This is my experience with creditors and my elderly father:
He went into debt getting the house fixed up to go on the market after mom died. He was not thinking clearly and we didn't realize this. After the house sold we assumed he paid off the debt. He moved away (ran away, actually). He was in much pain from the loss of my mom.
Close to 2 years later he came back to town and moved in with us. I became aware of his debt and got him into a credit counseling program. This worked for over 5 years. Once he went into rehab and it was determined that he would never get out I kept up with his bills. I had POA but as long as I was paying no one cared whether I had POA or not as long as the bills were paid.
Once he spent down and was going on Medicaid we made the decision to stop paying his bills. He was practically broke and his mind was going and we knew he couldn't last too much longer. What little money he did have we'd need for funeral services, etc. But I was still living in the house and that damn phone rang off the hook with creditors. I tried to talk to them all one by one, explaining the situation, I asked them to not call anymore, I would return a call using my cell phone (big mistake) and then the creditors would call MY cellphone. I made the rounds again asking that they please stop calling and explaining to them that they were calling on MY cell phone and I had nothing to do with his debts. I was inundated with mail for my dad and I just put up with it. Eventually I just blocked all the calls. Once my dad died I began calling his creditors and none of them gave me any problems. A few asked if there was an estate (there wasn't) and a few asked if there was a spouse (there wasn't). I had the death certificate ready to mail if requested but none of the creditors asked for a copy. They were very nice when I called and told me that the accounts would be closed out. The phone calls stopped.
It was maddening, I must admit. I was trying to do the right thing by explaining to these people the situation with my dad but until he died they called me constantly. When my dad lived with me I used my cell phone but I kept the land line for my dad's sake. Once we realized my dad would never be coming home we moved and got rid of the land line so the creditors used my cell phone and they had the number because I had made the mistake of calling them from it. Lord knows I tried to get the calls to stop but until my dad died and even for a few weeks after I still received calls.
I was never worried about being responsible for my dad's debt because my name wasn't on anything. It was solely his debt. No one ever threatened me to come after me for my dad's debt and from what I understand, unless there's a spouse in the picture caregivers ARE NOT responsible for our loved ones debt. Only a spouse can be on the hook, not an adult child who was/is a caregiver.
If these seniors have a fixed income, how are they spending more than they take in? Unless of course it is CREDIT CARDS! Cut up the credit cards, seek credit counseling, file bankruptcy, or make a deal with the creditors. Sooner or later there will not be enough money to pay rent/mtg. or food. Most of our U.S. is in this situation, so theirs is not unusual. It takes time to get into debt, and it will take time to get out. When one dies, the estate still has to pay the debts.
When my step-father passed away, my mother was burdened with incredible credit card debt. We decided the best thing to do was file bankruptcy for her. It turned out to be the best decision for us.
1099-C, Cancellation of Debt income issues: One thing about CC and other written off debts to really pay attention to is what happens when it is written off by the debt holder. The CC company or any other debtor, when they write it off, can issue you a IRS form 1099 - C for the full debt & fees & late charges. They do NOT have to do it in the year they turned it over to collections either, it could be the following year or two. So a 10K debt morphs into 15K with fees.
A 1099-C is reportable and TAXABLE INCOME! The IRS gets their copy of the 1099-C as does the person who had the debt written off.
For those on Medicaid or other programs in which being "at-need" or requiring low income to be accepted, getting a 1099-C can kick them off of programs as their "income" exceeds the set Medicaid or other limits.
The fact that the "income" is all phantom and not real $, doesn't matter, the 1099-C amount is still fully reportable and taxable income to the IRS.
If you or your elder gets a 1099-C, you have to file taxes for that year and get them to show impoverishment to zero out whatever phantom income the 1099-C is so there is no future problem with Medicaid or whatever other program that requires they are at poverty level.
To show impoverishment you would need to do a IRS Form 982, which does an INSOLVENCY EXCLUSION and file with the worksheet to your taxes. For me, Form 982 was totally loco to try to figure out and really I think you need to get a tax professional to do this as it is not the usual form to do correctly.
It sounds like they at least need advocacy. Better yet, guardianship for the financials and legals.
Have you any idea the source/reasons for the bills? Is it mostly just shopping? OR?
Commonly, bills get left unpaid when someone on fixed income accrues medical debts. The remaining spouse is little likely to afford paying those off. Bills trickle in sometimes up to 2 years later. Some creditors ship bills to collections, before even notifying the debtor. Someone needs to sort all that out, to see how best to proceed.
If elders have been racking up credit card debt, I would ask, are they of sound mind, or ignorant, or don't care about consequences?? Are they hoarders? Do they have addictive behaviors? Do they have any level of dementia?
