As POA of my Mom how should I let her creditors know she cannot pay them anymore due to entering a NH? - AgingCare.com

As POA of my Mom how should I let her creditors know she cannot pay them anymore due to entering a NH?

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My Mother had a stroke 4 yrs ago and I became her POA. Now she is entering a nursing home on Medicaid and can no longer pay her Credit card debt. How should I handle this? Should I write them a letter? Declare bankruptcy for her? She ran up bills on credit cards by phone and internet. I fought with her but to no avail. What course should I take? I signed every paper by signing her name and then I put signed by , my name, POA. Do I have to pay her finances? I have been told no but I want to be sure as to how I should handle this.

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Sideways - the debt collectors will be relentless. You are not responsible for the debt but that won't stop the collectors from hounding you.

Depending on how many and how much debt mom has, you might want to do a couple of things to make your life and sanity easier. My late MIL was real financial terrorist and it took years (& a natural disaster) for the fall out from her stuff to go away…….I would suggest:
- send all letters certified and with a return registered mail card (the green card) from the USPO. This will run about $ 8.00 a letter and well worth the investment. The green card gets returned to you with a date stamp and signature which you can copy and send to future collection companies to keep them at bay. What happens is that the debt will be sold and re-sold again & again. Even if Chase, Discover, etc have written it off. the debt collectors who buy the debt are true bottom feeders and will be relentless…..now to keep their correspondence at a distance, I'd suggest you go an rent a mail box for mom. All the letters you send have this as mom's new address and in the letter state clearly & in BOLD that any and all contact must in writing to this address. Some UPS stores have mailboxes and then there tend to be some MailBox Etc. type of stores by college & university campuses. Rent one for mom and that is now her new address for everything. this way your home address doesn't get crossed with mom's debt. If mom's name is close to your name, this can be a problem for your credit. The rented box helps in keeping that from happening and then you go once a week to see what's there to deal with. You don't want the collectors to start contacting her @ the NH either.

Also run a big 3 credit check on mom this month. You can do this on-line as her DPOA. We all get 1 free report a year from them, so take advantage of this. There may be some older debt out there you may not be aware of, but it will be on the credit report.

As this is January, you want to be on the look-out for a couple of things that are important for mom's finances: her SS should send out the statement for 2014. If she is also getting a retirement, they too will send out a statement for 2014. Keep these someplace you can access easily.

Also be on the look out for mom getting any 1099-C's. A 1099-C is a Cancellation of Debt and is reportable to the IRS for income. 1099-C's are imho kinda loco to figure out what to do with. Any business who writes off a debt can issue a 1099-C and it doesn't always get done for the year in which the debt was written off either.
yeah, tons of fun there! 1099-C's are done routinely for those that do foreclosures's or short-sales and the IRS info is geared to how to deal with that. But for those that get a 1099-C for cancellation of cc debt, it is all "phantom" income and taxable and can sometimes cause income problems for Medicaid. The actual amount can morph up due to interest, late fees, etc, too. The 1099-C is reported to IRS as income so could surface as income if your state dovetails with IRS. If mom gets one, you should think about contacting a tax pro to deal with filing taxes for mom and them doing the impoverishment forms for her. imho it is not a DIY filing. Good luck & keep a sense of humor in all this!
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NO you do not have to pay her bills. Just make up a form letter advising them she is confined to a nursing home as of (the date) and that she is on Medicaid. Tell them specifically NOT to call you, that you are only the POA. If any unscrupulous bill collectors call you, tape the call and tell them " I am tape recording this call and if you ever call me again I will report you to the state attorney general's office. Do you understand me?"
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The idea is to turn yourself into a wall. Never apologise, never explain (or not more than you absolutely have to). Compose a standard form letter, which you then customise, print and send to anyone submitting invoices, reminders, polite death threats, etc. along the lines of:

Dear Sir

Ref: [your mother's name and address, plus any relevant account number(s)].

Please be advised that as of [date], Mrs Bloggs' remaining assets and income will be sequestered in consequence of her permanent move into Medicaid-funded nursing care.

Please address any further correspondence to [Box No. (great idea from igloo!)]. I look forward to receiving your acknowledgment of this advisory notice by return.

