Need Help for a long time friend with spending issues.

[ivinsfan]

I'll try to be brief, ask questions if you need clarity. And yes it really is for a "friend"


He is 69 YO.


In complete denial about being flat-### broke. Has a paid off house maybe in the 600K region. Drives a 50K pickup which he took a big personal loan against. Only income after 10 years of BTD is a net after Part B of about 800 a month in SS. 500 of that goes directly to his truck payment.



By my reckoning has spent about 1.8 million dollars in the last 10 years. Around 850K for the house he lives in. His actual problem is he is addicted to consumer spending. He had a rough childhood and his endorphins come from having high quality stuff. Never been married and not close to sibs because of their childhoods.



He's been telling us for 3 years he is going broke. This was after he confessed he hadn't filed a tax return since 15 because he pulled money from his IRA to buy a high end stereo system (think 40K) and then owed income tax and payback on his ACA subsidy. Didn't have the cash so didn't file.


Long story short he called this morning he has maxed out his personal overdraft loan at his bank resulting in all his CC cards being frozen because of missed payments. Probably owes 20K on those.



Myself, my DH and another close personal friend have told him for the last 3 years he needs to sell his house. clear his debts and then move on with the rest of his life. He says he knows that, but he just won't sell his house, excuse after excuse.



Anyway he asked for a small "loan" and then if I would help him look into government programs such as SNAP, heating assistance to help him get by. At this point none of those programs are going to fix his issues. I don't even mind "giving" him some money but at this point it feels like enabling.



The taxes alone for his house run about 900 a month so nothing we could do will really help.


He's really been a good friend for many decades. He has anxiety issues and fairly severe diabetes.



What would you advise we say/do to actually help him move on from here and make some hard financial moves.


I realize it's a combo financial/mental problem and could use some pointers from anyone who has been where we are now.

 

[Walt34]

Until this guy admits to himself that he has a problem there's probably not much anyone else can do for him. Good luck.

 

[ivinsfan]

Until this guy admits to himself that he has a problem there's probably not much anyone else can do for him. Good luck.

I know this ended your first marriage so you have some experience. How is it possible to start someone down the road to admitting they have a problem?


He needs a fill of insulin, is going to get his phone cut off and is eating out of his pantry. It feels hopeless not to mention stressful when I talk to him...if you hit rock bottom and still can't figure it out what happens then?

 

[Aerides]

I would put together a list of resources, as you mention SNAP and Gov resources. Put them all in one doc with numbers and web sites and such, especially if there are any remotely local offices. And yes perhaps includes some mental health counseling services on that list.

I would not loan him anything, and even if you gift some sum, you know there's a high likelihood he'll come back again with another request. Either a loan or a gift would almost certainly sour the friendship.

 

[Walt34]

I know this ended your first marriage so you have some experience. How is it possible to start someone down the road to admitting they have problem?

If I knew the answer to that I'd be rich, famous, and probably nominated for knighthood, sainthood, and a Pulitzer.

 

[ivinsfan]

I would put together a list of resources, as you mention SNAP and Gov resources. Put them all in one doc with numbers and web sites and such, especially if there are any remotely local offices. And yes perhaps includes some mental health counseling services on that list.

I would not loan him anything, and even if you gift some sum, you know there's a high likelihood he'll come back again with another request. Either a loan or a gift would almost certainly sour the friendship.

At this point it would be a gift in our minds that's a given. I guess I could have said he came to us for help and has no family to turn to and I have to resign myself that if the worst happens it's not my fault.

 

[ivinsfan]

If I knew the answer to that I'd be rich, famous, and probably nominated for knighthood, sainthood, and a Pulitzer.

No kidding...you wouldn't be posting here that's for sure..I know there is no magic bullet.

 

[REWahoo]

If I knew the answer to that I'd be rich, famous, and probably nominated for knighthood, sainthood, and a Pulitzer.

Don't settle for anything less than the "Noble" Prize.

 

[RetiredHappy]

Since I am not able to fix him, I would call Adult Protective Service on him. This is called self neglect and hopefully social worker can help out of his troubles. Potentially, a court appointment would be filed by the social worker and to take over his affairs.

