Our 89-year-old dad got himself into a credit card situation, and has to pay $1400 per month. He wants us to pay, but we don't have it. What are our options?

Wsbf: You are correct when you say that heirs do not pay the debt, the estate does. However, if there are no funds or not enough funds in the estate, then nobody get paid. The creditors can sue the estate but again, if there is not money in the estate, then creditors cannot be paid. That's the way I understand it.

Just for clarification, the heirs don't pay the debt. The estate does. Before property is dispersed, debt is handled.

It is possible to get the debt cancelled if there are not funds in the estate to cover the debt. Again, I am not advocating the familhy pay the credit card debt, just to be aware of the issues surrounding it.

JV:

Without consequences, this kind of self-destructive behavior will be repeated. Doesn't matter if you're 89 or 29. Caring for him doesn't mean inheriting his debts, but do explain the options to him. If you bail him out, don't expect him to be responsible.

-- ED

Since when does an 89 year-old who dies intestate have to have his credit card bills paid for by his heirs? Even if he should have a will that does not mention "debt", no one else is responsible for paying off his credit card bills..

Good thought about the debt perhaps resulting from a scam! It is worth looking into. Scammers prey on the elderly all the time and this may be why your parents are so so hesitant to discuss it all, they may feel foolish and embarrassed.

I agree that contacting a bankruptcy attorney is a good idea. You may have options you haven't even thought of. If your father is on limited income, there may be local legal aid support (depending on your community).

Some food for thought:

1) Estates include debt as well as assets, so at some point, tihs debt will become yours if you do not deal with it now. Ted is correct, this is not your debt and you should not assume responsibility for it, or pay it. However, the headache will follow you.

2) Does your father still have the capacity to understand money and financial transactions? Is he paying the rest of his bills?

3) Is part of that bill the result of a scam? If so, contact your state's attorney general's consumer protection office. You may also be able to work with the credit card company to disput the charges

4) Do you have power of attorney? If not, your father can still give permission for you to work with the credit card company. You can have the card turned off or lower his credit limit so this doesn't happen again.

good luck!

wf

That's great to know! The reason I held off for so long and just kept covering mom's mistakes as well as I could for as long as I did was because I did not want to put her through the process of the court.
It's too late for me, and things did work out before it got too bad, but it's info like this that we need to keep sharing. Thanks!

My lawyer told me that in his senior partners' opinion, these two notarized documents provide her as much protection as going to court for guardianship would.

Ah, I didn't even realize that sort of thing could be legaling binding without a judges approval.
I have been lucky because the trouble mom got in was managable at first and by the time it became an issue that I had to discuss with her doctor, she was already passed the point of carrying on with it, I don't think she even remembers that there are bills to pay or things to buy.
In a way, I envy her.

susanT8403,

Durable POA's are responsible to see that bills are paid not out of one's personal money but from the assets of the person you have durable POA for.

Ted, my mom does not even know that two doctors have stated in notarized letters that she is incompetent to handle her own business. When her neurologist did the evaluation, he didn't even use the word incompetent or that he was even evaluating for this. He just looked at her and said, I think it is best for your son to now handle your bills with the POA you gave him years ago for now is the time for him to do it.

Ted,

I'm not talking about the kind of incompetence judgment as in getting guardianship. That is tough emotionally, but sometimes that bullet must be bit in order to protect the person. What I'm talking about is getting some medical backup statements that are legal by being notarized that state __ is no longer able to conduct their business in a business like manner, the medical reasons for this evaluation, their name and what kind of doctor they are and how long they have known the patient. It's the same type of document they will have to do for a incompetency hearing,.

I have the originals of such statements about my mother by her long time neurologist and by the doctor at the nursing home. The nursing home staff is away of this and a copy is in her files. My step-dad is so mentally out of it that he would just get all upset and not understand it although neither has filed taxes sine 2004 which they hid until last year.

Good advice, but keep in mind the emotional ramifications of an incompetence judgement. The priorty, I believe, is that this be a gentle, positive time of life for the aged.

Once the above is taken care of I'd get Durable POA if you don't already have it and then get your dad to a doctor to evaluate if he can conduct his business in a business like manner. If the doctor says no, then ask the dr. to put this in writing and it would sure be nice if a notary would be there also. Once the doctors says he's incompetent to handle his own business then, start taking charge of those finances using the authority of the durable POA!

It would be a good idea to see an elder lawyer and let him or her handle it do not call the credit card companies yourself let a lawyer handle it all.

thats a great idea, a garage sale! I didnt know that if you are POA during a specific time when they accrue bills, then I am responsible! even medical ones? oh lord, am I in trouble then!

