BIL's Brother - 64, financial straits, how to advise?

[SunnyOne]

My brother in law's brother is in a financial mess and my BIL, knowing I am a student of personal finance has asked for some guidance to pass onto him.

I am at a loss here. In short, the guy is 64 and divorced with 6 adult children on their own, their mid 20s-mid 30s.

Ex wife is recently deceased. It appears that $30K of back child support pushed him underground and unbanked. He had been getting paid cash to work the sound board and other tasks at a night club now shuttered due to COVID. This is how he has been supporting himself for several years on his own, renting a room from a friend.

There is also some debt to the IRS, but no other debt.
Emergency fund is now decimated due to 6 months out of work. Was unable to qualify for stimulis, due to life in the shadows.

At the very least, I think he should try to apply for emergency food assistance, but I don't know how that is done.

I asked about his wife's work history - apparently she worked for a long time in a public library, so I encouraged him to look into Soc Sec based on her record and their long marriage, but he is concerned that the state will just take money to pay down the back child support.

I feel as if at age 64, he needs to come out of the shadows and try to see about clearing out that debt, particularly since the ex spouse is deceased?

Any suggestions to give him so he doesn't end up on the streets? Child support is not an area I am familiar with.

Apparently, whatever money he once had, he says went to pay college tuition for some of his children, so that was on top of whatever child support he was paying until things fell apart for him.

 

[EastWest Gal]

County welfare office to apply for SNAP and maybe even short term cash assistance. He should indeed apply for Social Security through his deceased wife. Maybe he can work out a payment plan to pay off his child support debt. He owes those kids. It beats ending up begging on the streets.

 

[Letj]

I am assuming he lives in VA. If so, have him apply for covid unemployment as a gig worker. He will get it retroactively fairly quickly and get a large lump sum. He should get at least $758 a week from April 4th ($158 is what the state gives if you’re a gig worker/self employed and $600 from Pandemic assistance). His back child support won’t be an issue to get the unemployment. First he must apply for regular unemployment. They will deny him and then he can go to the link for the PUA and apply. He will then have to file for all the back weeks. Here’s the link for Virginia. I am not sure how other states work but he can look into it if he doesn’t live in VA. https://www.vec.virginia.gov

 

[latexman]

To have sunk so low, he should get a mental health check-up too. I'd suspect depression, which is rampant these days. He's only 1 year away from medicare. Get him lined up for that too.

 

[Aerides]

I am at a loss here. In short, the guy is 64 and divorced with 6 adult children on their own, their mid 20s-mid 30s.
Any suggestions to give him so he doesn't end up on the streets? Child support is not an area I am familiar with.

You can't fix this. You can give him county/state services info, and suggest he start with pursuing welfare, snap, medicaid, and assisted housing.

 

[gauss]

Does he have any Social Security coming based on his own employment history?

If so, perhaps defer that until age 70 and in the meantime collect based on the former spouse if possible.

Also, how much does he owe the IRS? I don't think that it is too late to get the stimulus payment assuming he is willing to settle the IRS debt

-gauss

 

[ERD50]

I am assuming he lives in VA. If so, have him apply for covid unemployment as a gig worker. ...

But if he was taking money under the table, he can't prove he was employed, so can't make an unemployment case either (I assume).

... It appears that $30K of back child support pushed him underground and unbanked. He had been getting paid cash...

You shouldn't be able to have your cake and eat it too - dodge taxes and responsibility by getting paid under the table, and then want the benefits that come from taxpayers when you run into trouble.

He needs help, but also needs to take responsibility.

-ERD50

 

[pb4uski]

I'm confused... wouldn't any back child support be owed to his ex's estate and be inherited by his adult children? Could/would these adult children effectively forgive the debt rather than see dad out on the streets?

 

[gauss]

I'm confused... wouldn't any back child support be owed to his ex's estate and be inherited by his adult children? Could/would these adult children effectively forgive the debt rather than see dad out on the streets?

