I have been going through this situation with my father. He is 76 and lives in Tennessee. I am 57 & live in Chicago. He squandered his lump sum pension payout. When I took over his finances in December of 2013 he was behind on all his utilities, insurance premiums, his house was in foreclosure, he had $21,000+ of credit card debt. he had 7 payday loans!!! His total income was $1519/mo social security. He could not file bankruptcy because he had a bankruptcy 5 years before. I notified all his creditors that he could not pay the debt & to not contact him. He was sued by Discover. I went to legal aid for help. He ended up with an "acknowledged" judgement. That means that he agrees that he owes the money but he cannot pay it. Currently he is being sued by Chase. Legal aid is helping again. I expect it will be another "acknowledged" judgement. They cannot touch his social security. He is what is known as "judgement proof".

My father has frontal lobe dementia. He had 2 credit cards and would charge twice as much as the payment he would make. He was sending money to the scammers-send me $25.00 and you will win $300,000.00. I took the credit cards away from him, he did not make the payments and they were in collections. It seems now 5 or so years later it is starting all over again. I thought he would not be able to get credit but it seems almost magically that he is able to get credit. He has no assets, I own and make payments on his life insurance. I am not paying his debt when i have tried to prevent this from happening. I do not know what to do. His personal hygienic has gone down the tubes- i have to tell him to change his clothes and the aphasia is getting much worse. It boggles my mind.

Families don't always see signs of dementia. My husband has 'Frontal Lobe Dementia', also known as 'Pick's Disease'. His memory is sharp, as is his intelligence. This form of dementia only affects judgement and decision making. I trusted my husband of 35 years to handle our investments and accounting after he retired. We had a nest egg in excess of $900,000. We designed and built a beautiful home. I trusted him to make the decision on how much we could afford, and always made it known that peace of mind meant more to me than anything. My husband would lease one Infiniti after another. We'd take the kids and grandkids to the beach every summer and spend $5K. I always asked him before any out of the ordinary expenditure if we could afford it. I never heard "no". I was busy running my business, and hated finances, so gladly put it in his hands. A few months ago, I had employees with paychecks bouncing and company credit cards being declined. I got in the office and began uncovering things. First I found our personal and business AmEx cards, each in excess of $30K. And there were more. We were three months behind on our mortgage payment, as well as our business landlord. There were more credit cards, bringing total debt to $130K. My husband told me we had $200K invested, and I had him show me online. Apparently he had the wrong page pulled up, because I called our agent and found out our entire portfolio amounted to $740.00. I thought I was going to have to call paramedics when I gave my husband the news. Unbeknownst to me, we had a balloon note in the amount of $340K due in just a few months, March of 2014. He thought it was due March 2015. This type of dementia is SO under the radar, it would be impossible for family members to detect. It would require detailed conversations on a regular basis regarding financial decisions followed up by forensic accounting. We lost our home, and live on soup and crackers now. I'll never have another vacation in my life and will work at least to the age of 70. We did have long term care policies, but he let those go last year without my knowledge because he couldn't pay the premiums. His condition is degenerative. I don't know how I'll keep my business running and take care of him as well when he reaches that point. Please tell everyone you know, do NOT receive a lump sum upon retirement and opt to manage or allow your spouse to manage your investments. I had no idea a condition such as this even existed. I always assumed that it would be obvious if a loved one suffered from dementia.

I have already commented, but we have learned some new information on Friday. My mother-in-law purchased the credit card insurance on her three major credit cards that had debt totalling over $20,000.00. Because her doctor has filled out paperwork indicating that Alzheime's is a permanent disability, that credit card insurance takes are of all of that debt. She is no longer going to have to pay that and when your monthly income is only $1100, that is a big relief, so if you are dealing with this issue, it would pay to check the credit card statements and see if they have that insurance.

Good article.

Carolyn's question about how this mess came about in the first place is a good one, but it implies family responsibility where that may not fit the situation. Not all family live in the same state as their elderly parent. Not all family members are educated about signs of dementia until the reality hits them. Many persons with dementia are good at "show timing", at least at first, and can hide symptoms especially from people who see them infrequently. Not all dementias have memory loss as a first symptom. It does not take long to build up a big credit card debt if you still know how to watch tv and dial a phone. I think implying that a credit card mess is somehow the family's fault is off the mark about as often as it fits.

