My Dad's 50,000 in debt and I'm paying

[lifeasiknowit]

I am in a stressful, energy draining, frustrating situation with my father.

 

This is the situation:

 

I just graduated from college and have my own credit card and student loan debts. I am living in a house with a roommate and we are paying the monthly mortgage, but this money we're paying isn't benefiting us, since the mortgage is not under my name but is financed under my dad's name. I would have financed it myself, but since I was a struggling student when the house was financed, he put it under his name. He does not live with us, but is living in California with his girlfriend. So, for several years now, we've been paying off this mortgage, living in this house while he's been living in California accumulating what turns out to be a 50,000 debt.

 

I found out about this when I found a notice stuck to our door stating that he is being sued by his bank for not making any payments towards this 50 grand debt.

 

Since he's been away, I've been making payments towards his Visa, and managing his accounts. This sounds crazy, and I don't want to be doing this, but I have repeatedly told him, he has to deal with his debts, but he hasn't been dealing with it, so I have no option but to help pay off his Visa debt. The reason is, that there are certain payments related to the house that are automatically withdrawn from his Visa, and since I'm living in the house, I have to help. BUT, a lot of the spending on the Visa are NOT HOUSE RELATED.

 

To complicate things further, he wants to sell the house, recoup the money gained from the sale to pay off his debt, basically kicking me out of this house that I have helped pay for. I feel powerless, as legally it is not my house, but his. Originally, when he bought the house, he said it was a gift, a nice gesture for me, but it has turned into a nightmare.

 

Recently I have seen a mortgage broker, who is helping me re-finance the house for an amazingly good deal which would help pay off some of my debt and his debt. Upon telling my dad this (via email), he was outraged, telling me that the deal isn't good enough, that he needs 30, 000 dollars more to clear his debt. Also, I've been seeing a lawyer who is dealing with my dad being sued by his bank, and the lawyer fees are being taken from this whole "deal". What is also infuriating is that my dad has been MIA, not getting in touch with his lawyer, as if he expects me to do all the work.

 

I don't know what to do. This house I'm living in is very small but perfect for me. I can't afford to just go and buy a new house, and I don't want to rent an apartment, because I have a dog; I want a yard and my own place, and if I give up this house, it'll feel like it sucked all this money and energy from me for nothing.

 

What can I do?????

[lifeasiknowit]

does anyone have advice? I guess my post is too long and unreadable?

[SarahRose]

Why doesn't he just file bankruptcy?

 

Why don't you just buy the house from him?

[2sure]

OK. Someone buys a house (your Dad) , not planning to live in it. Instead, they have someone else move in and pay towards the mortgage. This is called renting (you).

 

If the untilities, insurance, whatever are on your Dad's Visa and he isnt paying it - they will be turned off. Are these the visa expenses related to the house that you mention? Sometimes rent includes utility payments, sometimes it doesnt. Yours apparently doesnt.

 

Your Dad has put you in a bad situation by telling you he would eventually gift you the house. However, the amount you are paying is probably similar to what you would be paying to rent elsewhere. The problem is, like you said, you have a dog. Hard to rent with pets, I know. The good news is that all of this debt is in your Dads name - your credit will not be affected. He sounds like he is lost regarding finances, and doing business with him is not a good idea.

 

This is awful, but you might consider this:

Continue paying the minimum towards the visa so that your utilities or whatever can stay on. If the payments are related to the financing of the house - dont bother. And the rent/mortgage , dont pay that either. Save the money for a downpayment on an income property - like a double or a very small house. It will take 6 months for the current mortgage to foreclose and maybe your Dad will take notice that he needs to be responsible. Bottom line is, you probably will need to move.

[Angel1111]

Being emotionally attached to the house is your Achilles heel in this situation and it's causing you to make very bad decisions. You need to walk away from this mess and let your dad handle his own problems. You seem to be looking for something to be in your favor but it's not going to happen - you are automatically in a one-down position because you don't own the property and you have nothing in writing. You're just playing martyr and you'll get no rewards for this -- unless you consider being broke a reward. Learn from it and move on.

 

If you have a job and decent credit, then you can buy a house. If not, then rent from someone else. A lot of rental properties allow pets but you'll have to pay a fee. Sounds small compared to the crap you're dealing with where your dad is concerned. And if you don't get out of this, it's going to ruin your relationship with your dad, if it hasn't already.

