An attorney has advised them to file for bankruptcy to discharge the credit card debt and any debt that might remain after the short sale. After the sale of the home, I need to relocate them to my state so that I can further assist them, but I’m not sure if any landlord will rent to them given their terrible credit history, which will look even worse after the bankruptcy. Right now they make too much to qualify for subsidized senior housing. Any advice would be greatly appreciated.

Answer: You’ll probably have better luck with mom-and-pop landlords than with the corporate kind that run huge complexes. The mom-and-pop types tend to have more flexibility with potential renters who have tattered credit, particularly if those renters can make substantial deposits. If your parents don’t have much cash left over after bankruptcy — and they probably won’t — you may need to front them some money or consider letting them live with you while they save up.

You also should get a better idea of what caused their financial train wreck to see what you can do to help avoid further crises. If they’re suffering from diminished capacity, you may need to talk to an elder law attorney about taking over their finances for them. If they’re chronic overspenders, they may benefit from budgeting classes from a nonprofit credit counseling agency or community college. Even if the only bad decision they made was to continue borrowing against their home rather than paying it off, they could still benefit from some financial education and advice about how to live within their means. A session with a fee-only financial planner could help you all figure out what that will look like.

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