KZ, I have been a real estate paralegal for years. Your biggest issue that I can see may not be the judgments but that if Medicaid is paying her medical expenses they could perceivably take your house. The attorney you have been paying should have already advised you about this, you may want to check with him. I obviously don't know the real estate laws in all states, so I guess it is possible that the judgments cease when her life estate ceases, but I would be surprised. You need to go back to the attorney you hired and ask him these questions, if he hasn't already answered them for you.

responding to 195Austin....not neccessarily!!! If the unsecrued debt is in her name only (you didn't ask to have them put your name on the account) then you would not be responsible for the debt if there was no probate involved. The lender would have to file for a probate on the estate, which many won't bother doing due to their own costs for attorneys and court. The problem Austin had was that she agreed to pay it off. I would suggest you see a good attorney that specializes in estate planning and elder care. Mine has given me a wealth of advice! One thing I never knew and is a negative to life estates, is that medicare can now go after the "value" of a life estate. So be careful and get a good attorney!

ABOUT ALZHEIMER'S - When I realized that my dad couldn't handle paying bills anymore, and when I had him sign the checks and by the third check he asked me, "Hey, I can't remember how to sign my name," it was time to transition.

When he knew that I was taking care of the bills, he let it go pretty easily.

Legally, a person is responsible for any contracts or purchases they make, even with Alzheimer's. Since it is a disease that has so many gradations, it does not automatically make one incompetent in the eyes of the court.

If the debts/purchases so far are minimal, I would recommend focusing on transitioning to someone who can act "to take care of his finances." If it is already a big mess, then you'll have a ton of work and expense to have him evaluated, declared incompetent and for a conservator to be appointed. With that in hand, you could then challenge the previous debts.

SCOTT FREE - I think many of the persons responding are wrong. Kids or spouses are not responsible for a parent or spouses debts. When they pass away, the debt goes "poof."

The only exceptions to this are when contracts and purchases were done in both person's names. Or for example, if you co-sign something as a guarantor. If the credit card is in only one spouse's name, any debts on it, are to that person only.

Collection agencies WILL tell you that as a spouse or child you have a moral obligation to pay off the debt. That is up to each person to decide however. Legally, the debt a person takes on, goes with them to the grave. If it were any other way, we'd go back to serfdom and family debt thru the generations!

This is both a financial and legal question. I am not being sarcastic, but I would write to Suze Orman. You need professional advice from someone that is not going to put YOU into debt. Good Luck.

So what happens to credit card debt after death? My mother has no property, no estate. In fact, when her Social Security starts going towards Hospice care, there will be no money to pay her bills before she passes. I have researched and can't find out any answers.

A debt does not gp away when she dies-my husband's debts are now owned by me even though other widows do not have to pay off credit cards in their late husbands name I got in trouble by just asking if I was responsible and agreed to continue paying it off and had to pay the balance at once just for asking the question-so if her debts are yours now they will still be yours when she dies.

I believe the credit cards are "unsecured". The home is actually under my name and she is just listed as life estate of the house meaning she has a place to live if she ever left the nursing which is never going to happen. Bankruptcy was an option; however, I don't think she can file for it since she is a Medicaid recipient. I'm hoping after mom passes, her name will come off the deed and then the judgments will be removed. I can only wish!

KZ

KZ:

Are the credit cards "unsecured" or did she put the house as collateral? If it's unsecured, she can file for bankruptcy and keep her home (and be credit-less for 7 years). You might want to file yourself or find someone in one of those community papers at train and/or bus stations who won't charge an arm and a leg.

-- ED

Could your Mom file for bankruptcy? My mother-in -law did and was able to keep her home and car.

I'm in a mess with my mother's debts as she's on Medicaid and currently resides in a nursing facility. She was unable to pay her outstanding debts and low and behold, 2 judgments were placed on our property (the house is in my name with mom listed as Life Estate of the house). I've paid large attorney fees to get this resolved, but to date, it still hasn't as I ran out of money. I don't know if I should wait it out until mom passes (she is 91) and her name is taken off the house and hopefully, the judments removed. What a mess!

KZ