You are not responsible for his debt unless you were Power of Attorney over his financial affairs before he made these purchases.
If the debt is really high, you may have to sell some of his assets to get the debt paid off. Otherwise you will be paying those high finance charges every month.
You would be surprised how much a garage sale will bring in.

PLEASE EXPLAIN : "CREDIT CARD SITUATION."

You are not responsible for another's credit card debt unless you are on the app. or on the card with your signature on file with them.

I would encourage you to speak with an attorney who specializes in elder law and get his/her best advice....Does you Father have dementia or perhaps another health issue that affects his ability to reason well??? I would NOT accept responsibility for the debt if I were you... take care, J

Thank you everyone! Your ideas have been so helpful, but it's more important to know that there are people out there who understand. Since my opening statement was limited by space, let me add that we do owe him some money from his years as a banker ( ! ) when he wrote us loans to start ranching. We pay him on a set schedule, but he's borrowed $8000 so far this year, which my husband is using Visa checks to give him as "he's my father and I can't say no". So it's just transferring his credit card debt to ours, essentially, and it's breaking us as we have three boys of our own to raise.
I was going to call the credit card company myself, but thanks to your wise advise, I will stick to letting him do the communication. I do have them convinced to sell their house, which, yes, Psmitty, has a second mortgage also, and moving into an apartment in a town closer to us. I convinced them they would be helping the grandsons out as they could work in town and stay with them.
My big question is this: he is paying $714 every three months and his wife is paying $680 for life insurance policies, insisting that "everything will take care of itself when I'm dead". I think they should just cancel the policies as we don't want any inheritance; we just want them to enjoy their later years without all this money worry. They have Social Security and a modest Retirement income. I think this line of thinking is just crazy -or am I the crazy one?
I will tell you this - I have already told my own boys to forget about inheritance, that they need to make their own way in this world. People who spend their lives waiting around for someone to die are sad people, indeed.
Thank you all so much!

I think the bankrupcy thing is a good idea. My father will have to do the same thing. He has a "mortgage" where he pays at least $1400 per month, after refinancing the house a hundred times to "pay off bills", plus a Sam's Club Discover card where he owes over $5K! I remember when he paid off that house in the 90's. He's 78 yrs old with this kind of outrageous debt. I am unable to help due to my mortgages and cost of living. He does have 2 grown sons living with him though who need to be paying that mortgage. I think I heard him say that he is going to call the BK attorney.....sigh...it's sad to see someone go out like this :-(

I am with Carol on this. DO NOT INSERT YOURSELF INTO ANY DISCUSSION WITH YOUR FATHER'S CREDITORS unless you have to exercise Financial POA and/or the advice of an Elder Law Attorney. The Creditor would like nothing better than to have YOU assume responsibility for your father's debt. Under current Federal law they can do this by simply recording your agreement on the phone to do so. This is one of the areas being addressed by the Financial Reform Act--if it ever gets passed into law. Your job for now is to protect your father's assets so that he will have something besides SSI to fall back on if he needs long term care or must move into an Assisted Living Facility. At the same time you have to look out for your own family if you have dependents.

In checking this out, in your behalf, this is what I found:

However much you dread it, you can make the debt conversation go more smoothly. Here's how:

Be upfront. "I prefer the direct approach: 'I know this is none of my business, but I'm concerned, and I want to ask you about your credit card issues,'" says Sharon Burns, author of "How to Care for Your Parents' Money While Caring for Your Parents." The first time, your parents might agree with you that it's none of your business. On the other hand, they may want to talk later, once they know you're clued in to the problem.
Look for an opening. An onslaught of credit card offers may indicate rising debt levels, so ask about it if you see a letter lying on the table: "Do you get a lot of these offers? Are you looking for a new credit card?" Or volunteer to help with the physical task of paying bills or filing an income tax return. You'll get a close-up look at their finances -- and a better sense of whether they're really in trouble.
Show your good intentions. When your parents understand that your concern about their debt stems from love and not a greedy scrabbling for inheritance cash, they're less likely to go on the defensive. Try saying, "I care about you, and I want to make sure you're as well taken care of as you deserve for raising us," or, "I want you to have smooth sailing as you go forward."
Offer collaboration. "Don't say things that imply they're not capable; that's every older person's fear," says Coon. Instead of telling your parents what they're doing wrong and dictating solutions, work together to brainstorm positive approaches to the problem and remind them that they're not the only ones in this situation.
Defuse hurt feelings. Despite your best efforts, the conversation may not go well. You can keep it from turning into a shouting match by keeping your own tone even-keeled and offering a measured response: "I can see that what I said has upset you, and that's not what I intended. I just don't want you to feel like you have to go this alone."
Hopefully some of these suggestions will be of help to you~
Hap

You are not responsible for anyone else's credit card debt, unless you signed the credit app or co-signed for a card also. No matter what they tell you ......spouses, heir (s), or children are not responsible for another's credt card debt/ The only exception to this rule is if you have an account at let's say a Federal Credit Union, and you have another loan on file with them, such as a car loan, or a mortgage, the it may be co-colateralized, which means that they are all tied together.
Sad story: When my husband passed away, he left credit card debt. He also had a car loan with only $315.00 left on the loan, AND the Credit Union took his car ( by siezure) to cover the credit card debt. I hired two lawyers ( one high profile) and they sided with the Credit Union!

I faced this situation with my parents several years ago. They did not come to me until it was too late to do anything without filing bankruptcy. They received free legal aid assistance through the local Legal Aid office but had to pay the bankruptcy filing fee. In their case, they had more than $10,000 equity in their home so it was taken into the bankruptcy and would have to be sold at auction. The trustee worked with me and I was able to purchase their house at the appraised value. I intended to treat it as rental property and have them pay me rent, but that did not evolve. I know not everyone is able to do what I did but in my case one of my parents was also ill and I could not let them be evicted and live in subsidized housing. Subsequently, the ill parent passed away less than 30 days after the discharge of the bankruptcy. As everyone said, don't legally take on responsibility for the credit card debt--it is a never ending debt with the interest. I feel for you and wish you the best as you help your dad get through this. Also, if you go the route of bankruptcy, once it is filed, the creditors are prohibited from calling your dad. The repeated calls was very stressful on my parents and I did not know it was going on for a long time.

The first thing I thought as well was bankruptcy, I dont know if u want to go this route, but sometimes lawyers will give u a free consult, so u can at least see what your options are! Definetly not your debt though right? and if not good, then u cannot be held responsible for it! But calm him down and let him know that you guys will find a way to figure it out! and Good Luck!! Let us know how it goes and I would be interested in knowing what the options are when u do find out something.........thanx

Would echo Ted and mare00. Really doubt bankruptcy is necessary.

Speak to the credit company, on his Behalf, and explain the situation. They can be more forgiving than you think. DO NOT ASSUME responsibility for this, or any other debt of his.

I think Carol had the best suggestion. Bankruptcy will protect assets like his home, vehicle, etc. At 89, those things should be sold to pay for his care in assisted living or nursing home if and when he needs it. Racking up enough debt to equal a payment of $1400 is a huge red flag and means it's probably time that you and your siblings start watching his spending, perhaps even get a Power of Attorney (PoA) so you can conduct business on his behalf. A PoA does NOT mean you're responsible for his debts - unless you abuse it and run up his credit cards, then the law will be after you. The most important thing is that you keep up with his utility bills and any supplemental health insurance, those companies will jump at the chance to drop anyone of advanced age! I would also go through his mail regularily - or have it come to you first to remove all credit card applications, catalogs or other junk where he could get into financial trouble.

I believe we should not rack up debt we can't pay off. That said, I don't want to sound like a jerk but - what kind of company would give huge credit limits to someone his age? I suspect some predatory practices - taking advantage of his age - to sell a credit card. In that case I sort of feel that bankruptcy is not so shameful. Those companies are the ones who should be ashamed!!

If your Dad does not have any monetary assets, the creditors cannot take his social security. Call the credit card company and explain that he is on SSI and you have to close his credit card account. The credit card companies should never allow someone whose income is SSI have a credit card in the first place. So it is their loss. If you get court papers regarding suit on this credit card bill; call them and tell them he is on SSI. Same goes for Court papers. If you need further assistance go through your Judicare System through you county who has attorneys that can assist you Pro Bono (free of charge).

Cannot believe that your Dad asked you to pay of his debts to the tune of $1,400./mo. As Carol said, do not make his debts your problem. Never intermingle your financial business with his or co-sign on loans, etc.
There are all kinds of reputable debt counseling services that are approved by the government. Doesn't Obama have some sort of debt forgiveness program? (saw something about it on TV).
Does your Dad have assets he can liquidate or borrow against?
Also, have him cut up his credit cards. Over-spending of this severity is an addiction and he cannot be trusted to use credit wisely.

I'd look into bankruptcy or at least credit counseling for him. This is not your debt. If he truly cannot pay, that will be figured out. Let him know he's not alone and there are options. You may want to consult a bankruptcy attorney.
Good luck,
Carol