 

If you decide to move out - which is what I think you should do - be sure to have a place lined up and then give your dad at least 30 days' notice. If it's possible to move first and pay him one month rent, then do that. Be prepared for him to whine and carry on about it, put you on a guilt trip, and kick you out immediately. Since you have nothing in writing and because he's an immature child, he's likely to do anything - which is just one more reason to get out.

 

You never know, if they foreclose on him, you might be able to buy the house. But for now, stay out of it and stop paying HIS bills.

[lifeasiknowit]

thanks for the responses.

 

It would probably be best if I just moved out and left the house for him to resolve, so I can just cut all ties with him. I did look around to see what houses I could afford to buy, but the only ones I can afford are either houses on wheels or one bedroom places. I'm only able to get by living where I am now, because of the contributions from the roommate. But with this new re-financing deal, where he'll sell the house to me for a lower price, I'll be able to afford the mortgage, and where he'll be able to use some of the money to pay off some of his debt, but my dad is being a selfish bastard, as he thinks the house is worth more. He also told me his time is being wasted, and is frustrated at me.

 

Also, when he was out of the country for several years, he basically left his accounts up to me to manage, which often went into Insufficient Funds status.

 

He's totally irresponsible, and I don't know why he can't handle his finances like an adult. When I was in school, and even now, I was struggling, but I managed to scrape by, and here he is living in an expensive house in California with his damn mistress, racking up debt, not even caring about my situation.

[Angel1111]

Then buy a house on wheels, or move into an apartment and stop trying to live a lifestyle that is putting you under this kind of stress. And stop taking on his problems.

 

You need to face the fact that your dad has no money sense and never will. You need to also recognize that he enjoys playing this game with you. And as long as you put yourself in the path of the storm, it'll keep plowing you over. Step out of the whole thing where your dad and his money is concerned. It's got nothing to do with you and it's not your problem. And stop hoping for things to get better or to be able to talk sense into him. You're just going in circles with him and that's the way it always will be with him. The sooner you recognize this situation for what it is, the sooner it will get resolved for you.

 

There's no need to explain it to him, either - make a decision, let him know about it and follow thru with it. Your lack of willingness to engage in any discussion or argument about it will speak for itself. And so will your lack of willingness to be in this situation.

 

And don't buy into the fact that once you tell him you're out, that he is suddently going to deal with it. Let him know that you're not changing your plans and that if anything actually changes down the road - like the house being put in your name - you'll talk then. He's playing games and they'll never end until you stop letting him engage you in them.

[Mary3]

Your father has no respect for you at all. He has you paying his mortgage and he ignores his debts. I agree with the Posters that you need to move out. Let your father sink. You know he is going to file BK because he has all that debt.

 

Your credit is good. Let that work for you. Lots of foreclosures banks are giving the houses away now.

[Konfuzion]

Its a crappy situation but your dad is the owner and you are the renter. He can sell the house and you would have to move... Next time make sure you have a written contract that covers you.

[MN randomguy]

Listen to Angel,

 

One term you might need to become familiar with is a term we learned in business school that term is "sunk cost" This is the time and energy that you've put into the house. You can't get it back so you can't make decisions based on them.

 

Its hard to hear, but your dad is a tool.

 

Do you have a good roommate? If your roommate is helping you pay this mortgage would they be open to moving with you? And, yes. There are places to rent that take pets. Its not that uncommon.

 

In this situation I also agree with riding out your current situation. Don't pay the mortgage and let it go into foreclosure. Take your 6 months of free rent. If your dad shows up and complains, kick him in the 'nads and ask him how much fun he's having playing his game.

[lifeasiknowit]

Thanks for all the replies. I know my story is not uncommon which makes it not the most interesting post, but the story continues.

 

I've found a place to rent with my roommate that allows the dog, and we have paid the security deposit today. The place is a basement suite of a home, and it isn't that great, but it's decent and we pay about 500 dollars each in rent including the cost for gas/water/electricity. It's small and clean, and we have a backyard.