 

[finnski1]

It's obvious he needs to sell the house and the truck ASAP. As bad as it is it could get a lot worse if he lost the house due to tax liens. He is sitting in 600k equity. Sell that and he could rent a decent apartment for $1200(depending where you live ) and actually be doing ok for several years. There is no other solution that I see.

I know this is obvious to many on here but it has to be done even in the form of some sort of intervention?

 

[NW-Bound]

... Has a paid off house maybe in the 600K region. Drives a 50K pickup which he took a big personal loan against. Only income after 10 years of BTD is a net after Part B of about 800 a month in SS. 500 of that goes directly to his truck payment.

By my reckoning has spent about 1.8 million dollars in the last 10 years. Around 850K for the house he lives in...

So, his income is $300 in SS after Part B and the truck payment. It sounds like the truck is going to be repo soon.

What your friend wants is for somebody to come up with $95k/year for him to continue to live the way he does ($1800K minus $850K over 10 years).

Anything less would just delay the inevitable. The sooner he sells his home, the better.

What I am curious about is how he got that $1.8M in the 1st place? Inheritance? Or perhaps he made that money himself, but lost his marbles in recent years?

 

[sweetana3]

You have already given him the benefit of your knowledge on how to solve his issues. He has ignored. He is an adult.

Rinse and repeat your solution and let him make his own decisions. A loan will not solve anything.

If you want to gift him something ask him what he emergency need he has and get that. For example, if he needs some gas, get a gas card or food, get groceries. He has no ability to handle money.

 

[ivinsfan]

It's obvious he needs to sell the house and the truck ASAP. As bad as it is it could get a lot worse if he lost the house due to tax liens. He is sitting in 600k equity. Sell that and he could rent a decent apartment for $1200(depending where you live ) and actually be doing ok for several years. There is no other solution that I see.

I know this is obvious to many on here but it has to be done even in the form of some sort of intervention?

This is the solution we came up 3 years ago and nothing has changed. Since then he bought a brand new pickup. I know it's going to end badly.



We can intervene but we can't sell his house ...


I'm trying to decide how much personal involvement I want ...or at what level I just say I did what I could.

 

[ivinsfan]

You have already given him the benefit of your knowledge on how to solve his issues. He has ignored. He is an adult.

Rinse and repeat your solution and let him make his own decisions. A loan will not solve anything.

If you want to gift him something ask him what he emergency need he has and get that. For example, if he needs some gas, get a gas card or food, get groceries. He has no ability to handle money.

I will pay his cellphone bill for him too but directly to Verizon.

 

[candrew]

Your friend likely won't see the light until he hits rock bottom. In light of what you have previously described in terms of his situation to date, one has to wonder how much farther he needs to slide before that happens. I think you are smart in only offering to *give* him some $$ as you understand full well that you'll never see it again. OTH, if you withhold financial assistance you may end up doing him a favor in the long run by bringing that rock-bottom up a bit.

It must be difficult to witness such self-destructive behavior on the part of someone you obviously care dearly about. DS & I have had to witness our younger brother as he spirals with addiction issues. It can be difficult at times to resist the urge to rescue....

 

[ivinsfan]

So, his income is $300 in SS after Part B and the truck payment. It sounds like the truck is going to be repo soon.

What your friend wants is for somebody to come up with $95k/year for him to continue to live the way he does ($1800K minus $850K over 10 years).

Anything less would just delay the inevitable. The sooner he sells his home, the better.

What I am curious about is how he got that $1.8M in the 1st place? Inheritance? Or perhaps he made that money himself, but lost his marbles in recent years?

Mostly inheritance but he farmed for decades and cashed out his profits, cashed out his 401 and cashed out every single thing he had. The death of his Dad really put him in a tailspin..

 

[NW-Bound]

Mostly inheritance but he farmed for decades and cashed out his profits, cashed out his 401 and cashed out every single thing he had. The death of his Dad really put him in a tailspin..

I am no psychologist nor social worker, but it sounds to me this is a case of a mental problem that manifests itself as a financial one.

More money will not help the root cause.

 

[ivinsfan]

I am no psychologist nor social worker, but it sounds to me this is a case of a mental problem that manifests itself as a financial one.

More money will not help the root cause.

Exactly right. He's not willing to admit any of this at this point. But his calls for help are pretty stressful to me.

 

[Sunset]

OP - don't give him money as it won't help at all. If you give him $4,000 it will be sucked away in 2 weeks just by the things he owes & needs (even if he had control not to spend on a want).

Unless you are planning to literally give him around $40,000 per yr , for many years, it won't be a help.

He turned to you because his Credit cards and bank cut him off, so now he has no more money to spend/pay for things.

I had this situation with my Sister, she only turned to me after the CC's had turned her down and the bank refused to renegotiate her mortgage due to her HIGH debt.

A person in this situation is probably lying to you about the amount of debt and it's probably a LOT more than you think.
They will also tell you anything (lie) so that you "loan" (give) them the money to just get through this week ( will be back next week).

He needs to sell the house BEFORE it is LOST due to non-payment of taxes..
He also needs to sell the TRUCK and all the other fancy stuff he has bought over the past 5 yrs.

This person cannot even do a reverse mortgage, like a normal person. Pretend He did a reverse mortgage and got $300K out of it, the money would be gone in 3 yrs and then he would LOSE the house.

The excuse of a poor childhood, is just an excuse. My childhood was so poor that Mom would send me to the local butcher to get FREE chicken wings and beef bones. We ate BBQ chicken wings every night all summer because it was FREE meat. The bones were for soups for lunch. We had so many bones coming out of the ground from the dog burying them after that soup, that the property looked like a graveyard

 

[yhoomajor]

imho: best possible scenario for your friend (if not for us) is to declare bankruptcy and discharge all Debt. As much debt as possible. That is the American way. For good or bad.

I am not here to debate morality of it. You don't have to give him money if you don't want to ( I personally would give some if he was a good hearted person in all other aspects of life, but that's just me). But don't expect it to be paid back if you do.

If you want to help him in other ways - he might be eligible for several Government programs or benefits for mental health issues or poor people. So that would be one way to help him and guide him towards those avenues of help. There may be some ways he can keep his house. 69 is too old to generate new source of income and revenue. I personally get depressed thinking about mental health issues in humans. So I try to err on side of compassion in such scenarios.

 

[Sunset]

Maybe he could declare bankruptcy to wipe out the CC and loans or at least zero out the interest rates.. He sure does NOT need a credit score for borrowing.

He maybe should call a bankruptcy lawyer.

 

[finnski1]

This is the solution we came up 3 years ago and nothing has changed. Since then he bought a brand new pickup. I know it's going to end badly.



We can intervene but we can't sell his house ...


I'm trying to decide how much personal involvement I want ...or at what level I just say I did what I could.

I understand. I was just spouting off a little in disbelief. It sounds like it is going to end badly for him. good luck

 

[Walt34]

I feel bad for you trying to help with something that likely has no good solution, but other than what others have already suggested I can't think of anything additional. Just keep self-preservation in mind so you don't get sucked into the mental abyss yourself trying to help someone who is not yet ready to accept the help that is needed.

 

[Golden sunsets]

I imagine he owes the IRS bundle.

Unfortunately even if he sold his house and paid off his debts, it doesn't sound like he'd change his ways. I imagine he'd p*ss through the balance. I wouldn't enable him. Time for tough love. An occasional free meal along with the tough love and send him on his way.

 

[CardsFan]

This sounds like a mental health problem, and needs that kind of attention, if he will seek it. From personal experience with my brother, I suspect your friend will crash and burn before he seeks that kind of help.

I hope I am wrong. But I don't see a pleasant outcome unless he agrees to sell the house and truck ASAP. And, if it is mental illness, I suspect he will accuse those around him of trying to steal his house and truck. He will borrow against the house, use that money for spending and to make payments for a while, and then it will be repossessed. Been there. Not a pleasant outcome.

Sorry you need to deal with this. Maybe you and he will be lucky and he will see the obvious. But if he does not, all you can do is slow the spiral, not stop it.