Yours faithfully

Alice B Toklas, POA pp Mrs Bloggs.

You thus give reputable creditors a small window of opportunity to make reasonable proposals for ameliorating the debt; and if that isn't possible you still have the option of, at least, expressing regret about it if you feel so inclined. This isn't your fault; and it most certainly is not your liability. I shouldn't shed too many tears for the credit card companies.
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It is not supportive to ask someone why they allowed an incompetent woman to run up the credit cards in the first place. She told us that she fought her to no avail. I know how hard this can be firsthand. Unless someone is declared incompetent you cannot just take away their credit cards. As her POA she will not be held responsible. Who really cares if they ruin someones credit that is in a nursing home. And if she has an estate they will take it for her care. Medicare does not care about any debts they have. They take the social security. She is dealing with enough being POA. I would not suggest adding more stress trying to file bankruptcy ect. When in the end it doesn't really matter.
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Thank you to those who have answered my question. I am grateful for this site and the people that help all of us. We do need to keep helping each other. More and more of my friends are experiencing issues with their parents and loved ones. Our health care system is failing a lot of these people. Keep being tenacious, keep at it, all will be alright. It always is if you keep a positive frame of mind and attitude.
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If you can afford the $1,500.00, bankruptcy will save you aggravation and stress. It is free to talk to a bankruptcy attorney.
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I have been told by an attorney, that I am not responsible for my Mother's debt. I do send a form letter when she goes on Medicaid. Getting the PO Box was very good advice. Then he told me I will not be hassled and it affirms that she is not connected to me. Debts are not carried over to family members or POA's when parents die.
margarets, you apparently got bad advice. that is not correct.
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Aging & dementia is a stress test & reveals all of the weaknesses in our health care system, social services, mental health care, financial services, and inside the family system.

If our society decides to tackle dementia comprehensively across all areas impacted by it, we might find it improves other aspects of our society. For example, by compelling ADA accommodations for physical disabilities, we now have curb cuts used by parents with baby strollers and pedestrians with grocery carts and skateboarders. By making things easier for one smaller group of the population, we've improved quality of life for others as. If our society gets better at dealing with dementia, we might find other things get better too. So connecting how to deal with financial problems to dementia related health care problems is a useful though imperfect development. This site - imho - does a tremendous service of providing different viewpoints on this. And for letting others know when they seem harsh - like what Margaret has been viewed as doing.

Dementia changes the personality of the individual - it effectively invents a new personality. Sometimes that personality is docile and more loving and trusting. Most of the time it is not - it is deceitful, paranoid, petty. Depending on the type of dementia, this can be a decades long decline. Being DPOA does not mean being a "helicopter" for your elder in checking and going through everything they do. What you can (or better yet) cannot do is limited….if ma wants to go and get order hundreds of dollars of from Coldwater Creek or thousands from Home Shopping Network, that is their choice and right to do until they are legally declared incompetent and a guardianship determined.

My mom has Lewy Body dementia was viewed by society as sharp as a tack in many ways till her early 90's, so it was easy enough to shrug off odd behavior as "senior moments" that in retrospect should have set off alarms. There are other factors in denial as well -- admitting she was declining would immediately have saddled us with pressing decisions. My mom managed her small world very well then would have a paranoia episode, it was when the paranoia was constant (they were stealing from her every day sort of stuff), that I started her to get the medical file to show the need for LTC @ a NH. For my MIL, who was most difficult, it was a fall that made decision making happen and she went into a NH but before that she fought any oversight into the clusterF* that her finances were.

I was just at my mom's home dealing with repairs (thank you Polar Vortex!) and went through yet another box of paperwork & notes from my mom from a few years ago that I saw just how much of the lost-cognition iceberg lay below a competent surface for my mom. For me, thinking of dementia as an iceberg is a good analogy. Something always seems to surface….and collide.
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Margarets, this is a support group not a collection agency. Maybe its just me but you are rubbing me wrong today.
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pstiegman is correct. You do not have to pay. If your mother in mentally incapacitated, send the documentation copies of the letter along with you only being POA.
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