All that will be taken into account when choosing a path to take to remedy the situation. IF they are NOT of sound mind, for heavens sake, get rid of the cards & contact creditors, letting them know, in writing, return receipt requested, that the people named on the cards are not mentally responsible, that the card needs closed, and they need to be reported to the credit reporting agencies as "bad debts". Notify the credit reporting agencies of the problems, hope they put notice on the reports, warning other potential creditors from setting up accounts. .
IF it's medical bills, or credit cards used to pay medical bills.... 1. See if DSHS can help pay outstanding medical bills--usually, that means the last 3 months; this usually works for those with incomes under about $1400 per month, but you can contact your local SHIBA representative, to ask more questions; also, your nearest Area Agency on Aging.
2. Remainders could be bankrupted upon then. Medical bills and credit cards are listed separately in the documents, and are counted differently--as in, many understand medical debts, but they are far less understanding of bad spending habits on stacks of credit cards.
3. There are a few key words / phrases to get creditors/collection agents from harassing you. Like: "The person you are pursuing was medically indigent, and is now dead." "There was NOTHING left in his estate to pay anything else." "STOP harassing the family...." " There is no estate." "The remaining spouse has nothing to pay with, and is elderly and frail." "Stop harassing her/them/ family" " The person you pursue for this debt is mentally and/or emotionally incompetent to handle their debts; stop harassing them", and/or, "we are seeking legal help to get this all straightened out" [[it's always best put into writing, sent return receipt requested so you know it got to them]]
Some advice that was given to us several years back:
==A] NEVER EVER combine bills into one loan. Rolling multiple debts into a single bill-payer loan, prevents being able to bankrupt on it later, if things get worse.
==B] Medical providers may urge you to pay medical bills using credit cards: AVOID THIS LIKE THE PLAGUE: it also puts the bills into a different category, making it more problematic to bankrupt on them.
Get all the paperwork together. Make an appointment with the free legal at the closest Area Agency on Aging--you should be able to talk with a lawyer, for free, for at least 1/2 hour. If they can't answer the questions, they should be able to refer you to who can answer, and, maybe also for free. MANY lawyers offer 1st half hour free consult...make a list of questions, and start making dates for those, but beware: Lawyers will go sideways and need re-focused on answering your questions as short and to the point as possible, without carrying on sideways! Take the paperwork to those meetings, ask the list of questions you've prepared.---even if it takes several free consults to get the answers. ---Include: what's needed to get guardianship, since they cannot keep themselves out of debt, and need someone to handle their finances and legal things, to prevent them becoming street-people. .
He went into debt getting the house fixed up to go on the market after mom died. He was not thinking clearly and we didn't realize this. After the house sold we assumed he paid off the debt. He moved away (ran away, actually). He was in much pain from the loss of my mom.
Close to 2 years later he came back to town and moved in with us. I became aware of his debt and got him into a credit counseling program. This worked for over 5 years. Once he went into rehab and it was determined that he would never get out I kept up with his bills. I had POA but as long as I was paying no one cared whether I had POA or not as long as the bills were paid.
Once he spent down and was going on Medicaid we made the decision to stop paying his bills. He was practically broke and his mind was going and we knew he couldn't last too much longer. What little money he did have we'd need for funeral services, etc. But I was still living in the house and that damn phone rang off the hook with creditors. I tried to talk to them all one by one, explaining the situation, I asked them to not call anymore, I would return a call using my cell phone (big mistake) and then the creditors would call MY cellphone. I made the rounds again asking that they please stop calling and explaining to them that they were calling on MY cell phone and I had nothing to do with his debts. I was inundated with mail for my dad and I just put up with it. Eventually I just blocked all the calls. Once my dad died I began calling his creditors and none of them gave me any problems. A few asked if there was an estate (there wasn't) and a few asked if there was a spouse (there wasn't). I had the death certificate ready to mail if requested but none of the creditors asked for a copy. They were very nice when I called and told me that the accounts would be closed out. The phone calls stopped.
It was maddening, I must admit. I was trying to do the right thing by explaining to these people the situation with my dad but until he died they called me constantly. When my dad lived with me I used my cell phone but I kept the land line for my dad's sake. Once we realized my dad would never be coming home we moved and got rid of the land line so the creditors used my cell phone and they had the number because I had made the mistake of calling them from it. Lord knows I tried to get the calls to stop but until my dad died and even for a few weeks after I still received calls.
