Follow
Share

What do I do with my elder parents credit card debts?  Do you pay their credit card bills? My father just passed away and my mother has been in the hospital for 4 months. I am not yet her guardian and am waiting on that as I am very timid of the whole process and my lawyer advised me to wait till I was ready. Since I normally paid my mothers bills online with her money I have just kept up that process so everything is being paid. She will need nursing home care and won't have the money for that and probably won't qualify for medicaid for awhile either. Her income is slightly higher than the medicaid threshold so I have zero clue how that will all work as I sure as heck am not paying for it. So I guess my question is, when your elder parent was needing extensive medical care were you keeping up with their CC bills too? I feel like just paying the essentials like house, utilities, insurance are important but no where have a I read what you all did with their debts? When you become a guardian do you have to keep up payments on the CC debts too?

This question has been closed for answers. Ask a New Question.
Eldercare lawyer needs to create a Miller Trust to get her qualified for Medicaid.

Hopefully others will have answers to your main question.
Helpful Answer (2)
Report

Oh OK Thank you Barb for the Miller Trust info. My husband said something about that, but I wasn't sure what that was. Just did a quick search. Just was able to exhale for a minute. This whole thing has been overwhelming and a nightmare.
Helpful Answer (4)
Report

My dad lived with me until he went into a nursing home. He was on Medicaid. I called his creditors to let them know that he was very, very ill and in a nursing home and that he had no more money. I told them my dad was on hospice. They thanked me for the information and I thought that would be that.

Once those cards went delinquent my phone blew up. l had called his creditors from my cell phone so that's the number they had as a contact number. I was patient and told each of them again the situation but the calls became incessant. I finally told each and every one of them not to call me ever again. The calls slowed down but didn't stop. Once my dad died I called them all again to tell them he was dead and they all asked about my dad's "estate". I had to laugh at that. A couple of the creditors asked for a copy of the death certificate which I never sent and that was the end of it.

Don't take on your parents debts. Their creditors will try to get you to but don't ever do it. You're not legally obligated to and if you have to have any interaction with their creditors make sure you tell them to never call you because once they have your phone number that's a new contact number for them. Your dad has died and they can't get to your mom so they'll try to contact you repeatedly. Block their numbers from your phone.
Helpful Answer (9)
Report

Oh my Eyerishlass, how crazy they started calling you. Good advice to block my number. Had you given them the number or did they keep it from the call you did that first time (did the computer just record the number some how)? I do know I have no legal obligation to pay from my own money that is for sure. I am wondering if anyone kept up the payments for the parents with the parents money.
Helpful Answer (1)
Report

I am so sorry for your loss. It is overwhelming, but you need to Talk with the lawyer NOW. You need to come up with a plan that takes into account current bills, whether your father's estate has gone through probate, whether Medical and Durable Power of Attorneys exist for your mother, and what bills are due/what for/which credit cards may be needed to keep paying for stuff like prescriptions and co-pays. If you simply quit paying the credit cards and your mother has bills that are automatically paid on them, you run the risk of an insurance bill not being paid - maybe she has long-term care insurance, or prescription plan default, or...yikes.
If mother simply defaults on credit card debt, the companies may issue her a 1099-C, cancellation of debt. That is viewed as income by the IRS, has to be reported and may have taxes due on it, which makes this not a Do-It-Yourself project. It can affect Medicaid application, participation in income-based programs like meals on wheels, etc. Your lawyer should be one that is well-versed in elder law and MEDICAID. Don't just assume that they are - ask. If your father was a veteran, your mother may qualify for programs through the VA, again you won't know unless you ask. There are hospital social workers that can help you begin the process of deciding what the appropriate placement will be (not coming home to live with YOU), and how to access programs to help you make it happen. Take care of your own oxygen first in the process - otherwise you will never be able to help anyone else. Breathe.
Helpful Answer (9)
Report

Assuming you're handling her financial affairs, I would definitely have to say no on that one. She's going to need that money to help pay for her care in the facility. The nursing home will most likely get her check anyway, so paying the facility will probably be the only priority and everyone else is screwed. 