 

But my dad with his horrible timing, emailed me today about this ad he saw on Craig's List about someone who wants to swap houses, which makes me think I have another way out. I don't know if this is legit or common, as I've never heard of this kind of thing before, but the content of the ad looks like this:

 

I am looking to start my life with my future wife, and we are buying a house together. But first, I need to get rid of my current dwelling. If you want to downgrade to a very nice, upgraded townhouse, this could be a great opportunity for both of us to save real estate fees! I'm looking for a house worth less than $375,000, and prefer a garage.

 

My dad is thinking me and my roommate can downgrade to this townhouse/condo while the other guy upgrades to our detached home, and the positive difference in values of the two places will go towards paying off his huge debts.

 

How does this kind of process work? Should I just ignore my dad's ideas and emails, and just go ahead with my plans? His proposition sounds too complicated, and I don't know how feasible it is.

 

This situation is seriously stressing me and my roommate out to the point where we are tense and getting on each others nerves.

 

HELP!!!

[Trimmer]

He's totally irresponsible, and I don't know why he can't handle his finances like an adult.

Because he hasn't had to - you've been taking care of it for him. You're enabling his irresponsibility. I'm not criticizing you for it - who wouldn't look out for family - but clearly he's not looking out for you, is he? At some point you have to decide to become your own, independent person and let him handle his life in the brutal, real world. In a way, your roles are reversed - he's the one who needs to learn how the world works, and you are the one covering for him, a role usually performed by the parent.

 

It would probably be best if I just moved out and left the house for him to resolve, so I can just cut all ties with him.

I think you need to hold to this idea, as I think in the long run in your life, this decision is going to have more impact and affect you more deeply than the decision of where you are going to live next.

 

My dad is thinking me and my roommate can downgrade to this townhouse/condo while the other guy upgrades to our detached home, and the positive difference in values of the two places will go towards paying off his huge debts.

Now, it may well be a valid deal, if all other things were neutral, but you must approach this with the realization that he is looking at this as a way to serve his best interests. He's not looking out for yours. So your skepticism is well-founded.

 

Also, the "difference in values" only helps your dad (i.e. represents available cash) if there is a significant amount of equity in your current property, which would be partly "harvested" in the deal. I'll explain further below.

 

How does this kind of process work? Should I just ignore my dad's ideas and emails, and just go ahead with my plans? His proposition sounds too complicated, and I don't know how feasible it is.

It probably would be a little complicated, as it is essentially a real-estate deal with two properties changing hands, a bunch of money changing hands to balance the deal, and three parties involved: the current condo owner, your dad, and you. I would be leery of trying to accomplish all that without professional help - at a minimum, I'd want to be represented and advised by a real-estate attorney who was representing only me, so I could be sure I was getting a clear view of the deal from an expert.

 

And if I were in your position, I wouldn't even consider it, unless the deal could be structured to end up with you holding title to the new property, without your dad having ANY connection to it, and with you holding an equity position in the property that fairly represents your prior service and sweat with respect to the current property, and a recognition of your dad's representation that the house was originally intended as a gift. In other words, you don't want to end up with a $300k mortgage on a $300k property - heck, you could go do that yourself without needing to go through a complicated deal that only benefits your dad.

 

Now, if the difference between the values of the properties is great enough, and you've got some equity built up, maybe it could be a good outcome for you, if you could get the deal all worked out to your advantage. But that all depends on how much equity is represented in the current property, because you are essentially drawing on that to pay your dad's $50k debt (and whatever else he can fleece out of the deal, probably.) And it would also require your dad to finally make good on that "gift" for you to have it in your name finally. I think it would be silly to allow him to continue to be involved.

 

What would you estimate your current property would fetch on the open market, what is the total amount outstanding on any mortgages (first, second, etc...) on this property, and what do you estimate the condo in question is worth? You need these pieces to see if the puzzle is even workable. If there isn't much equity in your current property (i.e. the mortgage is close to the market value) then you might as well just walk away - downgrading won't help you, as there's no equity (profit) to harvest in the process. Just toss out some round-number estimates and we can work the scenario; even if it's not completely accurate, you'll get the idea of how to look at it once you get better numbers...

 

And finally, I'll reiterate my earlier point - you should hold to the idea that whatever happens out of this, you want to keep a priority view toward the idea of disentangling yourself from your dad's finances. It seems like that will be an important goal to your own life.