I was never worried about being responsible for my dad's debt because my name wasn't on anything. It was solely his debt. No one ever threatened me to come after me for my dad's debt and from what I understand, unless there's a spouse in the picture caregivers ARE NOT responsible for our loved ones debt. Only a spouse can be on the hook, not an adult child who was/is a caregiver.
One thing about CC and other written off debts to really pay attention to is what happens when it is written off by the debt holder. The CC company or any other debtor, when they write it off, can issue you a IRS form 1099 - C for the full debt & fees & late charges. They do NOT have to do it in the year they turned it over to collections either, it could be the following year or two. So a 10K debt morphs into 15K with fees.
A 1099-C is reportable and TAXABLE INCOME! The IRS gets their copy of the 1099-C as does the person who had the debt written off.
For those on Medicaid or other programs in which being "at-need" or requiring low income to be accepted, getting a 1099-C can kick them off of programs as their "income" exceeds the set Medicaid or other limits.
The fact that the "income" is all phantom and not real $, doesn't matter, the 1099-C amount is still fully reportable and taxable income to the IRS.
If you or your elder gets a 1099-C, you have to file taxes for that year and get them to show impoverishment to zero out whatever phantom income the 1099-C is so there is no future problem with Medicaid or whatever other program that requires they are at poverty level.
To show impoverishment you would need to do a IRS Form 982, which does an INSOLVENCY EXCLUSION and file with the worksheet to your taxes. For me, Form 982 was totally loco to try to figure out and really I think you need to get a tax professional to do this as it is not the usual form to do correctly.
Better yet, guardianship for the financials and legals.
Have you any idea the source/reasons for the bills?
Is it mostly just shopping? OR?
Commonly, bills get left unpaid when someone on fixed income accrues medical debts. The remaining spouse is little likely to afford paying those off.
Bills trickle in sometimes up to 2 years later. Some creditors ship bills to collections, before even notifying the debtor.
Someone needs to sort all that out, to see how best to proceed.
If elders have been racking up credit card debt, I would ask, are they of sound mind, or ignorant, or don't care about consequences??
Are they hoarders? Do they have addictive behaviors? Do they have any level of dementia?
All that will be taken into account when choosing a path to take to remedy the situation.
IF they are NOT of sound mind, for heavens sake, get rid of the cards & contact creditors, letting them know, in writing, return receipt requested, that the people named on the cards are not mentally responsible, that the card needs closed, and they need to be reported to the credit reporting agencies as "bad debts".
Notify the credit reporting agencies of the problems, hope they put notice on the reports, warning other potential creditors from setting up accounts. .
IF it's medical bills, or credit cards used to pay medical bills....
1. See if DSHS can help pay outstanding medical bills--usually,
that means the last 3 months; this usually works for those with incomes under about $1400 per month, but you can contact your local SHIBA representative, to ask more questions; also, your nearest Area Agency on Aging.
2. Remainders could be bankrupted upon then.
Medical bills and credit cards are listed separately in the documents, and are counted differently--as in, many understand medical debts, but they are far less understanding of bad spending habits on stacks of credit cards.
3. There are a few key words / phrases to get creditors/collection agents from harassing you.
Like: "The person you are pursuing was medically indigent, and is now dead." "There was NOTHING left in his estate to pay anything else." "STOP harassing the family...." " There is no estate." "The remaining spouse has nothing to pay with, and is elderly and frail." "Stop harassing her/them/ family"
" The person you pursue for this debt is mentally and/or emotionally incompetent to handle their debts; stop harassing them", and/or, "we are seeking legal help to get this all straightened out"
[[it's always best put into writing, sent return receipt requested so you know it got to them]]
Some advice that was given to us several years back:
==A] NEVER EVER combine bills into one loan. Rolling multiple debts into a single bill-payer loan, prevents being able to bankrupt on it later, if things get worse.
==B] Medical providers may urge you to pay medical bills using credit cards:
AVOID THIS LIKE THE PLAGUE: it also puts the bills into a different category, making it more problematic to bankrupt on them.
Get all the paperwork together.
Make an appointment with the free legal at the closest Area Agency on Aging--you should be able to talk with a lawyer, for free, for at least 1/2 hour. If they can't answer the questions, they should be able to refer you to who can answer, and, maybe also for free. MANY lawyers offer 1st half hour free consult...make a list of questions, and start making dates for those, but beware: Lawyers will go sideways and need re-focused on answering your questions as short and to the point as possible, without carrying on sideways!
Take the paperwork to those meetings, ask the list of questions you've prepared.---even if it takes several free consults to get the answers.
---Include: what's needed to get guardianship, since they cannot keep themselves out of debt, and need someone to handle their finances and legal things, to prevent them becoming street-people. .