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After my mom was hospitalized last year, I discovered a huge amount of credit card debt she had racked up over the years (in later years, mainly for food and other necessary items.) She had no assets other than an old beat up car. No house, no savings accounts, no nothing. She was trying to keep her head above water with the credit card payments, but she was borrowing on one to pay the other. It was a very rude awakening for me to see her horrific financial mess. So, I certainly understand what you're dealing with here.
I ignored the situation for while during the time my mom was in ICU and on death's doorstep. Gradually, as she improved, I pulled my head out of the sand and started doing research. Like others have suggested, she is judgment free meaning she has no assets and she only income is her social security payment (which isn't enough to cover her monthly expenses.) I wrote letters on her behalf to her creditors saying that she was judgment proof with a copy of her social security award letter and requested that they cease all phone calls. She continued to get letters for several months saying she was going to have horrible credit (so what at her age?) And several lawyers have sent threatening letters saying they were going to sue. I sent them the same letter I sent creditors.
My mom is now in a nursing home (and happy to be there, shockingly - and fortunately since she has medical problems that cannot be cared for outside of a medical situation.) SHe is SO relieved that I took over and dealt with all the companies, though she feels terribly guilty for not being able to pay her bills. I don't know what started the downfall with the credit cards. She didnt' have stuff to show for it. Mainly, though, as I said, in the later years she was getting cash advances just to live and she was afraid to tell me. She didn't want to be a burden. Because of her precarious financial situation, she is now on Medicaid in her nursing home. I do not know what we would do if she was not in the nursing home.
I feel for you and your mom - it's a hard position to be in, for both of you.
Traeger is correct, the woman is essentially judgement proof. She should just stop paying the bill.
Keep in mind that she will be mercilessly harassed, how will she stand up to that?
Regarding the car, I doubt that they would take it, but if they get a judgement against her it would have to be paid off before anyone gets anything from the estate. So if she defaults the granddaughter shouldn't count on getting the car. Putting it in someone else's name now with the understanding that granny still gets to drive it as long as she's able might be an option. Likewise, if she has family heirlooms listed in her will she should just give those away now so that they don't have to go through the estate.
My mom went through something similar a few years ago. She retired very suddenly without really planning for it, and rather than cut back her spending she used cards to make ends meet. She owned her home free and clear so she was able to use the equity to pay off the cards. I had POA so I was able to negotiate pretty good settlements on them once I told them they simply weren't going to get any more money.
Last thing, even without the $140 credit card payment she will only be left with $155 a month for groceries and the "extras" that she is now using the card for. That still doesn't seem like much. I think it's time for someone to go over her monthly expenses with a fine-tooth comb to see what else might be eliminated or reduced.
Sign up for a free consultation with an attorney. Maybe do a couple of them. Get some good advice.
I believe she is judgement proof and there's really nothing anyone can 'take' from her if she stops paying. If she can't stand the harassment, just file bankruptcy. The atty should be able to point you in the right direction.
Time to also examine her other expenses and make sure there's nothing further to be done to give her more available funds. Some states have special programs for utilities, etc. Apply for all of them. Apply for medicaid too, it's almost a sure bet she will be needing it.
Ask the atty what she should do with the car. And it is a good idea to give away the family heirlooms now to all the relatives who would have eventually gotten them anyway. I'm assuming these aren't of great monetary value, just sentimental value.
I agree with Trager - they can get nothing from her. It will also make her unable to use her credit cards and that would be a good thing.
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