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I should add that my MIL has NEVER been good with money-she's gone through at lease one foreclosure and bankruptcy. She is now 71 and was recently diagnosed with Alzheimer's. My husband and I have POA, but we shouldn't be tied as guarantors, should we? No one is disputing she owes the money... She had borrowed about $60K at first in 2000, then borrowed another $6K in 2006...and she stopped paying her friend altogether in 2009. We just sold her mobile home and was able to turn over all $15K to her friend, so that knocked it down a little. My MIL gets about $14,500 a year in SS and that's it. She has no other assets now that the MH was sold. She is living on another friend's property while my husband and I search for a suitable facility as she is declining in her memory pretty quickly. Any advice? We live in CA if that helps. Thank you for your time all, I've been visiting the site for about four months now and it has provided me and my husband (her only child) some comfort in that we are not alone in dealing with an aging parent that not only was never fiscally responsible, but now has this disease.

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Thanks for the update. I've just read all of the posts and agree that the advice was good. Unless you guaranteed your MIL's obligations, you're not obligated for payment. I think this woman is just trying to intimidate you.

Even if you are proxies under a DPOA, and if the money isn't there, those debts aren't your obligation. From what I've read, it sounds as if MIL is judgment proof, so any suit would yield nothing collectible, and might even be in violation of any "protected individuals" legal protection under CA law.

However, it sounds as though she's intimating a threat when she tells you that you "need to think about it." Do you think she's violent or would harass you? What about her son?

If so, you might want to consider getting a PPO against her, and her son. If you do, be sure to include information on the business losses and failure to pay state taxes.
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So here is an update. MIL is still on her friend's property. We had a facility lined up for her last month, and during the intial visits, she was excited. A few days later, she did a 180, and said she would rather die than go. In the meantime, the 'best friend' met with us. We told her that MIL did not have the resources to pay the debt (this was done under legal advice we received). She proceeded to lay a guilt trip on my husband, saying we were obligated to pay his mother's debt. We did not know the payments were not being made, and we did not know about the additional loan until this year. We said that her debt was not our debt. She insisted that as POA, we were responsible. We repeated what we said, and she left, saying that we really needed to think about it. I should also add that it is on public record the best friend has lost her businesses, and her legal entities were suspended by the CA Franchise Tax Board for failure to pay taxes. So with that said, I didn't think it was fair of her to say we needed to pay my mother in law's bills, and to lay the guilt on my husband. I also failed to mention that over the past 13 years, until we moved my MIL out of her mobile home in May, this friend spent every weekend at the mobile, set up one of the bedrooms as her own, and has been very dependent and needy on my MIL until the past few years when MIL started to decline in he memory. Sorry for the venting, I got tired of hearing of how this 'friend' has always been there for my MIL, but my MIL was also there for her all these years, basically giving up weekends because this 'friend' refused to be alone from Friday to Sunday-this was while my MIL worked on Saturdays. Okay, rant over, thank you!
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I agree, do not agree verbally. However, I find the notion of the lender 'suffering the consequences' to be troubling. At the time the money was loaned the situation may have been different. IMHO it is harsh to judge someone like that without knowing more about the original circumstances.
From what I know of general principles of debt law, you and your husband are not personally responsible for your MIL's debts. From what I gather she doesn't have enough to pay a memory care facility so you may have to find one that accepts some form of assistance. They will also more than likely take all her SS income. So she will not have any money to pay off the debt if that occurs. I do know that some things differ state by state so you would need to consult an expert in California law and their policies may be more liberal than other states. I know people who moved there so their child could get care for her entire life.. Do not rely solely on answers here. Good luck.
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If you are looking for a facility for her, and her income is only SS, then it looks like she will be applying for Medicaid. So, the govt will be taking her monthly check. Maybe the lenders anticipate this and that's why they're trying to make a new deal right now. I wouldn't even agree to a payment plan. Even outside a facility, the amount she receives if very tight for anyone to live on. That's probably why she borrowed so much and had foreclosure in the past. She really can't afford to pay this friend back. It can't be helped now.
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Don't verbally agree to it, nor sign for it. They Knew how much MIL borrowed and how long it took her to pay partial. They Knew this, and yet were willing to lend her money. Let them suffer the consequences as you slowly pay off her debts.
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I might consider consulting a bankruptcy attorney. You can usually do that for free. Is there anything in writing that outlines the agreement?
I would not sign anything.
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Don't sign ANYTHING! Work out a payment plan but don't cosign anything nor do you have to.
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You don't need to guarantee anything, and it would not be in your best interests to do so, obviously. Is your friend's son saying that the debt will be knocked down to $10,000 if your husband guarantees it? Is that their way of trying to make sure at least part of it gets paid? I would not do it in any event. Your MIL's friend was extremely ill-advised to lend so much money to someone with so few assets and so little means to pay it back. I'm sorry to say it's her problem now.
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