Medicaid planning - how to pay of CC bills? - AgingCare.com

Medicaid planning - how to pay of CC bills?

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My Mom has a lot of CC debt and I have no idea what to do about it. She also has a burial plot but her funeral costs would still need to be covered. Right now she is still living in her home but she really cannot live alone anymore and I started looking into assisted living. I assume I should find a lawyer but the last one I called was $10k and I that seems so high, that didn't include the Medicaid application when it is needed or even a durable PoA.

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Igloo, good advice, especially the third paragraph.
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Daughter - I'd suggest you do a 5 mo plan for 2017 to get moms health & finances set up for her to apply for NH Medicaid, unless she lives in a state that has in place easily accessible Medicaid waiver program for AL. I'm totally in agreement with Garden to be proactive n this and not go the sleeping dogs route.

Here's my suggestions - $ wise find moms 2017 awards letters from SSA and any retirements. These got mailed out this mo. or Nov that state to the penny what moms income will be each mo. If mom were to go onto Medicaid, all this $ would be required to get paid to the facility as her co-pay or SOC (share of cost). Mom would only be allowed a smallish personal needs allowance. PNA varies by state from $ 105 - 35. Knowing the PNA to me matters IF mom still has debt that needs to paid for the debt to remain in play. So like say mom has a funeral policy of $ 25 a mo, the PNA could be used to pay the $ 25. Realistically PNA is just enough to pay for toiletries & some clothing replacement. So family end up paying the funeral policy payment.
Also the AL & NH will ask what her SOC will be. My moms mo income was $1,900 a mo and the NH were positively giddy with excitement as that's a pretty high income SOC for a medicaid resident as many just have SS at $600 - $800 a mo only. In theory if a facility takes Medicaid they should not base bed availability on SOC..... But they do.

If mom doesn't have assets, she is flat going to default on her debts once on medicaid in a facility. She could continue to minimally pay on CCs till required to do her SOC as she has entered a AL or NH. But you may want to think about having her stop those payments now and instead spend that $ on things now that she will need for the future like pairs of eyeglasses, extra clothing & shoes, update her legal, dental work. Pay for things that isn't covered by Medicaid. And set aside the max allowed by medicaid for assets - usually its 2k. That 2k will come in handy to deal with paying for tax help if mom gets 1099-c on the debt she walks on for 2017 or maybe 2018 taxes.

Also mom does whatever to medically show to be "at need" for skilled nursing for a Nh or not if her state has medicaid waivers for AL. You kinda need to find this out as it will make a difference as what medical things need to be done in the upcoming 5 mos to get her eligible. Its a lot to be organized about but imo manageable on your own if you've been involved in their life and they have their finances easily findable and you have solid done by an atty DPOA MPOA & a will or a codicil done. It's a butt rash but you can DIY it for an individual with minimal assets Medicaid NH application.
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During the real estate crisis, there were a lot of counselors available to assist mortgagors (borrowers) whose mortgages were in jeopardy by providing credit counseling. I don't recall any of the names, but you could search for "debt counselors" or "credit counselors", contact them and see if you could get either free or low cost assistance in negotiating the credit card bills down. This is critical; some so called counselors want chunks of money for their services.

Your profile doesn't provide any location, so you'll have to do this research yourself to find local counselors.

The CC lender does have a choice - if your mother doesn't have the funds, the cards won't be paid off, but if it negotiates an arrangement, it might be possible to get a percentage on the dollar.

You don't need an attorney for this; a credit counselor would be better.

Also, read and study the Fair Debt Collection Practices Act. Just google "FDCPA"; the first hits will be for the Federal Trade Commission. Then you'll see a hit for the Cornell University legal site which provides the statutory language. If you have questions, post back. But focus on the rights that your mother does have under this statute.

If lenders haven't started threatening, you could initiate contact, using a PO box so they don't know your address, although they could probably get your phone number. In that case, invoke your rights under the FDCPA b/c you're NOT the debtor and they can't harass YOU.

Some posters may suggest "letting sleeping dogs lie." I don't believe in not addressing potential legal issues; I'd rather initiate contact and try to negotiate something than hope (and perhaps worry) whether someone will try to get the funds owed. The banks will, and some are especially aggressive. You don't need to deal with those kinds of predators.

Also, do some calculations first to figure out what your might be able to afford so you're in a negotiating position.
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