My parents came to me about two years ago and asked me for help. They had credit card debt spread over about 6 different cards that totaled about $24,000.00. They are both 75+ and have a steady income of about $2,000.00 a month; they own their home (worth about $60,000.00) and car, but I was not able to secure them a loan with any bank (home equity or otherwise) because their credit scores were in the mid 500’s. They were paying their minimum amounts that totaled about $300 a month (sometimes not on time, hence the credit scores), but they weren’t getting anywhere.
With all that said, I decided to help my parents by taking a loan out in my name. I was the only one of my 2 other siblings that was in a position to help them. They have been paying me the monthly payments of about $215 a month. The loan is spread over 20 years, as they were not able to afford a larger payment if I selected a lesser loan term. I always knew that I would be able to recover the money and pay the loan off in-full when my parents went to the big bingo hall in heaven (they both like the game).
Until recently I thought I had all my bases covered. That is until I saw a commercial on TV about two parents and a lawyer having a sidebar conversation about having someone sue them for their personal property because their auto insurance liability coverage was not high enough (their son was driving the car). That’s when it dawned on me that I didn’t have all my bases covered. Then I started thinking about other types of liens that could be put on their home that would not allow me to recover the money to pay off the loan.
Armed with this new information I went to my parents to ask them to put the house in my name. (I have a one-million dollar liability umbrella policy because I own a few rental properties.) Well my parents weren’t going for that idea… They asked if there was a way to document this transaction in their will or if there was alternate way to ensure I get paid for this loan.
Please let me know my/our options. Thank you in advance.