+1 I was also wondering about this case, especially if a significant portion of his funds went towards financing their college education(s).

-----
Regarding back child support and Social Security -- Does anyone know how much could be garnished? It may not be 100%. Is it limited to 15% or could it be more?

-gauss

 

[Gumby]

You shouldn't be able to have your cake and eat it too - dodge taxes and responsibility by getting paid under the table, and then want the benefits that come from taxpayers when you run into trouble.

He needs help, but also needs to take responsibility.

I agree. There are programs in place to help prevent him from starving in the street (SNAP, cash assistance, Section 8 housing assistance). He should apply for all of them. I pay my taxes so that aid will be available to those who need this assistance. At the same time, he has his own long-overdue reckoning with the tax man, at the very least.

I don't know about the child support issue. It depends on the state and how things actually worked out due to his failure to pay. In Connecticut, if the custodial parent takes any public assistance at a time when the non-custodial parent is failing to pay court ordered child support, the state attorney general will seek to garnish any and all assets of the delinquent non-custodial parent as necessary to reimburse the state.

Potentially, the ex-wife's estate could pursue him for delinquent child support - I don't know - but if so, it probably would be the executor's decision and duty to do so, not the beneficiaries. And the beneficiaries probably could not forgive or release the claim.

 

[Rushmore]

I’ve found it amusing when my financially irresponsible friends ask for my advise. Particularly friends who are older...how did I get where I am today? I didn’t buy things I couldn’t afford.

Recently a friend confidently in me that her rent is $500 per month more than her monthly income(just social security) and she has less than 50k in other assets. And that’s just the rent..she still has all her other living expenses. She wondered what I would do...she can’t give up her apartment. Her apartment has 10 foot ceilings, fireplace jetted tub etc. I am really not the person to ask what I would do. I wouldn’t have gotten myself into that mess.

 

[cargetter100]

My brother in law's brother is in a financial mess and my BIL, knowing I am a student of personal finance has asked for some guidance to pass onto him.

I am at a loss here. In short, the guy is 64 and divorced with 6 adult children on their own, their mid 20s-mid 30s.

Ex wife is recently deceased. It appears that $30K of back child support pushed him underground and unbanked. He had been getting paid cash to work the sound board and other tasks at a night club now shuttered due to COVID. This is how he has been supporting himself for several years on his own, renting a room from a friend.

There is also some debt to the IRS, but no other debt.
Emergency fund is now decimated due to 6 months out of work. Was unable to qualify for stimulis, due to life in the shadows.

At the very least, I think he should try to apply for emergency food assistance, but I don't know how that is done.

I asked about his wife's work history - apparently she worked for a long time in a public library, so I encouraged him to look into Soc Sec based on her record and their long marriage, but he is concerned that the state will just take money to pay down the back child support.

I feel as if at age 64, he needs to come out of the shadows and try to see about clearing out that debt, particularly since the ex spouse is deceased?

Any suggestions to give him so he doesn't end up on the streets? Child support is not an area I am familiar with.

Apparently, whatever money he once had, he says went to pay college tuition for some of his children, so that was on top of whatever child support he was paying until things fell apart for him.

The only advice you should give him is that if he needs financial assistance or advice, he should ask his six adult children for it. That's it.

This guy isn't even your brother in law. He's your brother in law's brother.

Also, dude is a child support evader/scoff law, hence law-breaker, and since his kids are adults, this arrearage is counted in decades most likely--and tax evader (working off the books job). He is probably a druggie too or alky based on the type of job he has been working most recently. This is precisely the type of self-destructive loser/nimrod for whom all of your good hearted efforts to help would be totally wasted. Plus you risk being embroiled in his drama and blamed somehow.

Do you think there might, just might, be a reason this dude can't get help from any one of his SIX ADULT CHILDREN nor any one else in the family who is actually related to him (even as an in law, which you are not)? Dude has thoroughly burned all available bridges.