[2sure]

The bottom line is, your Dad will still hold the mortgage and the deed to your home. It offers you no stability - just another opportunity for the same scenerio in the future.

 

Being practical there are a few considerations - unless the current house is paid for in full other than part of the 50G he owes in debt - he will not be "making" money on the trade . The money is only profit once the next house is sold. Follow? So, if there is still a mortgage being paid, there is still the chance that it will not be paid and he will fall into debt once again. If he is living beyond his means at this point, its a habit.

 

I understand that one of your biggest concerns is the dog. Its valid.

Is there any way you can get the new mortgage in your name - since your Dad previously indicated it was to be a gift? If not - you may really want to consider protecting yourself with a lease - even between you and him.

 

Next- trading a house is still a real estate transaction and will have to include closing and the transfer of mortgages - its a complete sale.

This process can be hindered and slowed by many things. And it could fall through - leaving you once again with no home.

 

Last - can you rent the apartment month to month or is it a long term lease? If the real estate transaction does go through - yiou can move depending on that.

[MN randomguy]

His proposition sounds too complicated, and I don't know how feasible it is.

 

This situation is seriously stressing me and my roommate out to the point where we are tense and getting on each others nerves.

 

HELP!!!

 

 

A continuation of the "game" for your dad. He's losing control and is risking you actually being happy. Being that he can't have that he's putting out a long shot. Don't lose your roommate over it. Don't stress yourself out. Don't walk away from this deal, RUN!!

 

I didn't read all of the details and I don't have to. Your dad is not a trustworthy person to do business with. Would you buy a Rolex from the trunk of a Cadillac because it was deal?

[Angel1111]

Your dad is constantly looking for an easy way out. It doesn't exist. This should be your rule of thumb from here on out: When your dad gets involved in anything in your life, make sure that money isn't part of the package. If it is, run. He's a child who's looking for the quick fix. Stay where you are and tell him you're not interested.

 

Then do yourself a HUGE favor. Go to Dave Ramsey's website (daveramsey.com) and find out where they're holding the 13-wk financial class in your area. It'll cost around $130 and it'll be the BEST money you ever spent in your entire life. I'm not kidding. This will give you the best start to your life that you'll ever have and, before you know it, you'll be so financially secure, you'll never again be in a position where your dad's shady deals look appealing.

[Fun2BMe]

Just because you pay rent towards the house doesn't make it yours. It's your dad's house, and you have no right to refinance it if he wants to sell it. Also, unless he signed something agreeing for you to hire an attorney, you will be 100% responsible for all the lawyer fees. It woudn't make sense for you to be doing that, especially if the lawyer doesn't even live in your dad's state.

 

Basically, you have to grow up and move out. You are paying rent, not a mortgage. Your dad can use the money to pay the mortgage or get behind on the payments and blow the money on his girlfriend. It's his. There's no contract that you had a lease-to-own arrangement. And you have no right to refinance to take equity out to pay off any of your debts - that would be stealing. And if you are voluntarily choosing to pay your father's bills, it doesn't mean you are entitled to get paid back unless there's a contract stating so. It seems like you are helping out with his bills so that you can take his house from him as payment. It doesn't work that way!

 

And if there is absolutely no apartment out there that allows a dog, then you can either be homeless or give your dog away. You can't always get what you want. I'm sure a lot of people have made sacrifices and would rather live in a house with a yard, if not for a dog, for their children to play in. And if the house does go into foreclosure, you would have to pay all in cash to buy it which doesn't sound like you have, so basically, you have to move on.

[lifeasiknowit]

Trimmer, your explanation really helped. It looks like it's better for me, if I just avoid this whole house swap deal. The whole scenario seems like a huge headache, and might not even work out in the end, and would only prolong this nightmare.

 

Fun2beme, I'm not paying my dad's bills so that I can take his house away from him as payment. I'm paying them, because he isn't paying them. The stupid thing is, a long time ago, when I first got my Visa card, he said that we'd "share" the card, meaning we'd both use it, but mostly he would contribute to the payments, since I was still a student at the time. This was before I learned my lesson. Now the credit debt is mostly from his use, and since the card is technically in my name, I have to pay it. I've been thinking of it as "his" card since it's mostly him that's been using it, but really it's my card. This is what happens when two people's finances get entangled. I've learned that any "gift" to me from him is just another way for him to use me as a bank. I'm retarded for allowing him to do it in the first place, but I didn't know that this would happen.

