My inlaws have a lot of credit card debt. They will be moving to senior living which will take all of their money and then some. What happens to their debt in this situation? Should they file for bankruptcy?
There's no need to file bankruptcy. Make sure they get a new phone number and protect it from the public ( You don't want them receiving harrassing phone calls in their new home). You can call the credit cards and tell them your inlaws are unable to pay anymore, they are ill. If you choose to do this, do not give them any information about yourself.
Thank you, their only phones are their cells, I doubt if I could talk them into changing numbers, I just need to get them to stop answering if they don't know who it is!
Do they have assets still? I spoke with an elder care/estate planning lawyer when my father had to go in the nursing home. He had a mountain of credit card debt. The lawyer told me that the nursing home has to get paid first. The credit cards did not get paid because there was nothing to pay them with. The credit card company had no choice but to forgive the debt because they can't get what isn't there. Your parents will not have to file bankruptcy. That's an unnecessary cost. Their credit will be ruined for non-payment, but does it matter if they're in assisted living?
Well actually, they do have money even though you plan on using it for their care. This is not like Medicaid where they literally have no money and can't be sued against SS.
I guess you can just do as suggested but I may want to consult with a lawyer. I would suggest that you do not forward their mail to new home. I did this with my Mom. Had all her bills sent to my house thinking that this would help stop the junk mail, it didn't. It started to be sent to my address. I asked the PO how did they know when I sent nothing to them about the change. The PO denied it was them but I think it was. With automation I don't think the machinery or the humans think about its good or bad mail when they put that yellow change of address sticker on the mail. They tried to blame the utilities but they claim they don't sell addresses.
So my suggestion is to get a PO box. This way they can't find your parents. Believe me they will eventually. Just had a post where a member's Father was estranged from his brother (something like that) and had a call or letter from a collection co. for a 4 yr old debt from a hospital who probably had sold the debt to the collection agency. How did they track down the Father down through the internet. There are sites that show who u maybe related to.
Thanks, didn't even think about the mail, that would just make her anxious. The money they do have will be gone in no time paying for AL, we have applied for Medicaid for them.
Do you have durable power of attorney both medical and financial? Most credit card companies are willing to settle the debt for a very reduced amount. Have you cut up their credit cards yet or are they amassing new debt? Make a budget for them and help them budget their money so that no new debt is incurred going forward.
It isn't clear what you mean by "senior living", but if Medicaid is involved, at a minimum we're talking AL. As someone else said, if it is plain old AL, consider yourselves lucky as many states/facilities don't accept Medicaid for AL. Some won't even cover MC. Those cover NH only, and not everyone qualifies for NH.
Given that they owe money AND given what I posted in reply to others about skip tracing, you might want to have at least one consult with EC atty. Just ignoring the debt won't make it disappear! Best case, they harass your parents by phone. Worst case, they AND you get harassed (and possibly other family members.) Even if the credit card company decides to give up, many will sell old debt for pennies on the dollar to collections - THEN the REAL fun begins!
Why does no one here seem to think the parents are obligated to pay their credit card bills? They received goods and services using the cards and the companies gave them credit in good faith it would be repaid. The restaurants and stores expect to be reimbursed by the credit companies. This kind of debt is passed on to other consumers via increased costs so in the end we all have to make up the losses.
Yes, it sucks to be old with no money. Shouldn’t they pay the debt, sell their excess possessions, then apply for Medicaid when they have reached the minimum? I should point out that Medicaid is funded with our taxes so once again the public is paying for the debt.
I will also state that I have experience with Medicaid through applying for my father who had nothing saved for old age. And now am facing doing the same for my mother if she outlives the little savings we have from selling her house.
And please know that AL is not required to accept Medicaid, only SNC facilities are. All of the places I looked into for Mom in Ohio required a 2-year stay before they will consider a Medicaid waiver.
I don't know how much access/info you have to their financial info, but I would not make a move until I had visited with a certified elder law attorney for guidance on the best moves. I know you should be very careful in signing anything that might leave you and/or your husband liable for the debt....
Filing bankruptcy is not necessary. And it’s pretty costly if their living off credit cards. The credit card companies cannot collect if there are no assets. It costs creditors a lot to sue —usually not worth it to them. There’s nothing to collect. They will write it off on their corporate taxes as a loss.
You should be able to find a standard letter online that you can use to contact each creditor telling them to stop all contact either by mail or telephone. But has to be signed by the parents or whoever is a power of attorney. (Google something like “do not contact letter for creditors”. ) This is a federal consumer protection law.
One can argue the ethics of not paying a debt but it is what it is.
I guess you can just do as suggested but I may want to consult with a lawyer. I would suggest that you do not forward their mail to new home. I did this with my Mom. Had all her bills sent to my house thinking that this would help stop the junk mail, it didn't. It started to be sent to my address. I asked the PO how did they know when I sent nothing to them about the change. The PO denied it was them but I think it was. With automation I don't think the machinery or the humans think about its good or bad mail when they put that yellow change of address sticker on the mail. They tried to blame the utilities but they claim they don't sell addresses.
So my suggestion is to get a PO box. This way they can't find your parents. Believe me they will eventually. Just had a post where a member's Father was estranged from his brother (something like that) and had a call or letter from a collection co. for a 4 yr old debt from a hospital who probably had sold the debt to the collection agency. How did they track down the Father down through the internet. There are sites that show who u maybe related to.
Given that they owe money AND given what I posted in reply to others about skip tracing, you might want to have at least one consult with EC atty. Just ignoring the debt won't make it disappear! Best case, they harass your parents by phone. Worst case, they AND you get harassed (and possibly other family members.) Even if the credit card company decides to give up, many will sell old debt for pennies on the dollar to collections - THEN the REAL fun begins!
Yes, it sucks to be old with no money. Shouldn’t they pay the debt, sell their excess possessions, then apply for Medicaid when they have reached the minimum? I should point out that Medicaid is funded with our taxes so once again the public is paying for the debt.
I will also state that I have experience with Medicaid through applying for my father who had nothing saved for old age. And now am facing doing the same for my mother if she outlives the little savings we have from selling her house.
And please know that AL is not required to accept Medicaid, only SNC facilities are. All of the places I looked into for Mom in Ohio required a 2-year stay before they will consider a Medicaid waiver.
You should be able to find a standard letter online that you can use to contact each creditor telling them to stop all contact either by mail or telephone. But has to be signed by the parents or whoever is a power of attorney. (Google something like “do not contact letter for creditors”. ) This is a federal consumer protection law.
One can argue the ethics of not paying a debt but it is what it is.
My two cents.
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