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I have often seen people worried about their elderly parents who are buried in debt. Usually it is clear that the parents are collection proof. But, they will still be subject to dunning calls, court hearings, judgements, and liens on assets, and a lot of stress from worry.


So, my question is...can a POA file Chapter 7 on behalf of their parents?


There is no tax ramifications from chapter 7...any debt discharged is free of taxes on the discharged amount.


Typically, the parents will lose the house in chapter 7...but if they are already in a NH, and the children are left with the house being just a burden, (taxes, utilities, maintenance) why not have bankruptcy court take it? One way or another the house will be lost...if not BK, then to Medicaid later..or local property tax lien and sale for unpaid property taxes.

I live in my mother's house (my childhood home) and my mother will have to file Chapter 7 and in her DPOA I have the right to file bankruptcy on her behalf and we will not lose the house because my mother and I still live in it. The house is paid-in-full and I can pay all the expenses and up keep without my mother.

However, if no one is living in the home selling it may be the best way to go as others here have stated.

I was advise by an Elderly and a Bankruptcy lawyer. Perhaps it is best to speak to these types of lawyers as well.

Best of luck!
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worriedinCali May 17, 2019
But what about the required counseling courses? How will those be attended since you can’t attend on your mother’s behalf?
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Why not sell the house and sell or donate the contents? (I am assuming that there is still furniture and other items in the house) The money would be used to pay off any debts and if there is any remaining pay for the care of your parents.
This might be best for a lawyer that is well versed in Elder Law not just a lawyer that knows bankruptcy law.
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Katiekate May 18, 2019
If the proceeds just go to pay off debts...then geez, just let the bankruptcy court do it for you. Of course the BK trustee uses the proceeds to pay off the debt. However, if there is anything left over...it still goes back to the parent (and hence to pay the NH). Every State has a certain dollar amount of the home equity that is exempt. Meaning, even if there is more debt to pay off...the senior still gets the exempt equity from the house, and all the debt is still discharged even if there is still a balance due at the end of the process.

a Bk on the credit report of a senior in a NH is not going to have the slightest effect on the seniors’ life.
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Just wanted to say that we filed Chapter 7 and we were allowed to keep our home and car as long as we keep up the payments on them.
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Helpme1234 May 16, 2019
So you are saying you filed bankruptcy? Did you parent owe anything on the house?
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It will vary from state to state but in most states the POA must have a durable POA that states they can file bankruptcy and appear in court on behalf of the person they are POA for.

Seems most people here want to keep the house though but for those who do not, then chapter may be a smart thing to do.

But what about the required credit counseling? The POA can’t take the counseling courses on behalf of the person they are POA for.
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Katiekate May 17, 2019
I would think that a waiver could be had. Also..if you are financially responsible for the senior...why not take the counseling too?

I am sure a BK attorney would know, or be able to ask the district trustee.
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