 

Compared to him, living in an expensive house in California with his girlfriend, I until recently was living on a poor student's budget. I took out the maximum that I could on a student loan, and lived on instant noodles until I graduated.

 

You also said that I " have no right to refinance to take equity out to pay off any of (my) debts - that would be stealing." The refinancing to help pay off some of mine and his debts wasn't even my idea. I didn't even know that I could do that. When I met up with the mortgage broker, I was just pursuing any options available to me, and that was part of the deal that the broker offered. It doesn't matter now, because my dad didn't want the deal.

 

I've already found another place to live yesterday, that's reasonable, although really small, and have put down the security deposit for it. The house swap idea was put out there by my dad (via email) literally that night when I came back from paying the deposit to the landlord, and I only wanted to know how something like that works before I continue with moving out.

 

I don't know how he's going to react being all the way in La-La land with his girlfriend when he finds out. There are too many houses already on the market with no buyers, so I don't know how he'll deal with it. It's confusing, because when I first wrote to him, telling him I've had enough and am thinking to move out, he told me not to move out. He wants the money from selling the house, while also not kicking me out, which is a contradiction to me. Oh well, I'm going, and that's it.

[Fun2BMe]

 

I don't know how he's going to react being all the way in La-La land with his girlfriend when he finds out. There are too many houses already on the market with no buyers, so I don't know how he'll deal with it.

That's kind of messed up for you to do that behind his back, after you supposedly care and have helped him out so much.

 

It's confusing, because when I first wrote to him, telling him I've had enough and am thinking to move out, he told me not to move out. He wants the money from selling the house, while also not kicking me out, which is a contradiction to me. Oh well, I'm going, and that's it.

Maybe you're giving him a guilt trip about evicting you so that he can sell the house. If you gave him a 60 day notice that you will move out, he can know to proceed with selling the house or whatever he wants to do with it, without worrying about how it'll affect you, but now you're just moving out behind his back without even notice? I don't know how any landlord would be ok with that. I rent out some of my homes, and if my tennant wanted to refi I'd get angry too since it's not their house, but being his daughter and as upset you've been about the whole thing he was at a standstill about the whole thing, but i don't understand how you are proceeding with the move out without telling him? Maybe i read it wrong being it's late and all.

[Angel1111]

That's kind of messed up for you to do that behind his back, after you supposedly care and have helped him out so much.

 

 

Maybe you're giving him a guilt trip about evicting you so that he can sell the house. If you gave him a 60 day notice that you will move out, he can know to proceed with selling the house or whatever he wants to do with it, without worrying about how it'll affect you, but now you're just moving out behind his back without even notice? I don't know how any landlord would be ok with that. I rent out some of my homes, and if my tennant wanted to refi I'd get angry too since it's not their house, but being his daughter and as upset you've been about the whole thing he was at a standstill about the whole thing, but i don't understand how you are proceeding with the move out without telling him? Maybe i read it wrong being it's late and all.

 

She's probably doing it that way because she can't trust her dad not to evict her the minute she tells him that she found a place. I do think she should pay one month before moving out, but if she can't, then she can't. Based on the debt her dad has left her with, I'd call it even. And I'd let him know about it, too, so that there would be no misunderstanding.

[lifeasiknowit]

Fun2beme: "Maybe you're giving him a guilt trip about evicting you so that he can sell the house".

 

"That's kind of messed up for you to do that behind his back, after you supposedly care and have helped him out so much."

 

I did give him 30 days notice and you have it backwards, Fun2beme. Number 1, he wants to sell the house, thus essentially evicting me, number 2, at the same time tells me to stay, perhaps because he does feel guilty, but it is not my fault that he feels this guilt. It is not my fault that he is 50,000 dollars in debt. I have helped him out as much as I can, and now realize that I can't any longer. I was stupid enough to let him use the Visa, and I just have to stop helping him. I have my own life.

 

How come this is turning into something about what a bad person I am? I am so emotional right now, that I'm literally crying at the moment. I posted here to ask for advice, not to have someone criticize my every word.

