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Recently my 80 year old mother spent time in the hospital and is currently in a rehabilitation facility. The social worker and doctor think that she needs to go into a nursing home on a permanent basis once her rehab is finished.
I have taken on the responsibility of trying to pay my mothers bills and have her Power of Attorney. After having her mail forwarded to me, I discovered that she has accumulated a significant amount of credit card debt in addition to other smaller bills that are long overdue to be paid.
I've tried to help her as much as possible but she wouldn't allow me to handle her finances, till now.
What I am trying to discern is what exactly what to do about the credit card debt. Mom has NO assets. No car, I own the home she lives in, no investments, etc.....Her only income is Social Security. Currently, I am using her SS funds to pay down the overdue bills and I am sure I can get a handle on the small stuff pretty quick. Once Mom goes into a Nursing home on a permanent basis, they will recieve her Social Security to cover the cost of staying there.
What is the best way to handle to Credit Card debt? I am aware that I am not legally responsible for her debt but I am reluctant to contact them and close her account using my POA. I have heard stories of CC companies hounding family members in an attempt to recoup their money.
Does anyone have any experience with something like this? I want to handle this appropriately but don't know the best way to take care of this.
Gizmo
You Mother is Judgment Proof meaning she has no assets that the credit cards can come after.
Once she enters the nursing home it appears from what you explained that she will have no income.
You can send letters to the credit cards requesting the cards be closed and due to her financial situation there is no money to pay this debt.
Yes you are not legally responsible for her debt. The only way they would be able to "hound you" is if they have your number. If this should happen I would say she does not live here there is no money please remove this number from your records.
Yup - cut them up and send the pieces back to the CC companies with note saying 'close the accounts immediately.' You don't have to explain why. None of their business!
Gizmo
You Mother is Judgment Proof meaning she has no assets that the credit cards can come after.
Once she enters the nursing home it appears from what you explained that she will have no income.
You can send letters to the credit cards requesting the cards be closed and due to her financial situation there is no money to pay this debt.
Yes you are not legally responsible for her debt. The only way they would be able to "hound you" is if they have your number. If this should happen I would say she does not live here there is no money please remove this number from your records.
If I send letters requesting that the account be closed, do I have to include "proof" that she is in a nursing home and has no assets? I can't imagine that the Credit Card companies would simply accept my word for it. I would assume that it would be handled like other unpaid debt and sent to a collection agency.
If I send letters requesting that the account be closed, do I have to include "proof" that she is in a nursing home and has no assets? I can't imagine that the Credit Card companies would simply accept my word for it. I would assume that it would be handled like other unpaid debt and sent to a collection agency.
If you type up the letter to each CC company to close the account, will/can your mother sign them? (BTW, I wouldn't even mention she's in a nursing home and has no assets. She just wants to 'close the account'.)
I guess I was rash with my first answer - my Mom's CC and utilities and whatever-other-bills all have me listed as an 'interested party' so I can call and talk to them on her behalf. I used to call them and just say I was her. (Boy, that sentence is bad grammar!) Before anyone gets the wrong idea, I did this in the past with her permission - she doesn't hear well and hates the phone.
If you type up the letter to each CC company to close the account, will/can your mother sign them? (BTW, I wouldn't even mention she's in a nursing home and has no assets. She just wants to 'close the account'.)
Hmmm. Why would you not tell them she is in a nursing home with no assets? That seems to be the key to me. If I am the cc company, there is no way that I'm just going to accept a closed account that still has a balance, but if you demonstrate that she is judgement proof, they are much more likely to back off.
I agree with those who say that you are not libel for her debt, regardless of the POA. You are only conducting the business that she would conduct for herself if she was able. She would not have access to your assets. If they try to call you, tell them that calmly and repeatedly until they get the message.
Hmmm. Why would you not tell them she is in a nursing home with no assets? That seems to be the key to me. If I am the cc company, there is no way that I'm just going to accept a closed account that still has a balance, but if you demonstrate that she is judgement proof, they are much more likely to back off.
It's 2 different things. You can close an account and still have a balance on it. It just means you don't want the account anymore, and don't want the ability to charge things anymore. Paying it off or not paying it off is another matter. Telling them she has no assets and proof of that comes after closing the account, and they realize no payments are being sent in.
AFAIK, they have no choice but to 'accept' the closing of the account. Lots of people have closed / are closing accounts - some CC companies then ask for full payment, most just keep accepting payments.
Last edited by Gandalara; 04-04-2010 at 09:45 AM..
Reason: *Trying* to make myself clear :-) It's not working, LOL!
It's 2 different things. You can close an account and still have a balance on it. It just means you don't want the account anymore, and don't want the ability to charge things anymore. Paying it off or not paying it off is another matter. Telling them she has no assets and proof of that comes after closing the account, and they realize no payments are being sent in.
AFAIK, they have no choice but to 'accept' the closing of the account. Lots of people have closed / are closing accounts - some CC companies then ask for full payment, most just keep accepting payments.
Right! I didn't state my question correctly. I understand that you can close an account that still has a balance on it. I am more puzzled about your advice not to tell them she has no assets until until LATER. What benefit is there in waiting. The reality remains unchanged, so what difference does it make?
NOTE: I am assuming that all of this happens after the state attaches her SS income.
Heh. A quirk of mine. Only tell them as much as you need to, when you need to.
The OP has enough on their hands now, getting Mom settled and the paperwork and the many problems of nursing homes and of being a caregiver.
Get through the worst of that, and wait for the letters to arrive from the CC companies. Who knows, this may also give them more time to actually make some payments to the CC accounts from the mom's SS money, if not all of it is being used for the rehab facility. This also gives them more time "to pay down the overdue bills" and "get a handle on the small stuff pretty quick", as they said they were doing (or going to do).
I'm not saying they shouldn't tell the CC companies at all ... just spread the problems out to make it easier on them. I'm also a caregiver ... I take one thing at a time to keep my sanity.
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