Definitely not your circus nor monkeys.

 

[Letj]

But if he was taking money under the table, he can't prove he was employed, so can't make an unemployment case either (I assume).







You shouldn't be able to have your cake and eat it too - dodge taxes and responsibility by getting paid under the table, and then want the benefits that come from taxpayers when you run into trouble.



He needs help, but also needs to take responsibility.



-ERD50

Even so he will still qualify. He just has to declare that he is self employed.

 

[daylatedollarshort]

As others have suggested, he should consult the senior services agency in the city or county for which he lives for senior housing help, unemployment eligibility, Social Security eligibility, Medicaid eligibility, SNAP benefits and whatever they offer. He should qualify for SNAP, but if not he can get food from a county, church or non-profit food bank. Senior and low income services vary by locale, but in our area they are amazing extra discounted produce at the farmer's market for SNAP recipients or seniors, Medicaid, senior clubs with all sorts of services and activities, low door to door senior bus services or free Uber, discounted or free phone services, utility help, and much more. The libraries have free passes for all sorts of cultural activities, movies to borrow or download for free, free music, audio books, online courses, books and ebooks. Some of our local senior centers have a roommate matching services where seniors with home rent rooms to other seniors. Or maybe if he s healthy he could find a room in return for yard work and household help.

Plus perhaps he could find some other part-time work or at least do odds and ends (Reddit beer money) tasks on the Internet for extra income. There are some industrious souls on the Reddit beer money forum who make over $1K a month without regular jobs doing odds and ends kind of Internet tasks like mTurk, surveys, ink recycling, get paid to apps and watching videos for gift cards. The pay is low per hour, but for retirees or college students with more time than money it works for many of them.

I've looked into this as I have some relatives who may need the same kind of help some day. I think with enough research and applying for services, Social Security, Medicaid / Medicare, taking advantage of community and library services, plus odds and ends income, they could have a fairly decent standard of living.

 

[Chuckanut]

While I feel sorry for the state of this man's life, I also will feel sorrier if you get drawn into it and end up being the new 'source' of his problems. I think applying for SS, Medicare and food aid is about as far as I would go with recommendations. Perhaps you can help further but be very careful. Six kids sounds like he has plenty of family help available.

Based only upon your description, the man may be a Crazy Maker.

According to Julia Cameron: "Crazymakers are those personalities that create storm centers. They are often charismatic, frequently charming, highly inventive and powerfully persuasive. And for the creative person in their vicinity, they are enormously destructive.

Article Source: http://EzineArticles.com/1584613

 

[cathy63]

He absolutely should file for SS on his ex-wife's record if he's eligible. Even if both the IRS and state garnish it for the back taxes and child support, there's a maximum percentage that they can take. He might not get enough to live on, but he would not get $0.

 

[Retire52]

aside from how irresponsible he is to get himself into this fix as it was righteously covered by some of the posters above, I think pointing your BIL to get his brother started with the county social services is a good step. this should asst with food, housing and med.

I'm thinking, he would need to come clean with the IRS and the court on the back child support, if he has any chance of getting SSN, his wife's or his.

all of the above may take a while to establish, so in the short term, he will need to rely on the charity of family and friends. maybe your BIL maybe the temp solution in this regard. since his brother's income was affected by the pandemic, and as the economy opens up again, he should be able to return to his old line of work, so he is looking at around 6 months maybe.

a friend of mine had a father that never saved and as his a ability to work diminished, she and her brother bought him a trailer at a trailer park and he lived on his SSN and any work he could find.

 

[pb4uski]

He absolutely should file for SS on his ex-wife's record if he's eligible. Even if both the IRS and state garnish it for the back taxes and child support, there's a maximum percentage that they can take. He might not get enough to live on, but he would not get $0.

+1 plus while it is a long-shot but did the ex have a pension and did he have any rights to it as part of their divorce decree?

