Anyway to protect myself and the kids from DH's debts...

With rising costs and increased learning needs, financing our children's education is no longer a simple walk in the park. Discuss with other parents about how they are managing their finances to cope with their expenses.

Anyway to protect myself and the kids from DH's debts...

Postby minami » Wed Nov 02, 2011 2:13 pm

Would like to know if there're anyway to protect myself and the kids from DH's debts exposure?

It's a little complicated. DH's main debts exposure are due to being a joint borrower with his parents for their mortgage loans and car loan. My inlaws are servicing the loans on their own as they are still earning a fair bit with their small business. However my FIL is already in his mid 60s which explain why the bank required my hubby to be the joint borrower (instead of being guarantor). The property and car are all under my inlaws' names (hubby has no name in them). He has 2 younger siblings with their own family but staying under the same house with inlaws. They don't have their own place. We are staying in our own HDB with no other property.

I'm worried that in the event of unforeseen circumstances of one or two of the borrowers pass on, we have to shoulder the debts and getting the siblings to move out and sell the house would be difficult. Worse case scenario is if DH pass on, me and the kids got to shoulder the debts since the banks won't go after the siblings.

Also note that my inlaws did not draft up any wills and has no intention to. DH feels that it's a very sensitive topic to bring up. On top of that, my inlaws debts are way much more then their cash plus cash equivalents plus insurance. If anything bad happens to them, i assume everything, including the house will be spilt between the children except the loans as hubby is the only joint borrower.

I am really worried as my inlaws are already in their 60s, they feel that since they are the ones servicing the loans, we should not worried but me and DH knows the complications.

My question really is, how can me and my kids be protected from the implications? We are prepared that DH might goes bankrupt if my inlaws really pass on (*touchwood*) but what if the worse case scenario happens, my DH pass on? *touchwood*

Thank you in advance for any valuable inputs.

minami
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Re: Anyway to protect myself and the kids from DH's debts...

Postby financial_guru » Wed Nov 02, 2011 2:53 pm

Is yr in-laws and hubby protected by life insurance? The payout will help mitigate the consequences of premature death.

Now that yr hubby is a joint borrower, the creditor can come after him in the event of premature death of your in-laws.
You didn't mention if the HDB property is joint ownership?

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Re: Anyway to protect myself and the kids from DH's debts...

Postby minami » Wed Nov 02, 2011 4:43 pm

Hi financial_guru,

Yes they have life insurance but with little coverage. The mortgage insurance is only a little fraction of the loan too due to their age (they didn't want to take up full coverage as the insurance are too expensive to service)

As they don't have will, whatever insurance payouts will also be spilt between the children, thus whatever my DH can get will only be too little to pay any debts.

Our HDB property is joint tendency under HDB loan.

minami
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Re: Anyway to protect myself and the kids from DH's debts...

Postby peapot » Wed Nov 02, 2011 5:32 pm

I thot HDB housing, you need to buy home protection scheme. This covers the loan issue when payee passed on. Which means the Hse automatically pays off after death.

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Re: Anyway to protect myself and the kids from DH's debts...

Postby minami » Wed Nov 02, 2011 6:38 pm

peapot wrote:I thot HDB housing, you need to buy home protection scheme. This covers the loan issue when payee passed on. Which means the Hse automatically pays off after death.


Our own HDB does covers under the home protection scheme. My inlaws own a pte pty so it's optional for them.

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Re: Anyway to protect myself and the kids from DH's debts...

Postby LOLMum » Wed Nov 02, 2011 7:30 pm

this is something all of us especially sahps have to take note of.

for hdb, my understanding is no one can touch it even creditors but better to check with hdb.

the siblings and their familes who are staying with the inlaws should know that your hubby is the one taking the risk to help.

i think you and dh should approach his parents about your worries. if they refuse to make a will or try to skip this topic, it does mean they want everything to be shared equally among all kids regardless of who the main contributor/risk taker is.

if this is so, i would advise you and your dh to not be a guarantor for any future loans or persons. this is not being selfish but cos' he has done his part and the rest of the siblings have to step up to their responsibillities. main thing is he has to take care of his own family, namely you and your kids.

if cant afford something (especially it is not of much importance), dont get it. reduce the need for unnecessary loans.

also, it is better to put the savings in your or kids name and try not to have any assets under your dh's name. pls keep the receipt or whatsover docuemtns to prove that you are the owner of that tv set, the fridge etc and not your dh in case of seizure by court. i hope i am getting this last part right.

all the best. pls dont let this issue affect your relationship with your dh.

LOLMum
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Re: Anyway to protect myself and the kids from DH's debts...

Postby minami » Wed Nov 02, 2011 9:34 pm

LOLMum,

I think creditors cannot touch HDB also, but still need to verify this part.

The siblings are not contributing to the household in any way, my inlaws are sort of paying for everything under that roof. My hubby did mention to them the risks that we are taking on several occasions but was quickly brushed off by them and yes they want everything to be shared equally among all kids. They are the kind that don't act unless being forced to face in whatever problems they faced.

I thought of putting all the monies under mine or our kids' names but still, i'm more worried that in the worse case scenario that my DH pass on, we will all be left with nothing from the insurance payouts plus a huge mountain of debts. How does me and the kids survive with my single income? For this part, i'm still thinking if there's anyway we can protect ourselves from such situation which seems hopeless in any case.

minami
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Re: Anyway to protect myself and the kids from DH's debts...

Postby LOLMum » Wed Nov 02, 2011 9:58 pm

:scared: joint borrower yet with no property and car under his name. :rant: i do worry for you should anything happen (touchwood).

any1 else with advice????

LOLMum
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Re: Anyway to protect myself and the kids from DH's debts...

Postby ohdaddy » Thu Nov 03, 2011 12:21 am

minami wrote:LOLMum,

I think creditors cannot touch HDB also, but still need to verify this part.



Insurance, HDB and CPF safe from creditors.

http://app2.ipto.gov.sg/IPTOServices/In ... fault.aspx

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Re: Anyway to protect myself and the kids from DH's debts...

Postby ohdaddy » Thu Nov 03, 2011 12:31 am

minami wrote:LOLMum,

I thought of putting all the monies under mine or our kids' names but still, i'm more worried that in the worse case scenario that my DH pass on, we will all be left with nothing from the insurance payouts plus a huge mountain of debts. How does me and the kids survive with my single income? For this part, i'm still thinking if there's anyway we can protect ourselves from such situation which seems hopeless in any case.


To protect yourself and your family in the event of an unfortunate incident, consider getting group term insurance as it is "cheaper". If your husband is a NSmen or SAFRA member, they all offer some group term coverage I think. But it all depends on the amount of debt you are talking about as the insurance coverage might not be enough.
Last edited by ohdaddy on Wed Jul 25, 2012 9:23 pm, edited 1 time in total.

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