Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
My mother is 80 years old. She is in credit card debt for
$120,000. This is due to shopping via television programs. I cannot help her
with this debt. Any suggestions? -- Diane
Dear Diane,
That's a lot of impulse buying! Where is she putting all
this stuff? Spending $120,000 on gadgets and goodies advertised on TV borders
on the irrational. It's a good thing you are aware of the problem and want to
help.
What you can do to help, however, depends on a couple of
things.
First, does your mom want your help? If she is just
complaining but isn't ready to take advice, then there's not much you can do.
I normally advise helping elderly parents financially when necessary, but you
can't afford to finance out-of-control spending. If you tried, it may just
encourage her to spend more.
Second, is your mom of sound mind? It's awfully hard to make
that decision. Eighty years old looks so different on different people -- some
people are still working at that age, or could be, while others are starting to
show judgment lapses. The most difficult cases may be those who are just as
sharp as ever 90 percent of the time -- and then do inexplicable things the
rest of the time.
Sometimes, a person's health or the medications they are
taking can affect their judgment, even on a temporary basis. I remember when I
went to the hospital to visit a friend who had just had back surgery. My
husband and I expected to find a wan, weak person lying in bed. Instead, we
found Maureen standing by her bed, phone and credit card in hand, staring
with pain med-glazed eyes at the shopping channel! She bought so many things
she didn't remember, boxes were coming to her house for weeks.
If your mom truly wants help with her problem (not just help
paying the debt), there are some great resources out there. Debtors Anonymous is
a fellowship of people dedicated to helping each other stop "debting,"
as they call it. Debtors Anonymous charges no dues and is very successful helping
people stop spending compulsively.
To deal with her existing debt, she needs a financial
counselor to look at her total financial picture and show her some options. I
recommend a member of the Association of Independent Consumer Credit Counseling
Agencies (AICCCA). One of the first options
I would suggest is that she returns every item she possibly can, and sell much
of the rest. You could even help her sell collectible figurines and whatnot on
eBay.com or other online sites.
If your mom's mind is starting to slip, your tactics will be
different. "Find out if she doesn't remember buying all this stuff again
and again and again," says Georg Finder, independent credit evaluator. If she isn't sure,
or if she denies buying all of it, you definitely need to step in.
You may need to have yourself appointed as her guardian,
according to Finder. That way, she can't go on more buying binges. "Call
the card companies to lower the spending limit to what she owes now," he
says. Or call the credit card companies and see what they suggest. "Tell
them what Mom is doing. They may actually suggest something helpful --
different cards have different policies."
If you live with your mom or happen to be there when boxes
keep coming, you can be proactive. Finder says, "Tell the delivery person
that the sale is refused -- that will cancel the charge and mom will go on a
list."
It would be easy to say that it's the credit card companies'
problem if your mom spends money she can't pay back if she is starting to lose
her decision-making powers. However, we should never give someone the
responsibility for something that we don't want to give them power over. I
certainly don't want banks to start checking on my mental soundness when I'm
80, nor do I want them to cut off my credit at an arbitrary age. The
responsibility for good credit decision making has to start with us -- or, in
your mother's case, with a caring family member.
You are doing the right thing by helping to curb your mom's
irrational spending. It won't be easy, but it's the right thing to do.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: May 29, 2009
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