 

At the end of the day, he wants to sell the house, and I have to move out, which is what I'm doing. I am the one that would love to keep the house, but as the long, complicated thread has shown, that is not a viable situation for me.

 

I have told him I'm giving him 30 days notice, but I am not sure if he is taking it seriously. His responses have been blase and short. This situation has been going on for a few months now, so it's not like it has suddenly sprung up out of no where. He came to supposedly deal with it a few months ago, but did nothing about it and went back to living with his girlfriend in California.

 

But in answer to all of your criticisms, I have:

 

1.Managed his accounts including helping him with this payments

 

2. Notified him months earlier about either declaring bankruptcy or selling the house to me after having a notice taped to our door stating that he's being sued, hasn't made any payments to his loaners, and is 50,000 in debt.

 

3. He came, did nothing and went back to California

 

4. I presented him with the idea of selling the house to me, but he wasn't happy as he wanted to sell it at a higher value so that he could pay off his debt.

 

5. I said OK, what now? I posted on here to see what I could do.

 

6. I have taken the advice and found somewhere else to live.

 

7. I gave him 30 days notice

 

8. He tells me about this House Swap idea

 

9. I think it's better for me to disentangle myself from his finances.

 

10. I'm moving out.

 

WHAT MORE CAN I DO? nothing. Fun2beme, you only offer criticisms, but if you were in my situation what would you do? So far, I think I have acted without my own interests in mind, but you seem to imply that I've been acting selfishly.

[lifeasiknowit]

And I have paid for this month. Why wouldn't I have, since I've been doing more than that ever since I've been living in the house.

[lifeasiknowit]

I also understand that he's in a bad situation, but a person doesn't suddenly end up with a debt of 50,000. This is a man who left wife 1, for wife 2, for his current girlfriend. He's living it up in California and so he has distanced himself from what I have to deal with. Also, I have been really civil with him about it. When he came to "deal" with the situation several months ago, and stayed at the house, I didn't express my frustration. He went away saying "I'll figure something out", but never did. I feel like I'm defending myself, here, but I should stop. I am losing sleep over this, so I should go to bed. I don't need any more stress.

 

Anyways, thank you to you all for your advice, and I think I'll be able to handle it now.

[CoryCosmetics]

---- wrong post

[Angel1111]

You're letting someone who obviously hasn't read the entire story get to you. Anyone who understands this situation can see that your dad continually plays games with you - particularly where money is concerned. You don't have to defend yourself to anyone.

 

I think you've done extremely well considering the circumstances and considering that the struggles you deal with involve your dad - which throws a LOT of emotion into the situation right off the bat. You've done great with finding a new place, making the move, etc. Plus you seem to realize that this new 'deal' of his is overly complicated and will probably create new problems - even though you're emotionally attached to that house and would love to have it. You're no dummy by any means, nor are you being mean or inconsiderate to your dad. Despite the fact that he sucked you into a ton of debt, you didn't see that coming and couldn't have known he'd do that to you. So don't beat yourself up about it.

 

You're going to get through this fine because you're a smart girl. Once you get clear of all this stuff with your dad, I think things will go so much smoother for you.

[MN randomguy]

You're letting someone who obviously hasn't read the entire story get to you. Anyone who understands this situation can see that your dad continually plays games with you - particularly where money is concerned. You don't have to defend yourself to anyone.

 

I think you've done extremely well considering the circumstances and considering that the struggles you deal with involve your dad - which throws a LOT of emotion into the situation right off the bat. You've done great with finding a new place, making the move, etc. Plus you seem to realize that this new 'deal' of his is overly complicated and will probably create new problems - even though you're emotionally attached to that house and would love to have it. You're no dummy by any means, nor are you being mean or inconsiderate to your dad. Despite the fact that he sucked you into a ton of debt, you didn't see that coming and couldn't have known he'd do that to you. So don't beat yourself up about it.

 

You're going to get through this fine because you're a smart girl. Once you get clear of all this stuff with your dad, I think things will go so much smoother for you.

 

+1

 

 

Fun2beme obviously hasn't read the whole thread.

 

What doesn't kill you makes you stronger

 

Hoo Rah!!