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Introduction
It has been passed for almost 2 months since my father passed away. He was a good man, always helping others without receiving anything in exchange. Everybody remembers him as a very kind person now.
The bad side of the story is that my father never had any financial education. He was always borrowing money from banks, so since I was a child —I’m 28 years old— until now we have been living in debt. So, I don’t know what is freedom at all because debt turns us into slaves.
The debt
As I mentioned above, my father is not in this world anymore but the debt is. The total quantity is nearly 11,500€ or 13,890 USD and it breaks down in:
- Bank loan, 149€ per month, 800€ remains.
- Another bank loan, 89€ per month, 2000€ remains.
- Credit card, 119€ per month, 2700€ remains.
- Loan, 249€ per month, 6000€ remains.
As you can see, I pay every month around 600€ in debt, which is savage, and my salary for this year is around 1600€. Also, the only thing my father left in his inheritance was the house I live in. The house value is probably between 200,000-220,000€ but this is not liquidity unless I sell it. Because of this, I must pay the Government around 5000€ in capital gains, the total is 16,500€.
The (not so) simple solution
At least not everything is bad, my mother has the right to receive a widow pension which should be 800€ per month. This could be a great help but it can take up to 3 months to start receiving the money.
Apart from that, my father had life insurance on the biggest loan but I need to do a lot of paperwork and pray for the insurance company to accept, otherwise, I have to demand the company. I’m currently focusing on the paperwork.
Also, looking at the conditions of the credit card, I found it has an abusive interest of 22.69%. This is called usury and it’s illegal, so if I demand the card’s company, they must cancel the contract and return me all the money my father paid. I will try to reach an agreement with them to avoid the trial.
And last, the easiest will be to liquidate the small loan of 800€ and keep paying 89€/m for the other one until I can repay that too.
Conclusion
Is it going to be hard and long (jokes aside) to pay for all the debts and solve the other problems. In the long term, I expect to learn a lot from this lection and I’ll work to manage my mother’s money so she can have a better wealth and life overall.
I have been learning a lot from my dad's mistakes and maybe if it wasn’t for that, I wouldn't be here. What I want is to close this book and start a new one.
Love you dad.
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