Someone on here mentioned something about a Miller trust. I don't trust trusts for the simple reason there's no guarantee the person will use the money on you. I trust means you're gifting your money and assets to someone you a point as a trustee. Therefore, they can do what they want with what's now their money and assets since it now belongs to them. No thanks! Another downfall of a trust is that you have to keep paying to keep the trust open from what I was told. Nope, not for me. My goal is to never run out of money, not drain myself dry and land back in poverty. 

The alternative

Anyone on federal benefits can start their own able account in any state in the US. It was once restricted to just the state you live in, but now it's open to any state you choose to start one in. However, you can only have one able account. You can have a very high savings amount but there's only one problem. Medicaid can go after that when you die as a compensation. What you may want to do to make sure your last wishes are honored is set up a preneed with the funeral home and maybe even start a POD account or pay on a funeral preneed policy monthly. Make sure you keep copies of your preneed papers in a safe place or best yet, multiple safe places. Don't ever lapse on your payments. 

If your state has a TOD for your home or business or anything that a TOD would cover, definitely open such an account now while you can and the nursing home won't be able to grab it. When my bio dad was in a nursing home, they weren't able to touch his home because it was in a TOD account. 
Helpful Answer (0)
Report

I realize that you may not be comfortable, but you need to act now as you will eventually need to take care of this. I stopped paying my aunts credit card bills as I just could not pay her assisted living costs as well as her credit cards. I would stop paying everything that you do not have to pay.....you may need to sell her house to keep up with the bills. It is not good to wait as you may have a lot of trouble if you wait longer.
Helpful Answer (5)
Report

It seems to me these are issues your lawyer should be advising you about. You said you have a lawyer, but if he isn't an elder care attorney, thats what you need to get asap. And yes, there's a big difference between general practice and elder care attorney.
Helpful Answer (3)
Report

I would RUN to an attorney who specializes in elder care & Medicaid if that is inevitable. Not sure what sort of attorney encourages to wait until you're comfortable, but this is a matter you need to get in front of with some solid guidance and education.
Helpful Answer (6)
Report

You're not legally obligated to pay a parent's bills from your own income. However if you are POA or a guardian, you are responsible for keeping up their payments if they have the income for that to begin with, from any income they have. Once the owner of the credit has passed, family is still not legally obligated to see that payments are made or a debt is paid off, but creditors can sue an estate (iow... family) and an estate can be anything from just a junk car that was owned, to more. Keep in mind there are so many people with credit card debt when they pass that the lawsuits would be overwhelming for a credit company to bother pursuing those payments outside of persistent hounding by debt collectors for like 200.00. If it's a large debt I'd be concerned. Keep moms card balance paid off from her own income, if she can't afford it, stop charging and use what income she has to get it paid off, figure out other avenues to get the things she needs.
Helpful Answer (1)
Report

FYI on debts - it really does not matter if YOU called these places regarding debt. Once a credit company writes off debt, it gets sold to debt collectors, sometimes multiple times it is sold off. THEY have ways to find ANYONE who was associated with the original owner of that debt (look up skip tracing - I had someone contact me about a former DIL). Look up John Oliver's youtube video on debt buyers - he is mainly a comedian, HOWEVER he covers topics like this, giving you an overview and THIS one is enlightening. Ignoring debt, even if it is not your own, can be devastating and costly! Please, if you find some of his words or "methods" offensive, overlook this and TAKE IN WHAT HE IS SAYING!
Elder Care Attorney should be able to help with this. I recommend you continue to pay, at least the minimum, to keep these vultures off your doorstep. Setting up a PROPER trust with an APPROPRIATE trustee should NOT be seen as the wrong thing to do. IF there are assets and IF mom or dad applies for Medicaid, ALL assets are considered and Medicaid can suck those dry. There should be more concern about this than appointing an untrustworthy trustee, which goes against the very name "trustee". Dontask says "trust means you're gifting your money and assets to someone you a point as a trustee" - that is NOT what a trust is/or should be. We set up a trust for our mother - it is STILL her assests and it is for HER benefit while she is living. We three children are the "trustees" and we use it to pay for HER. We would be the beneficiaries of anything left after her demise, HOWEVER if the trustee is chosen wisely, no money should be taken or spent on the trustee's behalf UNLESS that person can prove the money was originally spent on behalf of the principal.
So, beware just ignoring debt thinking it will go away... have this handled with the help of an Elder Care attorney. Certainly YOU are not obligated to pay anyone else's debt, so NO, do not use your own assets to pay off anyone's debt!
Helpful Answer (5)
Report

What is a TOD?
Helpful Answer (0)
Report

Quick lookup, from investopedia:
The transfer on death (TOD) designation lets beneficiaries receive assets at the time of the person's death without going through probate
Helpful Answer (0)
Report

Howard Clark (or Clark Howard) answered this question years ago on TV.

