My mother has just been moved to a nursing home under Medicaid.

She has approximately $15,000 in credit card debt that has made consistent monthly payments on.

My brother has been living with her for 3 years taking care of her and the only income they have had is my mom's social security check that they have used each month to pay bills and buy food.

My brother and I have joint power of attorney.

She owns her house, mortgage free, which he would like to continue to live in and return to work since he has time now (she required 24 hour care)

He will return to work within the next few weeks. As of May 1 there will no longer be any social security benefits to help with her credit card debt and utilities.

How do we handle notifying the credit cards of the situation?

The property has been in our family for 50 years so even when she passes away we do not want to sell the property or have the creditors have access to the property if we have to sell it. If we cannot pay the taxes, utilities, we will need to sell but do not want creditors have access to the proceeds of the sale of the property.

Any advice is so greatly appreciated.

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A house with no mortgage represents an asset that credit card companies could lien if the debts aren't paid, if they sue, and if they get a judgment, UNLESS your mother is considered judgment proof, which could happen if Medicaid liens the house.

I think in this situation, it's better that Medicaid look to the property to offset its costs than to allow it to be encumbered by credit card debt liens.

I think I would get an appraisal of the house, do some break even analysis to determine when the house would become an asset that Medicaid could lien, and speak with your mother's doctors to get an idea of her longevity.

It wouldn't hurt to get an attorney as Pam suggests to find out if there's also a way to protect the house from the credit card companies (asset shielding), but you probably realize that even though the house has been in the family for years, the credit card companies to have a right to go after the funds they've advanced.

Is there a possibility that the family could work together to pay off the credit card debts?
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You cannot sell the property or Medicaid will stop. Brother needs a job ASAP to pay his utilities and other expenses to keep living there. He may lose the house anyway to the credit card companies and Medicaid Estate Recovery Program (MERP). You really should sit down with a lawyer about how to handle this.
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