My Mother passed away last April and was the primary bill payer for her and my father. Their income was limited to begin with, then Dad's retirement benefits quit paying their prescription costs, etc. so they could barely afford to live and pay all their bills. To pay their bills every month, my Mother used 2 credit cards and more often used those "checks" they'd send in the mail. I know she was starting to have some problems with dementia, so I don't know if she used them, not knowing it'll all come back as debt, but now my Dad has over $15,000 in credit card debt between the two and he simply cannot pay it. The minimum payment on ONE card alone is more than half his monthly SS income. And the interest and late fees keep stacking up. He has NO assets except the old car he owns. No investments, no other income. He just has enough to pay his rent, groceries, utilities, cable, etc. I've been helping him out with food, etc. but I can't afford to take on much more. What do I do? Can we request the companies write off the debt? If we could get rid of the credit cards, he could afford to live where he's at for a few more years. I need help!
Close the account.
They can't take his SS thank goodness!
I am sure others here will have good ideas as well.
I'm so sorry to hear what happened. I know its very stressful to find this out. I would follow Shane's advice and call the credit card company immediately to close the account and talk about making payment arrangements.
I would think your dad would have to declare bankruptcy before they would consider writing off the debt. I'm not sure. But another option is to talk to a credit counsellor or social worker and see what options they suggest.
I ask b/c, e.g., I'm an authorized signatory on my father's account but am not obligated for payment. There are some specific terms for designating liability, but I can't recall them right now. I was just thinking that if he only had authority to sign, he might not have obligation to pay.
I agree with both Shane and CDN, and would add that I don't keep up on bankruptcy law, but I do recall there were some restrictions and changes made after the last real estate recession. I believe one of the issues, if I remember correctly, was tightening up credit card induced bankruptcies.
During that period there were also a lot of companies which provided free credit/bankruptcy/financial counseling, in part b/c of the massive volumes of foreclosures. A company like that might offer some free advice.
In our area, the Lighthouse organization was one such company, There were many others, some with multiple offices, but I don't recall their names at this moment.
But do take the offensive by contacting the credit card company and explaining the situation. It's better that you contact them up front than let them take action first.
Credit card companies no longer simply "write off debt" and zero out accounts with no effect to consumer. It is taken off credit card companies' books as an uncollectible debt, but a 1099-C (cancellation of debt) is issued to the person who receives the benefit of debt cancellation (they got the goods and services charged on the card, there should be some effect unless bankruptcy involved). The 1099-C is income in the year it is received to the borrower. If a person is low income, there is an IRS form that can be used to assert that the income taxes cannot be paid for the cancelled debt. Sometimes it can take up to a year for a credit card company to issue a 1099-C. Your father (or you) need to contact the credit card company and tell them that he cannot pay on this account any longer. You want the fees and interest calculated and the account frozen. Make sure that any auto-pay bills that you use the credit card for are changed in advance. Be prepared for them to try to get your father or you to pay bill. Do NOT call them from your personal phone. Do NOT engage personally with any bill collectors; tell them that your father is "judgment proof due to low income" and that the credit card company is canceling the debt. Keep a log of any phone communications. Keep copies of any written correspondence. Don't ignore the 1099-C when it does come because IRS debt is one of the few things that can garnish social security pensions. Please consult with a tax professional when you get the 1099-C to make sure it's properly reported and your father is taken care of. AARP has some locations around tax time that has volunteers that can either help you or refer you to help. Sorry he is going through this, but it won't just go away.
Mother had one catalog co. she dealt with (long backstory) and she was refusing to pay the amt due each month, so the $39 monthly late fees just kept racking up. I finally stepped in and worked it out for her, and she ended up paying part of one month's late fee and the S&H of the original item she'd returned (which was the beginning of the problem, she didn't WANT to pay s&h on something she didn't like)
(Big sigh). She was STILL MAD and I'd saved her well over $100--on that thing alone.
The takeaway from this, for me, was that she shouldn't even HAVE cc's at her age and state of mind, but what can I do? Nothing. I am not POA, and she really barely listens to me. So I would say that by calling all these cards and Lines of Credit and explaining what the situation is--you can probably get a portion of the charges reduced--but don't linger about it!! It's been 4 months and if he's not current on the bills, they will be much less likely to work with him.
Dad will need someone on speaker phone with him, and take COPIOUS notes: time, whom you called, what they said, what they offered, what you will agree to pay, etc. Also, your dad may not be capable of making these decisions, but will have to verbally allow you (or some representative of his) to speak for him.
It took all of my negotiating skills to get mom out of the mess she was in, but I did it.
I think you got a lot of good advice here. Just don't leave it be and not be making payments each month--the companies will be a LOT easier to work with if they see you are making an effort.