topic Re: Getting out Debt (Bad Situation) in Personal Finance

Getting out Debt (Bad Situation)

STChi — Wed, 26 Nov 2025 23:48:34 GMT

This year has been extremely difficult for our family due to a major health crisis involving an elderly parent (almost 80) who has no retirement resources. We’ve been supporting them financially for several years, and the situation escalated after a serious fall this summer. In the immediate crisis, we relied heavily on credit cards to manage medical-related expenses, a secondary, out-of-state household (for the elderly parent), childcare, and day-to-day costs.

We are now trying to get ahead of the debt that’s accumulated and are looking for guidance on how to create a realistic pay-off plan without damaging our credit and maintain certain parts of our lifestyle (e.g., schooling for kids, etc.) (although we will certainly be tightening our belts).

Household/Financial Background

High-income household with two children. Combined salaries: ~$650k/year, plus an expected bonus of ~$100–175k in April (netting ~$60k-100k).
Both of us work extremely demanding jobs (big law associate + small-firm partner), so we rely on paid support: nanny, house cleaner, and private school. We are actively reducing some of these expenses where possible.
Total consumer debt: ~$200k (credit cards, personal loans, and 401k loans). Mortgage ($400k) and student loans are low-interest and manageable ($400k). We had taken on some debt years ago that we were in the midst of paying off before this nightmare started.
Amex balance is currently ~$50k. Because our spending often exceeds the limit monthly, we end up carrying and re-charging about $20k each month, and we cannot seem to break this cycle.
We contribute $1-2k/month to support the elderly parent in addition to covering unexpected crisis expenses this year ($30k). We have no insight into their finances and it's a total financial drain.

Cost-Reduction Efforts Underway

Tightening budgets for groceries, transportation, household services, etc.
Evaluating the possibility of selling our current home due to rapidly increasing HOA fees (up $700/month since we purchased 5 years ago (to $2,500k!, with another increase expected).

We need suggestions for how to:

Create a practical, long-term debt repayment strategy that avoids harming our credit.
Break the revolving balance cycle on Amex. Should we get a personal loan and just wipe it out entirely? Debt consolidation to wipe out the Amex and other personal loans.
Decide whether debt consolidation, a line of credit, or restructuring certain payments is advisable given our income and goals.
Identify anything we might be overlooking now that the crisis has passed.

We’ve been trying to prevent things from spiraling, but we’re reaching a point where the stress is overwhelming. Any guidance from people who have navigated something similar—or professionals who have insight into high-income/high-expense debt recovery—would be greatly appreciated.

Re: Getting out Debt (Bad Situation)

FicoMike0 — Thu, 27 Nov 2025 05:33:49 GMT

Wow, that's a lot to deal with. Here's my non professional advice, if you're paying credit card interest, get a personal loan, 2nd mortgage or a loan shark to eliminate that drain. If you have the equity, a heloc might be the best rate.

Re: Getting out Debt (Bad Situation)

JoeRockhead — Thu, 27 Nov 2025 14:04:26 GMT

While it sounds like a great idea to get a loan to eliminate high interest debt. The premise of taking on more debt to pay for other debt is often only successful in prolonging an inevitable head on crash into a brick wall.

The reason is due to people failing to make changes in their spending habits.

You have to rein in the spending. This always involves making sacrifices. At the very least until you can claw your way out of this hole.

Without 100% dedication to changing your spending habits I'd strongly recommend against a HELOC or possibly risking your home if this continues to go south to the point of no return.

The HOA fees are absurd. I'm sure you already realize you're likely paying out for twice the house you have. A move to a home (without HOA fees) where you're pocketing that HOA fee every month might be worth strong consideration.

Re: Getting out Debt (Bad Situation)

Realist — Fri, 28 Nov 2025 11:14:17 GMT

Your debt, is your debt. Their debt, is their debt. You don't want to acquire or assume someone else's debt, and make it part of your debt. You don't have the advantage of discharge, but they do. Your advantage, is to use the system against itself - legally.

Re: Getting out Debt (Bad Situation)

ptatohed — Fri, 28 Nov 2025 08:03:11 GMT

I'm confused. What is the debt? Someone else's medical debt or your credit card debt? I'll come right out and say it, if it is someone else's (heck, even your own) medical debt, stop paying it. Period.

