If your husband owns the car loan individually, it is not your responsibility. Credit accounts likewise. That said, you will likely still be pressured to pay off his consumer debts.
To protect yourself, try on your own first and document every contact you have with all creditors. Phone calls, mail, faxes, in-person visits.
Obtain a free copy of your individual credit report from all 3 major credit bureaus - TransUnion, Equifax, and Experian. Don't give any creditor an opportunity to claim you owe if you never assumed responsibility.
1) As Financial Power-of-Attorney, you have the authority to conduct his business. Have this document in hand at all times.
2) Your credit reports will show you are not an account owner. Have these in hand at all times.
3) A copy of the car loan contract will show you did not co-sign. Have this in hand before contacting the auto lender.
Say upfront he went into a nursing home and will never be able to pay any bills from this point forward. Tell them you are in charge of handling all his affairs.
Emphasize (politely) you will not/can not take over his debts.
If none of this works for the car loan, get an attorney to put a stop to the run-around. If communications by phone and mail to other creditor are unsuccessful, bring that to the attention of an attorney.
No banks want to give up an account if they can find someone willing to assume the debt. It's expensive to repossess and re-market the car. It's expensive to write off credit card debt. So they look to family first and try to convince family to assume the debts. His creditors already know family doesn't owe for debts you've never been a party to, but hope families don't.
Since your credit reports can again be obtained by you for free every 12 months, one year after the debt is cancelled, check your credit reports again. Verify the car loan and other debt was not incorrectly marked as your debt. An attorney should be contacted if this happens to make sure it's done and over with.
Couple of different issues here imo: My understanding is that medicaid allows for one (1) car to be an exempt asset. If you all have two cars, it’s gonna keep him from eligibility. What to do to me kinda depends on if it would be better to sell the older less dependable one and keep the newer one IF the car payment is manageable & car fits your needs. Or get rid of both and get a newer one that is.
Medicaid aside, another issue will be about if you are a co-signer on either, if so, his debt is your debt. Or if it’s purely & truly his only. What happens kinda depends on the type of debt.
Car is secured lending, so they will do whatever to enforce the loan & are in a legal position to do so. If you need car, then either you can pay the monthly & insurance, gas & maintenance & do not change anything to the loan but just assume all costs quietly. If not paid, it defaults &. lender will do a repo eventually. If it’s joint debt, it will be on your credit report & affect your rating. Personally I’d try to not let it get to the default or repo stage as that can get ugly, but instead send a certified letter to whatever the correspondence address is on his loan as to his moving into a NH so defaulting on loan and schedule a return. Whatever you do, please please you always sign as “in your limited ability as DPOA for John Smith”, do not sign your name or as Mrs John Smith.
CC debt is unsecured lending. What seems to happen is that credit card lender (the OC aka original creditor & a banking group usually) will carry balance for a while & then goes into past due with increased APR & whatever late fees or other changes placed atop the balance. OC eventually writes it off. If it’s larger CC banking group, they will sue & go to court to get a judgement on him. They get local law firm who can file for judgement with a wage or bank garnishment. If you still share bank accounts, it doesn’t matter for the garnishment. You have to make sure his SS# not tied at all into your $ your accounts.
Usually Medicaid will want each of you to keep separate accounts as your income & your allowed assets not a factor for his Medicaid & not subject to a judgement against him; so his income - like SS$- just going into his solo account. No more shared accounts although you can be a signatory on his account & have it POD to you. If he gets a judgement, not all banks know not to allow a garnishment on a purely SS income or other protected income from being seized. If garnishment happens, can morph into a problem as Medicaid requires him to do a copay to the NH of almost all of his SS & whatever else income he has. Like with the car loan, I’d suggest you do a certified letter stating the situation to the OC ASAP & that his account to be closed as his only income source is SS, he’s in a NH & as such protected income from garnishment, judgement or bankruptcy. If you can catch it soon they may not sell it.
Otherwise OC will sell account to secondary debt collections. They will hound him & you relentlessly by phone and mail. Then they sell it to an even lower bottom feeder collections group. Your gonna have to learn to ignore them. They are relentless & ruthless.
the OC, as they write off the debt, can do a 1099-C to him for past due plus interest & fees. A 20k debt could easily go to $24,678.90. It is taxable income. Yes read that again.... it is taxable income & reported to IRS. If this is big CC debt $$$, could be quite a lot of taxes owed. Taxes imho you have to pay as IRS can attach his SS$ or other retirements. They aren’t protected from “supercreditors” like IRS or state taxing authorities. He cannot a supercreditor attachment have happen as he is required by Medicaid to do a copay or his income to the NH.
I don’t know if bankruptcy is feasible if he’s not competent & cognitive. I think for BK now, theres required debt counseling course, filing questionnaire & appear before a judge.