NO!! Not unless you're also on the cards! He even stated that the credit card companies cannot take your inheritance either! This is why you need to use an attorney. If you can't afford one, at least contact Legal Aid to ask questions.

Mind you, I had 2 lawyers tell me I had to keep paying my dad's mortgage even though not allowed to do anything with his mobile home until after probate.

At Probate, the judge asked me why I kept paying the mortgage. I said I was told I had to. She said there was no money (funds) in dad's estate - and I didn't have to keep paying the mortgage. She also said "I gifted the money to pay the mortgage."

8 years earlier, the bank had put me on all dad's accounts so I would be able to access funds for his care. The judge said the money was legally all mine - and I owed nothing to his creditors. (the only creditor was for the mortgage - I had been advised to do a mortgage instead of outright purchase for the home.)
Helpful Answer (0)
Report

I'm very disappointed in all the "don't pay" comments. Your parent(s) 'borrowed' money with the agreement to repay the debt. They have a legal and moral obligation to hold up their end of the bargain. Yes, credit card companies are big businesses, but if you stiff them, that gets passed on to the rest of us in higher interest rates and fees. Mind boggling that people think bill collectors are the enemy, when they loaned you money with the full expectation you'd hold up your end of the bargain.
Helpful Answer (3)
Report

@grege64

the question is the legality of who owes. the child does not owe for the parents. if the parent is still alive and has the funds to repay - then yes, continue paying off the debts.

But if the companies are dunning the child of the parent because the parent cannot pay - this is not legal.

You actually admit this in your answer: "Your parent(s) 'borrowed' money with the agreement to repay the debt. They have a legal and moral obligation to hold up their end of the bargain."

THEY have a legal and moral obligation. THEY. Not YOU.

YOU have a choice.  Not an obligation.
Helpful Answer (3)
Report

I found my sister living in Oklahoma and had her flown to me (CA). Per advice of a friend (Social worker) I immediately became her POA, DPOA. She signed these papers at our mutual bank (notarized) and I had them print some checks. Living with me (mild dementia) I used her meager Social Security to pay her credit card debt, and other outstanding debts. (ER, ambulance, storage unit, vehicle towing, etc.). She was living with me free but her debts were from honest providers of important services. I received copies of each debt and they were legitimate. I am also a believer of "what goes around comes around." I also found that her "best friend" in Oklahoma was withdrawing $500. monthly from her meager bank account because "I needed it." No, I didn't press charges because I had enough on my plate with sis's medical issues, debts, and MediCal application (approved). 6 months later I found an Assisted living facility a few miles away. They don't accept MediCal but her SS income covers 90%. She has a roommate (makes it affordable), is safe. Staff changes often but they are compassionate, and she is close enough for frequent visits. My point is: IF DEBTS ARE LEGIT, pay them!
Helpful Answer (1)
Report

First, make certain you hire an elder care attorney. They're worth the money, as you will save thousands in the long run. I have now been through the Medicaid process with both parents. Their home can't be touched, nor one vehicle. My attorney guided me all the way through. I've been advised by him not to pay the credit cards, as all their income now goes to nursing facility. Well worth it. Nursing home costs vary, but in my case it would have been approximately $6500 each. Their combined income is about $3500, and that's what we pay. Sure beats $13,000. In the meantime, I'm paying insurance on their vehicle, because if I sell it, my parents don't get the money from the sale. Same goes with their home. Good news, through the Medicaid process, they are able to keep a certain portion of their savings, gifted to you, and from there you pay taxes and homeowners insurance. NOT credit cards. They are no longer liable due to all income now being gone to nursing facility.
It's a lengthy, nail biting experience, but with a GOOD elder care attorney, you're guided through every step, then you're done!
Attorney was a total of $12,000, but we saved that much in just over a months worth of nursing facility care!
Helpful Answer (1)
Report