Re: Getting out Debt (Bad Situation)

STChi — Fri, 28 Nov 2025 15:24:27 GMT

All, for clarity, it is NOT medical debt, and no one is paying medical debt (which we assume is discharged at debt or an issue to deal with later). This parent lives alone, out of state (4 hour flight) in one of our hometowns. We supplement their monthly social security (eg rent, groceries, utilities, transportation). This parent fell and was not found until 4 days later and almost dead. There is more to the parent's situation (eg hoarding, disability) obviously, and we have had make adjustments.

There was a substantial outlay to get them back on their feet and back home. We are focusing on on how to get our finances in order after his very difficult 6 months.

Re: Getting out Debt (Bad Situation)

FicoMike0 — Fri, 28 Nov 2025 18:05:51 GMT

I'll agree with @JoeRockhead , with one exception.

There is a concern with turning unsecured into secured, via a heloc.

As lawyers, you should be able to evaluate this issue. Let me offer a single data point on the subject.

I have a close friend who's situation was, disabled/retired, owned his house and little else. Income not attachable. Several years after a divorce he found out his ex had not made the payments on her car, financed during marriage. His name was on the loan. The debt pirates came after him for the balance, plus interest, a lot. He didn't pay. They filed a lien on his house for the debt. They sued. He ended up in bk7, to prevent loss of the house.

From this, I've determined that your house is in jeopardy anyway. This likely varies from state to state, this was ohio.

Re: Getting out Debt (Bad Situation)

Patient957 — Fri, 28 Nov 2025 20:44:14 GMT

@STChi

With your high income, you should be able to get out of this situation. You need a budget and the discipline to stick to it, with full buy in and participation of your spouse. You're already making lifestyle modifications, but you have to put pen to paper to see if it's enough. You may need to cut more than you want, but without a realistic budget, you're just guessing, hoping it all works out. Time to fire up the excel spreadsheet and get to work. The budgetary tradeoffs you'll need to make will become apparent once you're staring at the reality on the page in black and white. Good luck.

Re: Getting out Debt (Bad Situation)

LIGHTNIN — Fri, 28 Nov 2025 22:53:29 GMT

Is there any other family members,that could help this parent?

Check into resources to help with rent and/or utilities. Meals on wheels is a great program, at least ,the parent would be checked on a daily basis. Quality of food, seems to be better in the bigger cities.

Before contributing 1-2k per month, find out exactly how much ,this parent needs financially. It's wonderful y'all helped this parent financially, but if going to put you in financial trouble, it makes everyone be unhappy.

I would suggest you, your spouse and the parent, sit down discuss finances ( income & expenses) and make a plan

My 87 year old mother lives on, just her social security alone. She makes it work and lives below her means.

What senior citizens want the most, is having connections with family/friends. See them in person ,talk with them on the phone often.

Good luck, hope this helps.💞

Re: Getting out Debt (Bad Situation)

Realist — Sat, 06 Dec 2025 09:06:05 GMT

This is always the issue in life.

How do you help someone, to become that lifeboat, that vessel to get them back on track, and yet, not capsize from the entire situation?

If your lifeboat capsizes and theirs does as well, who have you helped?

We are very much open to helping others, but if they can't pull the weight after this certain metric, there's nothing left to be done. It makes zero sense to bring down two families, two households, in the pursuit of charity. This isn't a lack of ethics or morality. It's a realist point of view. If you doom two families while trying to help one, you've done nothing positive for either party.

Dont let this sink your boat.

Re: Getting out Debt (Bad Situation)

Patient957 — Sat, 06 Dec 2025 16:07:41 GMT

@Realist wrote:
Dont let this sink your boat.

They make $750K+ per year. I don't think the $1-2K helping the parent is what's sinking the boat. It's more of an excuse for a much larger financial mismanagement problem that IMO is the real issue here.

Re: Getting out Debt (Bad Situation)

1lifeisworthit — Sat, 06 Dec 2025 17:26:52 GMT

A few things jump out at me..

*Your housing is a disaster decision. I don't know what went into you and your spouse thinking that was an OK house for anyone, but I'd fix that thinking and get out of that house.

*You have a terrific spending problem.

*You apparently haven't cared about having any savings at all, and apparently haven't cared about having savings for YEARS.

So I'd put your house up for sale, put yourself on a much tighter budget, and make part of that budget savings and sinking funds.

I'd also talk about making your new home a duplex, and install your relative in the other unit. Your household staff can cook and clean for both units, and when the relative passes you can rent it. When your children go to university you can turn that unit into student housing.

