Credit card company going after my dad. He has no assets, so even if they sue him, they won't get anything. What do I do now?

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My Mother was the primary bill payer for my parents for almost all of their marriage. During the last couple of years of her life, she was starting to battle dementia and ran up big credit card debt on two cards, often paying one bill with the other card. Since her death last year, my Dad now has big debt on both cards ($15,000 on one; $9,000 on the other) that he cannot pay. He can't even make the minimum payments on them, and now the one with the larger debt is suing him for the balance. He has no assets, so even if they sue him, they won't get anything. What do I do now? Do I seek legal help?

Answers 1 to 10 of 12
Top Answer
Gracie, how were the cards held? Were they held jointly, i.e., your father and mother were both named as primaries when the account was opened, or was one parent primary and the other only had signatory authority? That as I remember is the key to liability.

There's a good article on how to distinguish who's liable vs. who can sign but isn't liable, but I can't find it right now.

But since your father has no assets, he's "judgment proof." Still, he needs to respond to the suit, generally w/I 30 days of being served.

This is a matter for an attorney's help at this point. Typically he or she would ask for an extension of time to answer, then meet with your father to determine the facts of the situation.

An attorney can advise you how she/he would handle preparation of an answer, and future work, based on your father's judgment proof status.

But definitely get an attorney. If your father doesn't respond, a judgment can be entered against him for the full amount of the debt, subject to accruable interest at the legal rate in his state.

Good luck. I'm sure this must be unsettling, so let a legal pro help you.
I am NOT an attorney, but I think I would just contact the creditors and provide documentation of no assets and no hope of future assets (assuming that's the case). I wouldn't spend money on an attorney to do that for me. Then if they continue to pursue judgement, and get one, who cares? BUT that's my opinion and only that.
I sort of feel if Gracies dad cant afford even the minimum payment affording a lawyer is off the table too. I don't know what his age is,, but will bad credit really matter at this point? I'd also call the company, let them know the situation, and let it fall where it may.
Thanks for your answers! My Dad is 88 with only $1200 in S.S. income. He has no assets (besides an old car), rents his home, and his life insurance is only worth $10,000 which will barely cover his burial expenses, so no, there's no way they're getting any money from him. I'd pay for the attorney, as I can afford a consultation and small fee just to get a response letter written, but I hope that would be the end of it. The cards were in both of my parents' names, so yes, he'd be liable. Needless to say, I'm going to have to start paying his bills for him as well in order to keep an eye on these things. If he didn't have the darn credit card debt, he could continue to live in his home and afford all of his expenses, but the minimum payment on the card that is suing was over HALF of his monthly income, and then you tack on the interest plus late fees, etc. etc.
Everyone can get 1 free copy of their credit reports 1x/yr from the 3 major credit agencies. Wouldn't this show who is the account owners for each card? Whose name the account is in? Once you know who the account owner is, it will be easier to deal with collection agencies.
In NYS I believe both partners are responsible for the others debt even if they are not on the card.
Have you considered bankruptcy? Don't know how that would work but I see lawyers advertising for a few hundred.
Maybe now is the time to sign up for subsidized housing as there is often along waiting list.
can he get help with food stamps, heating Etc?
I think he will also get some of Mom's social security so look into that if she ever worked.
Don't worry about it. They can't do anything to hurt him. There are no debtors prisons anymore. We have the same issues with my husband's parents and they will eventually give up and write it off as a loss on their taxes.
I wouldn't let this debt be the thing that puts him out of his home.
There was a time, and it may be that this option still exists, when creditors could not only lien the home but could attach personal possessions as well.

Whether or not a life insurance policy could be attached as an asset is not something I could answer.

This is one reason why you need an attorney who's familiar with liens.

If your father owns the house free and clear, the credit company could get a judgment (easy if he doesn't respond to the complaint) against the house. Bye, bye house as an asset.

Don't forget that judgments bear interest at the allowable state rate.
Gracie - your dad is likely “judgement proof”; he has no real property assets that a lien can be placed on or a salary that can be attached. His SS income can only be attached by the IRS or other governmental entities. CC companies can’t get his SS$, although that won’t stop collectors from doing whatever to convince him, you or whomever in the family to pay the debt.

What to do, well to me kinda depends on where these two CC are in the debt collection scenario...... if it’s still in the payment system for the OC (original creditor), I’d suggest what Talkey wrote and your dad contacts them in writing & hopefully it gets written off. But if it’s past that and has been sold by the OC to debt collectors, it’s another system as those send an initial letter that requires a response within 30 days, & if not essentially the debt is consider valid and then they hound till it’s paid or if it’s ignored they sell the debt to another collector firm (yet another cycle) or go to court to get a judgement. Actually filing for judgements has all sorts of costs for the collectors, so often it’s a bluff by them to consumers.

If dad has no house, no salary, no income but only SS, he’s judgement proof.
But I’d be concerned that if you should start paying on his debt, it somehow becomes your debt. I’d try to do all in writing by “dad”. No phone calls.

OC will likely write it off for debt, plus fees and interest. So 9k debt could morph to 12k. Each will produce a1099-C Cancellation of debt sent to dad for the tax year the OC wrote it off. Probably sent Jan. 2019 for 2018 taxes as we’re already in Dec. Now that 1099-C will be something to be dealt with as taxes are due to the IRS on the $ written off as it’s viewed as taxable income. IRS is a “ super creditor” and can attach $ from his SS to pay on taxes due. Dad will need to file a 1040 & 982, & hopefully get his income zeroed out; imo kinda needs a cpa or tax pro to do as they are sticky.

The situation your dad is in is pretty common for those who go into a facility and onto Medicaid. Medicaid requires their income to become a copay to the NH. So no $ for old CC debt, car note, house costs, etc. Really they end up walking on all their existing debts, unless family pays it.

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