When Mom went into a nursing home, her social security and pension went to the nursing home (she was also receiving Medicaid). She had signed a quit-claim deed years earlier, and her house was in me and my brother's name. So Mom had no money and owned nothing...... I sent a certified letter to the credit card company advising of this. Mom was the person who had the credit card and it was Mom's money that ran out. She had nothing. The well had run dry. The. End. I was on her checking account to sign her checks, which I did for years, and often paid the credit card company far more than the minimum payment. But it wasn't my money, or my obligation. .... I heard nothing more from the credit card company, but they gave the information to some bill collecting agencies. Occasionally I will get a call on my landline answering machine requesting "the person who handles Mrs._____'s estate" contact them . They probably learned of mom's death from social security...nonetheless, there is no "estate" and there is no money, therefore they will have to write off the remaining debt. *I* am certainly not involved in this, other than receiving an occasional phone call..........I do realize that senior citizens who have the audacity to go into nursing homes and die don't HAVE the money to pay off their credit cards. This raises the interest rates and is spread out to all credit card holders. Yes, that is unfair, but if there is no more money, you can't get blood from a rock. And no fair 'blaming the senior citizens' for defaulting. There are millions and millions of fine 'Muricans who max out several credit cards in their working years, trying to keep up with the Joneses, live in McMansions they can't afford, going on cruises and vacations all on credit, buying new cars every year on credit, and these people also default on their payments, go broke, file for bankruptcy. I daresay they are as responsible if not more so for the high interest on credit cards, not seniors with Alzheimers and dementia who have to go into LT care. The children of the seniors are not responsible for the debts.
Helpful Answer (5)
Report

Lassie, that's well said! Thank you. We are not responsible for their debts, any more than they are responsible for ours. If every cent of their income must go for their care, you can't get blood from a turnip.
Helpful Answer (1)
Report

Dontask4 - about the Miller Trust, to me it's kinda important for anyone anticipating NH costs with higher incomes to understand what a Miller Trust is & does. Miller is a pretty specific trust used to qualify folks for Medicaid who would otherwise be financially ineligible. It's self-limiting, pretty straightforward & used for that 1 thing only.

For Medicaid, financially you have to qualify for both income & assets. For an individuals assets, you spend down (like private aying for care) till you get to 2k in nonexempt assets. But for income, it has to be under whatever your state has set as maximum income monthly. Like when my 90+ yr old mom applied her states monthly income max was $2,064.00. Now my mom was ok as her income was $ 1,900. BUT for younger folks -like baby boomers - some get $ 3k a mo from SS alone. They are way way over the income max for Medicaid. But still don't make enough income to pay a 10 -15k a mo NH bill. If they have already spent down and private paid for care, it's a financial crisis.

For this situation Miller solves the problem.
Say $ 3,100 SS plus $ 900 annuity each mo. 4k & $ 1,936 over the limit. But if the income qualifies then the Miller becomes the payee for the 4k & Viola! your now eligible for Medicaid! NH gets all the Miller $ less a smallish personal needs allowance.

Hopefully you have a hefty 6 figure nest egg so never need Medicaid. But for those who find themselves with income to high for Medicaid but too low to private pay for care, a Miller Trust is a godsend.
Helpful Answer (3)
Report

Consult an elder lawyer. Depending on your parent's financial situation, you may have to consider filing bankruptcy for them to discharge the credit card debts. If that is not an option, call them to perhaps work out a reduction of interest and fees, and make smaller monthly payments to pay of the cc debt.
Unless you are a co-signor on the credit cards (different from an authorized user), you are not responsible for her cc debts - but her estate will be.
No 2 credit card companies treat the situation the same. 1 cc company said fine, then shut down the account and sold it to a debt collector--- you know how fun those calls are.
Another cc company was very nice, stopped all fees, and reduced the interest and let us slowly pay off the card
Also you need to look at - does Mom still need to have credit cards? Don't shut them all down, if she may need to them to pay for prescriptions, glasses, dentists or something else not covered by medicare or insurance.
If she owns any property (including a cemetery plot), Medicaid will look for those assets to help cover nursing costs.
It gets so complex it really is best to gather all of her financial information together assets and debts, and consult an elder law attorney.
Helpful Answer (2)
Report

This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter