My mother has been in a nursing home for the last 9 months. They take her Social Security and she is on Medicaid. She has credit card debt, but due to the stimulus checks, there was enough money in her bank account to continue making payments. She'll finally default in November.
I'm her POA. She and I have the same last name and we lived at the same address until she entered the nursing home. I'm worried that those factors will somehow cause my credit to be affected and/or I will be held responsible for her debt.
I consulted legal aid on behalf of my mother, and they told me not to contact the credit card companies until they contacted Mom. Then I should inform them, in writing, that she's in a nursing home and has no assets. I asked what I should do if they came after me as the daughter/POA and I was told that "they can't". We all know it's never that simple with debt collectors. I asked what I should do if the creditors DID come after me. They said it would then become MY legal problem, not my mother's, so they couldn't give me any advice. Since I'm on SSI, I also qualify for Legal Aid. I called on my own behalf, but was told that it's my mother's legal problem, not mine and debt collectors can't come after me. If they did, I could call Legal Aid again.
I would prefer to stop them from coming after me BEFORE it happens. How do I protect myself from harassment or from having my own credit affected?
This addresses primarily the creditor's side. I had completely forgotten about the option of your mother filing for bankruptcy, which to me is kind of drastic, especially for an elderly person.
https://www.findlaw.com/smallbusiness/business-finances/debt-collection.html
And this one addresses the debtor's positions:
https://www.findlaw.com/bankruptcy/debt-relief/debt-collection-laws.html
Of interest, in what a creditor cannot do:
"Contact other people about your debt or bother your family"
And, another caution: these people can be very intimidating and aggressive. Be aware of that and don't let them upset you.
Good luck!
"No, they cannot put a lien on your real estate. Interest rates on credit cards are high because the card issuers have no collateral when they lend you money; they can't seize your real estate or any other assets."
Some background information on the FDCPA:
https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text
This is probably the easiest to read and understand what your rights are. If you're looking for different approaches, there are several other sources if you want different perspectives, as federal law isn't always crystal clear.
https://www.fdic.gov/regulations/laws/rules/6500-3240.html
https://www.govinfo.gov/content/pkg/PLAW-111publ24/html/PLAW-111publ24.htm
https://www.law.cornell.edu/uscode/text/15/1692f
and
https://www.consumerfinance.gov/rules-policy/final-rules/debt-collection-practices-regulation-f/
Second, I would just read the first citation and see if it helps you. The FDCPA defines debtor rights, as well as what creditors can't do. The latter affects you, since you're not a creditor. The law also provides for remedies, although they're not particularly strong.
But it's helpful to know how the law defines creditor action and what it can't do, which is harass you, although that doesn't mean creditors won't do so anyway. Follow the advice given by others, but communicate only once by letter advising them you have no responsibility for the debt. They'll continue to hassle you, but don't respond. And don't answer the phone if you don't recognize the number.
Third, There used to be a standard disclaimer that people could have posted in a local legal newspaper stating that the individual is not responsible for any debts incurred by others. It used to be run for some weeks, as published notice to debt collectors. I don't know if this still is an option, but you could ask the Legal Aid folks. They should know.
Something you should never, never do is speak with them by phone. Creditors have been known to tape phone conversations, edit them, and use the edited parts to intimidate, harass, or claim that nondebtors/relatives are still obligated.
Fourth, do nothing if/when they contact you except respond in writing, by certified or registered mail, invoking the FDCPA and advising that you are NOT a debtor to them and therefore they cannot contact you. Don't respond to further contact, verbal or written. Don't be surprised though if they ignore it. These people are like vultures fighting over a dead animal.
I would do as suggested to start. Put on the envelope that this person no longer resides at this address. The credit card company may then try to contact Mom by phone. If so, this is when I would say that Mrs S is now in a NH on Medicaid. Her SS cannot be garnished. Do not give them any further info. Not even how you are related.
Now collection companies. The people calling you work on commission. They get paid by how much money they recoup. So they can be very tenacious. Me, I pick up no phone calls I don't know the number on my caller ID. They can always leave a message. Don't return them. Eventually they will send a letter, return with "person no longer lives at this address".
You will not need a lawyer because you are not responsible for Moms debts. Once you tell a Collection Agency not to call you again (I just read an actual letter is better) they are not to call you. Again you just say that Mrs S is in a NH on Medicaid. They would be wasting money to even sue because again Moms SS cannot be garnished.
The FTC has guidelines that Collection agencies need to follow. When they go out of those guidelines, you can file a complaint.
Do what LA advised, it's correct.
Sign any communication with the debt collector with [your name] + Power of Attorney
Don't respond to any further contact from them for any reason.
Creditors will often sell their debt to debt collectors who are highly motivated to collect on it, but that's their problem, not your mother or yours.
My step FIL had tens of thousands in old cc debt and he had Parkinsons and was in a nursing home. I'd write on the mail "No longer at this address, return to sender" and put it back in the mail. Didn't answer their calls. It ended eventually.
If debt collectors tell you that you do, they are lying.
Look at it this way. Is anyone asking you to pay for your mother's NH expenses? No. That's because your mother is an adult and she alone is responsible for her expenses and debts.
Run your credit reports and make sure that there is no confusion between your mother's accounts and yours. Freeze your credit.
Do not give YOUR information to any debt collectors who call or contact you. As LA advised, make up a form letter stating that mom is in a NH on Medicaid and has no assets. Period. Send the form letter when your mother receives any notices from the CC companies or debt collection agencies.
Most CC companies simply write off unsecured debt.