I asked a question a couple of weeks ago on how to handle my mother's creditors now that she is in a nursing home and starting next month, will no longer be able to pay her credit card bills. Someone (off site) suggested getting a lawyer to do the leg work, write the letters, and deal with them. I have enough to deal with, with my mother's illness and care and I don't want to be all, even though I'm POA. I'm at the point of exhaustion and it's affected my health. I was wondering if anyone had done this and what the outcome was. I have heard about how creditors track down and harass family members, and even the sick person in the nursing home, to hound them for money. What I hope to accomplish is for the creditors to not even know that I exist because, frankly, I can't handle one more thing. Anything you can tell me from experience (even second hand experience) will be appreciated.

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Vegas - "cabin of a prospector" lmao, priceless. Pretty impressive for LegalAid to do this. Perchance are they getting funding from the gaming industries?

N1 - I think for the OP the issue is that they are overwhelmed & their eider has gotten themselves in layers of debt EVEN before needing a NH. Often in this situation there just is no $. There is no spend - down; no IRA; no dividends, just convoluted layers of debt with no income or assets to ever pay off. The atop this, they now need a NH. Their saving grace is they qualify for Medicaid to pay for NH. Elder is impoverished and ALL their income, less a small personal needs allowance of $35-90 a month, must be paid to the NH. There flat is no $$. But collection agents are going to continue to press for payments; they paid pennies for the debt so whatever they can hound family to pay is a win. So how best to deal with this very real scenario for many is the conversation.

NH doesn't want their front desk or nursing staff having to field multiple calls a day from debt collectors.....the OP, well it's not her debt, but is facing the probability of the debt collection hounding for years & years - its a very different situation than the lady who adds POA daughter as a signature to deal with her portfolio.
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I do not understand the question. No one needs an attorney to pay one's bills, (creditors). The Nursing Home patient is still alive and requires only intelligent representation.
Here's where the POA or the DPOA comes in and should take over the paying of bills from......checking accounts, savings accounts, IRA's and Tax Returns. Present the POA papers to the bank officer who oversees her accounts. Checks should be signed by the POA, as "Christine Smith, attorney-in-fact for "Mary Smith"... (sample)..
Direct deposits, such as Pension Plan payouts, Social Security payouts, Dividends, etc. should continue as before her stay in the Nursing Home.
Now if you are talking about reducing the debt, you should introduce yourself to each creditor and write a letter explaining your mother's situation. Ask for a reduction of the debt. At the least, ask for a lower monthly payment.. This is a no-brainer. It is done all the time by POA's. When your mother passes, the Executor takes over. ( a different situation entirely).
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Wish I could take credit for "Super Creditors" but that is the wording used in the 69 page handout I got at the Legal Aid Center. Let me clarify educational loans... That should be Dept of Education. Ordinary creditors are credit cards, car loans, medical bills, foreclosure debt, debts to landlords, paydays and title lenders, and any other consumer debt. You can also be collection proof if you earn less than $362.50 per week (gross). If you have a payday loan and have GIVEN your bank account number to a creditor (like a payday lender, and you know you won't be able to make the payment from your exempt income, close that account ASAP and open another at a DIFFERENT bank
These are some of the sources of exempt income....federal benefits like VA benefits, Social Security, SS Disability, SSI, welfare benefits, workers comp, unemployment benefits, voc rehab benefits, child or spousal support, and retirement pensions(this one is tricky, check the law). Certain assets are also protected like a refund derived from the earned income tax credit. These exemptions do NOT protect you from the Super Creditors. Also, these exemptions do not stop creditors from recovering the collateral on a loan, such as a car or mortgage. The Nevada statutes also list a bunch of other items that are exempt, mentioned here just for fun: fire engines, money accruing in a life insurance,jails, cemeteries,the cabin of a prospector, homesteaded property,prosthesis, and even a $1000 that can be used as a "wildcard" exemption. There are federal and state laws that govern this. Get some free help from your local Legal Aid. I have a question now. If a car loan has been transferred to a debt collector, and they repo the car, I know they cannot collect the balance on a judgment if you are collection proof. Question....can they issue a 1099C for that? Thanks.
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You don't really need an attorney to do this, but if you just can't handle one more thing, it would probably be wise.

Before your mom went into the nursing home, there should have been some sort of financial schedule made out so the nursing home was aware of what outstanding bills there were. You don't say if your mother had any assets or any money when she went into a nursing home. Her debts were supposed to have been paid with any assets she had when she went into a nursing home before the nursing home took the assets.

If she doesn't have any assets, I wouldn't really worry about it. You are not responsible for her debts, and if the credit cards/banks or collection agencies tell you differently, they're lying only to get you to commit to paying them. DO NOT EVER TELL THEM THAT YOU WILL BE RESPONSIBLE FOR HER DEBTS. In fact, make it a fact to let them know that you won't be responsible for her debts. Also, don't tell the creditors what nursing home she is in either. They won't be able to find her for quite some time, if ever.

I doubt the banks/collection agencies will care that she went into a nursing home & that the nursing home gets most of her SS money & all of her assets. They will send letters, call you, then the collection agencies will call & send letters, and they'll probably end up suing her to get a judgment. It doesn't matter----she has no money to pay the judgment & she has nothing for them to put a lien on, so she is judgment proof. They cannot garnish her SS. However, if they are calling you numerous times a day & harassing you, a simple "cease and desist" letter solves the problem. They cannot call you if you write them a letter instructing them to cease calling you. Send the letter certified mail, return receipt.

You have time to breathe. Since your mother is now in a nursing home, you don't have to deal with her illness or care, so that will be a huge weight off your shoulders. You will feel that relief in a little bit of time. Since there is no way your mother can pay the credit card bills, there is really nothing you can do unless there were assets when she went into the nursing home & those debts weren't paid when she went on Medicaid & the nursing home took all of the money/assets. One of the posters her made a very good point, though----if the creditors/collection agencies decide to write-off the debt, she will get a 1099-C for the amount of the debt which will be considered income & it could jeopardize her eligibility for Medicaid. The good thing is that this takes a heck of a long time to happen. The creditors/collection agencies will pursue the debt for a few years----look into your states statutes of limitations for the amount of time creditors are able to attempt to collect on contracts---and unless they win a default judgment in court, they will write the debt off because they get tax credit for it & they don't totally lose the entire amount.

I am actually not aware about how a court would deal with a lawsuit filed by the creditors/collection agencies if your mother is in a nursing home & has no way to pay the debts. Even if a default judgment is filed against her, there is a certain amount of time that you can challenge the default judgment & have it dismissed. I don't know if the circumstances surrounding your mother's situation would support a dismissal of the judgment or not.

Take a breath-----you've got a lot of time. It takes years for this stuff to get to that stage. Don't respond to threats from the creditors or let them try to tell you that you are responsible for paying your mother's debts, because you're not. Collection agencies will say anything to get you to commit to paying the debts. If they press you for her address or current telephone number, tell them that you don't know where she is & to stop calling you.
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Vegas - love, love, love your term "Super Creditors", that is a keeper!.

I do think a lot of creditors don't care about one's being judgement proof as there is $ to be made from the selling, and reselling again & again of the debt. Discover seems to go to judgment route for any amount, so I'd bet they have a network of debtor attorneys who routinely & cheaply do this. All they need is a couple who settle to make a profit. As an aside, after Hurricane Katrina I did some outreach for helping folks try to get rebuilding funds. Over & over the same issues: family property done via a QCD with 1 worthless heir so no clear title available; or tax issues from 1099-C, so IRS owed, so no funding; but there were a lot of Discover card judgements, which had to be negotiated to be paid off to get a release so the family could get funds. Discover also gives cards to lower income folks more than VISA, so you had folks who often didn't understand the collection / judgement process and how it domino's ownership issues. You know AMEX, Diners Club can't do 1099-C's as they are not "banking", and that benefits totally a more affluent cardholder in defaults. Another thing that was folks who were getting FEMA $, were now getting hounded by debt collectors and often they & their banks didn't realize that disaster $ was protected income like SS is. It was awful - luckily a couple of the smaller regional banks were really consumer proactive and would not freeze accounts for any collections. Hopefully lessons learned.

There is one banking group (whatever the old GM bank is now called I think is the one) that specializes in "collection proof" SS income checking accounts and they do no fees at all on the pure protected income direct deposit accounts. Sure beats paying other banks monthly fees of $ 15 / 20 a month.
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I recently attended a free class on being "collection proof" from creditors given by the local Legal Aid Center. If your only income is Social Security/a Federal pension or other specified income, you can send the regular type creditors a certified, return receipt letter that explains you are collection proof. Being collection proof means that these creditors (payday lenders, credit cards, car repos etc) even with a judgment (if they should bother) cannot be collected from you. There are other factors that are can only have one bank account, direct deposit (or the payment card from SS for those without bank accounts). I urge everyone to look to their local legal aid agency for help. The protection of this income does not apply to Super Creditors: IRS, child support, Social Security, educational loans.
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I'd also like to suggest that if your elder has financial issues which you are going to try to manage, that you go and rent a mail box for them. You will need to rent it as they want an ID to do so, but it's for you & your parent. Some UPS stores have these but what could be better is a shipping service that has box rentals - these are always around colleges & university areas. Then when you do the certified letters to the creditors, that new address is the one that you indicate is where any & all future contact is to be sent to. It will keep you less mad and also this way you go there a couple of times a month to get & deal with all things "parent".

Often the smaller shipping places are family owned, so they can call you if the box is full or something 'important" comes in.

Good luck and stay organized.
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Cheribob & Isn'tE - First of all wonderfully helpful answers.

ANother item to keep in mind is the creditors doing a 1099-C for the amount of the debt written off along with it's fees & interest. the amount on the 1099-C is considered INCOME, albeit phantom income. If your parents gets one of these they kinda have to be dealt with as is "income" for IRS & Medicaid. Which in turn can affect Medicaid eligibility and SS income.

If they get a 1099-C, they need to file taxes to show impoverishment. If you do nothing, then you will own taxes on the "phantom" income. If she doesn't pay the taxes, the IRS can go after a portion of her SS income - this will snowball as a problem as mom will not have the monthly income from SS to do her required co-pay to the facility. SS is protected income from most creditors with the exception of the IRS.

1099-C are a real issue for Medicaid as well. If your state does an income match-up, the "income" reported on the 1099-C will take them over the income/asset maximums for Medicaid. Could be ineligible for Medicaid due to this.

What to do? - they will need to file IRS form 982 to show impoverishment to get a discharge of indebtedness. Form 982 - imho - is not a DIY filing. You need a tax pro. For a foreclosure 1099-C income, house expenses can offset some of this.
Any debt written off that is more than $ 600 can issue a 1099 C. Like credit cards, service provider, doctors who didn't get paid the full amount, etc. Each of those can issue their own 1099's.

For even more fun in all this, 1099 C could be an issue for more than 1 year… CC #1 carries over the debt into 2015 before it is written off, so they dont issue theirs 1099-C till tax year 2015; but CC #2 issues a 1099-C for 2014 tax year so you get it within the next few weeks.

There are free tax services done by AARP and then by retired enrolled agents that get coordinated by your local Area of Aging, I'd google to see what is available in your community. You want to get on this asap, as these services have a limited # of slots, Not all will deal with 1099/982 as that is pretty specialized. A good CPA can do these. The H & R BLock pro tax offices (ones that are open all year round; these tend to do work for business, LLC's, so have a more specialized tax person working there) can likely do them too.

If they get a 1099-C, you have to deal with it one way or another as they can't afford for them to have SS reduced or be removed from Medicaid.
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'cheribob' gives great advice. She handled it a more formally than I did, but we both found ourselves in essentially the same boat.

The 'deregulation era' of offering credit unfortunately dovetailed with my father's onset of dementia. By the time things got desperate and he allowed me to take over, he had run up nearly $100,000 in credit card debt on more than 20 cards. I researched each of them and found that most were super-high interest cards with very low limits that, at that time, were being pushed to people who already had lots of debt. The interest was so high and the limit so low that, within a short time, you would find you had paid at least as much in interest as you had charged to begin with.

I had consulted with an attorney who recommended negotiating the debt down, but given that dad had only a little social security income and very few assets, he couldn't have paid it, even if it was negotiated down to pennies on the dollar (which is VERY easy to do). So, I simply stopped making payments. Without him continuing to charge, there was no money to make payments anyway.

Some of them hounded him on his cell phone for a long time (years) which could have been avoided had he allowed me to change his number. One of them sued him, but I did a little internet research and found that once the debt goes 'bad', these companies make even more money by selling it off. They sell it in large packets of hundreds of debtors with very little paper trail and, if it ever makes it to court when they sue, judges throw them out of court.

After receiving and rejecting dozens of the debt collecting company's letters of offers to settle, I went to court with my dad (without a lawyer). The lawyer for the debt collector asked to meet with us minutes before we went into the courtroom. He made a last ditch effort to get dad to settle. I'd prepared a statement of my dad's income and expenses and an accounting of his assets and explained to the lawyer that you "can't get blood from a stone." So, we went before the judge where, as predicted by my internet research, he asked the lawyer to show proof that his client was legally entitled to collect on the debt. The lawyer handed over a Xerox copy of a spread sheet listing only debtors' names and the amount they owed – no paper trail on the debt. The judge decided in favor of dad and reprimanded the lawyer for entering his courtroom without any proof that he could legitimately collect on the debt.

