Are people with Alzheimer's responsible for credit card debt?


Q: My mom has a lot of credit card debt. Are people who get in debt because of Alzheimer's disease liable?

A: Your question raises a difficult issue. A person who incurs a debt is considered legally responsible for the debt unless you can prove that she was not competent when she signed up for whatever it was that cost so much.

I would immediately seek legal advice as to whether you can get the debt waived, based on her inability to understand what she was doing when she got into this debt. It is possible to do so, but it will cost money for attorney's fees to help you. There may be reduced-fee attorneys available for this kind of matter through your county bar association, AARP's list of lower cost attorneys and through various other legal services organizations serving the elderly.

I suggest that you get moving immediately. There may be other problems besides the credit card debt. A review of all of mom's financial records is in order, and now.

A larger question is how the problem happened in the first place. If mom was developing dementia, it did not happen overnight. Family members must have known that mom had memory problems for quite some time before the debt issue came up. When any adult child notices that a parent has memory loss, it is important to persuade the elder to get to a doctor as soon as possible.

A diagnosis can be a warning that everyone needs to step up and take protective measures to prevent mom from doing foolish things with money, especially if finances are limited. Loss of the ability to understand money, do math or realize the consequences of placing orders or giving money to others can occur in the earliest stages of dementia. The elder may be able to live independently and seem pretty well, but dementia is a tragic and sneaky thief that steals ability invisibly. A person with dementia absolutely needs to plan ahead and appoint an agent on a durable power of attorney (DPOA) for finances to prevent the kind of nightmare debt you now have to deal with in the situation you describe.

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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.
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.