What debts can you pay off during spend-down period?

Based on the following article: https://www.medicaidplanningassistance.org/medicaid-spend-down/

You can pay off:

Accrued Debt. One can pay off accrued debt, such as personal and vehicle loans, mortgages and credit card balances.

Medical Devices. One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids.

Home Modifications/ One can make home reparations and modifications to improve access and safety, as well as build on to their existing home, such as adding a first floor bedroom or bathroom.

Vehicle Repairs. Vehicle repairs, such as replacing the battery, getting an engine tune-up, or replacing old tires are also a way to spend down assets, as is selling an existing car at fair market value and purchasing a new one.

Life Care Agreements. One can create a formal life care agreement, often referred to as personal care agreement. This type of agreement is generally between an elderly care recipient and a relative or close family friend. It allows the care recipient to spend down their excess assets while receiving needed care. It is vital this type of contract is drafted properly and that pay is reasonable for the area in which one lives. If it isn’t, one could be in violation of Medicaid’s look-back period.

Annuities. One can purchase an annuity, which in simple terms, is a lump sum of cash converted into a monthly income stream for the Medicaid applicant or their spouse. The payments can be for a set period shorter than one’s life expectancy or equal to the beneficiary’s life expectancy.

Irrevocable Funeral Trusts. One can purchase to purchase an irrevocable funeral trust, which can only be used for the expenses of a funeral and burial. In general, up to $15,000 per spouse can be placed in a funeral trust. However, this amount varies by state.

You should check with them. But the Credit Card Debt is something your Grandmother owes and should be paid.
What you can do is call the Credit Card Co and explain things and tell them that you are paying for her care and are willing to pay half of the bill of what your Grandmother owes and they will probably accept it.
Don't mention the sell of her home to the Credit card people.

I don’t know who gave you your Medicaid advise, but some of it is clearly wrong. Legitimate debts can be paid as part of the spend down. There was no reason to sell her homestead to make her eligible for Medicaid. I agree with others that you consult an elder care attorney immediately. These costs are also qualified expenses for the spend down. The general philosophy behind the spend down policy has to do with people deliberately trying to impoverish a relative in order to qualify them for Medicaid. Legitimate expenses and debts do not fall into this category. Get the facts about you state’s Medicaid laws and policies from someone who is on your side and knows how to apply government policies in ways that benefit your grandmother. There was never any reason why the credit card company was forced to sue your grandmother. You could have paid off this debt without incurring any penalties unless the debt was incurred by you or a relative in close proximity to her Medicaid application and included expenses that were clearly not incurred for her benefit such as expensive furniture, makeup, expensive clothes that are not her size, etc.

When my LO went to a nursing home permanently, the only thing I didn't pay off was her last cable bill. She would periodically over the years call her cable and utilities trying to get discounts or some better deal. Cable company could almost always talk her into paying more and this last bill was ridiculous. So everything but the cable bill was paid with the house proceeds - including credit cards. She lived on credit cards and home equity loans and juggled those most of her life to maintain the appearance of a higher living standard. To me, paying those off was covering her expenses/care since most of what she charged was technically "living expenses" - just to a somewhat higher degree than what she could afford on her income. There were even a few nursing home and medical expenses on the credit cards. I don't know that I ever questioned it in advance, but I didn't want to deal with creditor harassment and there was no doubt the debts were hers, so I paid them and used the rest of the house proceeds to pay the nursing home until Medicaid kicked in. I also had statements to back up the fact that these were credit card charges she made for herself. Her credit cards had been zeroed out several years before by a generous person trying to help, so I had the comfort of knowing the credit cards she had at the time of her house sale were not things she bought for others or cash advance money that was then gifted to someone. I do not remember if I had to produce credit card statements with the Medicaid application, but I had them. Find out how your state views this - it's probably a question they get all the time. Either way, I'd be trying to close the loop on this lawsuit so it doesn't drag out because that will just be a burden for you and extra stress that you don't need. You may be advised to pay it since the funds are technically available.

Contact an elder law attorney in your state. I found that was the best avenue for me anyway. I went in with specific questions written down and ready, and was out before the full hour was up. It was worth the (prorated) peace of mind.

Your Mother has enough money from the sale of her house to pay private pay for over 5 years? I would talk to her prior Medicaid caseworker. She is in the spend down process. The debt is hers. If she was on Medicaid, the CCs would have to write it off. Can't garnish SS. But she now has money.

contact an Elder Care Attorney asap and have them help you get things sorted out. They are good at what they do (especially the one we have for my mother). Search in the internet and see how the reviews are for that person, thats how I found mine and he is great. Wishing you luck.

In this case, you MUST contact an eldercare attorney who specializes in Medicaid. This is far too complicated for a normal person to understand. You need professional help - don't mess with this.

When my in-laws became mentally incapacitated and were broke, I never opened up the cc mail or from creditors because at that time they were upside down on a ballooning mortgage, owed back property taxes, etc, and there was no money to pay the years-old debt. I wrote on the envelope "Not living at this address, return to sender" and put them back in the mail. If they provided a phone number I called and explained I was the PoA and that they were both in nursing homes on Medicaid and incapacitated and could prove it. They stopped contacting them, but as others have said in your case it varies from state to state, plus your grandmother technically does have the money to pay the debt.

Although not intending this to be critical of any of the responses given (but keeping in mind that this subject deals with legal matters as opposed to, for example, suggestions based upon experience from dealing with the behavior of a particular person having dementia), seeing the range of them reminds me of a time I was visiting a midweek class in a small church in Georgia. The elderly minister, who was teaching the class, asked a question. When one woman spoke up to give her thoughts, the minister politely said "Sister, I don't want to know what you think--I want to hear a 'thus sayeth the Lord!' ".