To protect yourself, try on your own first and document every contact you have with all creditors. Phone calls, mail, faxes, in-person visits.
Obtain a free copy of your individual credit report from all 3 major credit bureaus - TransUnion, Equifax, and Experian. Don't give any creditor an opportunity to claim you owe if you never assumed responsibility.
1) As Financial Power-of-Attorney, you have the authority to conduct his business. Have this document in hand at all times.
2) Your credit reports will show you are not an account owner. Have these in hand at all times.
3) A copy of the car loan contract will show you did not co-sign. Have this in hand before contacting the auto lender.
Say upfront he went into a nursing home and will never be able to pay any bills from this point forward. Tell them you are in charge of handling all his affairs.
Emphasize (politely) you will not/can not take over his debts.
If none of this works for the car loan, get an attorney to put a stop to the run-around. If communications by phone and mail to other creditor are unsuccessful, bring that to the attention of an attorney.
No banks want to give up an account if they can find someone willing to assume the debt. It's expensive to repossess and re-market the car. It's expensive to write off credit card debt. So they look to family first and try to convince family to assume the debts. His creditors already know family doesn't owe for debts you've never been a party to, but hope families don't.
Since your credit reports can again be obtained by you for free every 12 months, one year after the debt is cancelled, check your credit reports again. Verify the car loan and other debt was not incorrectly marked as your debt. An attorney should be contacted if this happens to make sure it's done and over with.
My understanding is that medicaid allows for one (1) car to be an exempt asset. If you all have two cars, it’s gonna keep him from eligibility. What to do to me kinda depends on if it would be better to sell the older less dependable one and keep the newer one IF the car payment is manageable & car fits your needs. Or get rid of both and get a newer one that is.
Medicaid aside, another issue will be about if you are a co-signer on either, if so, his debt is your debt. Or if it’s purely & truly his only. What happens kinda depends on the type of debt.
Car is secured lending, so they will do whatever to enforce the loan & are in a legal position to do so. If you need car, then either you can pay the monthly & insurance, gas & maintenance & do not change anything to the loan but just assume all costs quietly. If not paid, it defaults &. lender will do a repo eventually. If it’s joint debt, it will be on your credit report & affect your rating. Personally I’d try to not let it get to the default or repo stage as that can get ugly, but instead send a certified letter to whatever the correspondence address is on his loan as to his moving into a NH so defaulting on loan and schedule a return. Whatever you do, please please you always sign as “in your limited ability as DPOA for John Smith”, do not sign your name or as Mrs John Smith.
CC debt is unsecured lending. What seems to happen is that credit card lender (the OC aka original creditor & a banking group usually) will carry balance for a while & then goes into past due with increased APR & whatever late fees or other changes placed atop the balance. OC eventually writes it off. If it’s larger CC banking group, they will sue & go to court to get a judgement on him. They get local law firm who can file for judgement with a wage or bank garnishment. If you still share bank accounts, it doesn’t matter for the garnishment. You have to make sure his SS# not tied at all into your $ your accounts.
Usually Medicaid will want each of you to keep separate accounts as your income & your allowed assets not a factor for his Medicaid & not subject to a judgement against him; so his income - like SS$- just going into his solo account. No more shared accounts although you can be a signatory on his account & have it POD to you. If he gets a judgement, not all banks know not to allow a garnishment on a purely SS income or other protected income from being seized. If garnishment happens, can morph into a problem as Medicaid requires him to do a copay to the NH of almost all of his SS & whatever else income he has. Like with the car loan, I’d suggest you do a certified letter stating the situation to the OC ASAP & that his account to be closed as his only income source is SS, he’s in a NH & as such protected income from garnishment, judgement or bankruptcy. If you can catch it soon they may not sell it.
Otherwise OC will sell account to secondary debt collections. They will hound him & you relentlessly by phone and mail. Then they sell it to an even lower bottom feeder collections group. Your gonna have to learn to ignore them. They are relentless & ruthless.
the OC, as they write off the debt, can do a 1099-C to him for past due plus interest & fees. A 20k debt could easily go to $24,678.90. It is taxable income. Yes read that again.... it is taxable income & reported to IRS. If this is big CC debt $$$, could be quite a lot of taxes owed. Taxes imho you have to pay as IRS can attach his SS$ or other retirements. They aren’t protected from “supercreditors” like IRS or state taxing authorities. He cannot a supercreditor attachment have happen as he is required by Medicaid to do a copay or his income to the NH.
I don’t know if bankruptcy is feasible if he’s not competent & cognitive. I think for BK now, theres required debt counseling course, filing questionnaire & appear before a judge.
You might want to post your question on www.Bogleheads.org