So, be not afraid! These predatory lenders rode rough shod over vulnerable people (and still do), destroying them financially when they were most in need of the protections of regulation. Had the old standards of qualifying for credit still been in effect, my dad would NEVER have qualified for all of those cards and he wouldn't be a pauper now. I have no guilt over the money he didn't pay them. On the contrary, I still have plenty of anger over how he emptied his savings trying to keep with them; paying out many times over the amounts of the original debts.

ps - in our case, the judge and the attorney allowed me to speak for my dad in court (he was there). I wasn't entitled to by law. You can represent yourself, but if you're asking someone else to represent you, they have to be someone who's been admitted to the bar. It would have been nerve-wracking if I was sitting a row back and couldn't answer any questions, but I'm certain the result would have been the same. That said, cheribob's recommendation of calling legal aid is a great one.
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Contact the local Area Agency on Aging or Bureau of Senior Services, they may have someone there that could help you with the creditors, or at least give you information that would point you in the right direction. Creditors can be so demanding. You must first take care of yourself or you won't be able to care for your mom. I hope this helps.
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I recently took over my father's finances (12-13). I can tell you a little about what I went through & how I handled it. My dad has no assets so handling his finances is pretty straight forward.

In the fall of 2013 my father started calling & asking for money. After the second call I asked him if he would like me to take over his finances for him. He said he would like that. I traveled from Chicago to Tennessee in the middle of a blizzard!

The first thing I did was take Dad to legal aid (I made an appointment before I left Chicago) & get a Durable Power of Attorney. I got Health Care POA at the same time. The second thing I did was to take dad to the bank, close the old checking account & open a new one. Although dad's name is on the account he has no access to it. Bank officer called SS Admin to have his SS check sent to new account. I had to pay off the overdraft loan. Then I had to go to the payday loan store that was auto debiting his account & pay that loan off (491% interest!)

I told dad to put all his bills in a shopping bag & took it home with me. I had no idea what a mess he had made of his finances. $21,000+ in credit cad debit, overdue medical bills, 7 payday loans, pawn tickets, months behind on utilities & insurance premiums, and his house was in foreclosure!

I pulled his credit report. Then I wrote a letter stating that

"My father, (his name), no longer makes his own decisions. I am requesting that his account be closed. He does not have the financial means to pay this debt as his only source of income is social security. He has no property, is seriously ill and has no intention of paying the debt. Pursuant to his rights under The Fair Debt Collection Practices Act, he is requesting that you cease and desist communication with him, as well as his family and friends, in relation to this and all other alleged debts you claim he owes.
You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the Tennessee Attorney General’s office. Civil and criminal claims will be pursued."

Then I sent the letters registered, return receipt to each creditor. There were only a couple of places that continued to harass him. I never received any calls. In November of 2014 he received a Summons from Discover. Discover was taking him to small claims court for what dad owed them. I called Legal Aid & told them what was happening. They laughed & said they would take care of it. Right now the case has been postponed until March 2015. Legal Aid is working to get Discover to drop the case.

Believe me, if my dad would have had the resources I would have paid his creditors. But where would I have even started? I DID manage to pay all the overdue medical bills. But the credit card companies can go jump in the lake as far as I am concerned. My father had NO employment income & and had filed bankruptcy in 2006. So do I feel sorry for those financial predators? NO WAY. They had no business giving my father credit. That poor old man was so worried he couldn't sleep at night.

Now all his bills & premiums are current. He was able to get a loan modification for his mortgage (Thank you, Wells Fargo!). My goal is to never have more than $2,000 in his checking account. I don't think that will EVER be a problem! LOL!
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A Daily Money Manager is someone who can handle this for you for much less than Attorney. If you have an IKOR office in your area they do Day Money a Management as well.
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Difficult to comment on because of lack of information. Were you caring for your mother in your house or in her house. Before you did anything did you and mother set up a full set of estate documents for you and mother?
In what way would you be responsible for any of her finances?
Did you sign and agree to take responsibility for nursing home costs or extra bills?
In what way are you connected with her credit cards?
Being next of kin means nothing. Holding a POA does not oblige you to pay her bills.
I suppose if she own assets or a house the creditors place liens on them.

I guess you can say to the creditors; not my responsibility can't help you.

My suggestion is to always demand the full name of a person calling you, the company name and location and why they are calling.
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My brother is executor and handles everything. I help him, but it is his responsibility. No one has harassed either one of us.But, my father didn't owe anything when he died.Is there any money to pay her debts? Can you file for bankruptcy if there isn't?
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