Re: Getting out Debt (Bad Situation)

Jnbmom — Sat, 06 Dec 2025 18:57:07 GMT

@Patient957 wrote:
@Realist wrote:
Dont let this sink your boat.
They make $750K+ per year. I don't think the $1-2K helping the parent is what's sinking the boat. It's more of an excuse for a much larger financial mismanagement problem that IMO is the real issue here.

Completely argee

Re: Getting out Debt (Bad Situation)

Realist — Sun, 07 Dec 2025 23:51:14 GMT

Agreed.

So long as it isn't medical, should be in the clear. Medical can sink anyones boat no matter how much you make, and if you don't know how to play it.

Re: Getting out Debt (Bad Situation)

AndrewF — Sun, 18 Jan 2026 05:30:47 GMT

@Realist wrote:
Agreed.

So long as it isn't medical, should be in the clear. Medical can sink anyones boat no matter how much you make, and if you don't know how to play it.

The debt isn't even the worst part. It's whether you're insured or not so they'll even agree to do what you need in the first place.

There's a reason why Breaking Bad was set in America, not some country where Walter White would have taken out his national health insurance card and gotten chemo. Very boring plot device, show would be impossible.

Thankfully, I have Medicare, so they agreed to do my very complicated shoulder preservation surgery at a good hospital, and it did not drive me into a second bankruptcy. If younger people knew how good Medicare was, there wouldn't just be a Medicare for All proposal every once in a while, it would either be passed or there would be rioting. Instead of getting denials, going through an "appeals process", and hoping to one day get surgery, I went from consult to the operating table in three months, and my total medical costs have been about $2,000 so far on $170,000 worth of bills.

People have been conditioned to accept that health insurance has to be both bad *and* expensive, and they literally defend the system that's killing them. "It has to be this way because..." arguments always start out from a place of misinformation and FUD.

But I digress. Mom's strategy was always don't pay it and negotiate the bill down by 40% or so after a debt collector bought it. You _can_ do that if you always want to have bad credit. Nasty system.

Re: Getting out Debt (Bad Situation)

Realist — Mon, 19 Jan 2026 16:03:40 GMT

I'm not implying anything here, but most people can read between the lines. If a bill was was a devestatingly high amount, nearly an impossible to pay off amount, could there be a better solution? Everyone is offered the annual discounts. That's not really a solution unless a bill is manageable. Hospitals make bank, on top of bank. Money hand over fist.

The answer is yes there is - there is a better solution.

Make arrangments for payment, and keep on paying. Whether $1 dollar or more monthly, they aren't sending you to collections. We have family that work within the hospital billing system. They won't push someone actively paying into collection. Your imagination can figure out the rest.

Never, ever, go into bankrupcy due to medical expenses. Never, deplete your savings. Never go bankrupt over it. Never extinquish your retirement or personal value over these made up and inflated digits. Digits that magically disappear under certain sets of conditions.

I won't give you the answer on what to do, but everything I've explained above walks you towards a solution if any medical debt is crushingly impossible to pay off within a lifetime.

Re: Getting out Debt (Bad Situation)

ptatohed — Mon, 19 Jan 2026 05:09:39 GMT

The two times I had some out of network medical expenses that were a complete surprise to me when the bill(s) first came in the mail, I just didn't pay them.

Re: Getting out Debt (Bad Situation)

AndrewF — Mon, 19 Jan 2026 21:36:56 GMT

@ptatohed wrote:
The two times I had some out of network medical expenses that were a complete surprise to me when the bill(s) first came in the mail, I just didn't pay them.

I've walked away from hospital bills before. I didn't want to, but I was uninsured because I didn't have any money and then I had the huge hospital bills because I was uninsured because I didn't have any money. And then they got no money because I didn't have any money.

So the hospital just passes them along to other people in the form of higher overall prices.

For some reason this is so simple that half the people you talk to can't understand why we need more people covered by health insurance.

Most of the savings from having health insurance is the hospital just writes off 80% or so of the bill because it's based on those "fake prices nobody is supposed to pay". It's a "you scratch our back, we'll scratch yours" arrangement where the insurance companies get to charge people for huge (and fake) discounts, and the hospital makes it too dangerous to not have insurance and pay for it by actually charging those prices to people who don't have any.

There should be a law that says it's illegal for a hospital to charge an uninsured patient more than the best deal they've negotiated with a health insurance company at the in-network rate.

Of course there'd be a financial buzz cut for the $200 million dollar a year hospital an insurance company CEOs and other bloat and waste. Shareholders. Directors, etc.

If we had that law, my $15,000 ER bill in 2009 would have been no more than about $4000 and I could have tightened my belt and paid them back over time.