 

[ERD50]

Even so he will still qualify. He just has to declare that he is self employed.

If you are self-employed, don't you report your income and pay your taxes? I would think (and hope) that he'd need to prove his income through legitimate means, and not just "declare" that he was employed and expect unemployment payments.

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.
...

Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners.

You have to file an income tax return if your net earnings from self-employment were $400 or more.

-ERD50

 

[SunnyOne]

Thank you for the replies. They are very much appreciated. Here are some further details:

He is the brother of my sister's husband. He is a life long resident of the state of NY.

He has always worked, but had mostly low paying, semi-skilled jobs. From what I can tell, one of his biggest errors in judgement was having so many children on a low household income in a suburb of New York City. He says that all his income went toward paying for child support for 6 children, while also paying for college for some of them and trying to pay his own living expenses. At some point, it all became overwhelming. Also from what I can tell, he has always lived a sparse lifestyle, with very simple tastes. About the adult children, they are all either food service workers or other low paying jobs while trying to make side incomes from their art. I believe we can say these folks all fall under the umbrella of starving artists. These are not situations that we here would find ourselves in, but apparently these people are out there...not trying to sound too harsh nor make excuses.

 

[daylatedollarshort]

a friend of mine had a father that never saved and as his a ability to work diminished, she and her brother bought him a trailer at a trailer park and he lived on his SSN and any work he could find.

I'd be willing to spring for a trailer, solar cabin or tiny house, too, if a relative needed help, plus help with social services applications. Add in some odds and ends or beer money type work, if they could do it, and most people would have food, shelter and basic medical care covered.

 

[SunnyOne]

Housing is not a major issue for him right now. Apparently, the friend he lives with has been forgiving any rent due during the COVID situation and not eager to collect. It seems he is a caretaker for the home and runs errands, does lawnwork in exchange for either cheap rent or no rent. Primary concerns are paying for gas, food, car insurance, the basics.

 

[The Cosmic Avenger]

He absolutely should file for SS on his ex-wife's record if he's eligible. Even if both the IRS and state garnish it for the back taxes and child support, there's a maximum percentage that they can take. He might not get enough to live on, but he would not get $0.

Even if they took 100% to pay the arrears, that's money that he's not getting now, and it would eventually eliminate the arrears! This is the kind of thinking that gets people into financial trouble, letting emotion make the decision (his fear or trepidation over filing, or possibly depression as someone else mentioned) instead of math.

I'm sure you're right, cathy63, but even if the percentage is high, SunnyOne, you can explain it as "found money" that will help get that debt off his back.

 

[daylatedollarshort]

Housing is not a major issue for him right now. Apparently, the friend he lives with has been forgiving any rent due during the COVID situation and not eager to collect. It seems he is a caretaker for the home and runs errands, does lawnwork in exchange for either cheap rent or no rent. Primary concerns are paying for gas, food, car insurance, the basics.

If he lives in a city with public transportation and Uber, does he need a car? Most of the local senior centers here have door to door senior pick up for something like $1 a ride, and a couple of the suburbs even have Uber free for seniors when the buses aren't running. Plus seniors can buy deeply discounted public transportation passes. Seniors here can get picked up at home for a dollar or two to go to the senior center, and then get a free lunch at the senior center, which really is enough food for more than one meal, if not the whole day. The centers are closed now due to the pandemic, but at least one center has frozen meals seniors can pick up for the week at a nominal cost.

I think with no or limited income he will have to start living more like a broke college student, only with senior social services, and many college students can't afford cars.

 

[Teacher Terry]

So many of you are jumping to conclusions that probably aren’t true. He was helping his kids with college so doesn’t sound like a bad guy. This was misguided as he probably should have paid his support instead. If his kids are the heirs to the back child support they should forgive it. AARP has programs where they pay people from a grant to work at various businesses for 20 hours a week. When I worked for the state we had some of these seniors and it didn’t cost the state a thing.