My mom will be moved to a nursing home shortly. She is now in the hospital. She will be on Medicaid as of May 1st. My mom has a balance on her credit card that she will not be able to make monthly payments once Medicaid kicks in. What do we do about this? Will we have to file bankruptcy for her because of this? That is the only bill that will be outstanding.

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The Medicaid people should probably know about this. Each state is different, but it seems late in the game to think of doing this without the knowledge of the Medicaid folks, since the paperwork is already filed. Personally, I would ask them. Maybe you should call an elder law attorney, first, however.
Good luck with it all. We'd like to know how it works out in your state.
Helpful Answer (1)

Medicaid really doesn't care about her debts - they are all about what she has done with her assets in the look-back period before she applied. For you to be truly concerned about her cc debt it depends on what her assets are. CC debt is unsecured debt so in order for them to get any money there has to be an asset that they can try to get.

If she owns no home and her only asset is her SS monthly then there is nothing the creditors can do. SS is a federally protected income so can't be attached.

Not all banks know this, however. If the debt recovery company actually comes after her and goes through to file against her and gets a judgement against her then they could try to attached her bank account. But if there is only SS check in in, they can't do it. You may need to send a letter to her bank to remind them of this

If her check is going straight to the NH from SS then there is nothing they can do as it can't be attached as there is no bank account to go after.

If she still has a home and cc debt then it is different. In TX & FL, cc debt can never get a judgement against her that is placed on the home. In TX & FL your homestead is untouchable. So the debtor is out of luck in those states. In most other states they can but until you go to sell the house the lein doesn't have to be dealt with. If she is on Medicaid and has a house, the MERP program (Medicaid
estate recovery program) will be getting any of the $$ made on the sale of the house before unsecured creditors. Remember CC are unsecured.

Also depending on the state the debtor has to refile the lein to have it continue to be attached to the property. That costs $$ and takes time, most don't.

But remember no matter what they have to go through the whole debt recovery process, file a lawsuit, have her served, and go to court, then get a judgement, etc. in order to get a lein. In order to serve someone, they have to be competent to be served, which if she has dementia, she is not.

If i were you, I'd send a letter to both the cc company and the debt recovery company (if she's at the point of getting those type of letters) informing them
that XYZ is elderly, dementia in a nursing home whose only assets are SS which is federally protected and there will be no further payment on the cc as all of her assets are federally required to be completely and directly paid for her care. The letter should be written on her behalf at whatever the address was on her credit card statement. NOT the nursing home where she lives - you don't want mom or the staff at the NH getting these calls. Send the letter certified mail with return registered card. You may have to do this a couple of times. The debt recovery companies are constant and her debt will be sold after a period of time to yet another company that will send the same type of letters again. So send your letter out again to the next one too. It can take a couple of years for the cycle to stop but eventually it will. Each state has a specific statue of limitations on how long they can go after a debt. If mom's state SOL is 3 years and her last payment was April, 2011 then the debt is SOL is June, 2014. After that they cannot try to get a lien placed on her or her assets.
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debbie - the NH is correct.
In order to be on Medicaid, the resident is required to pay ALL of their monthly income less whatever is their states personal needs allowance to the NH. In some states, if there is an empty home owned by the NH resident and it is actively listed on the market with a licensed Realtor, the state will allow a utilities and maintenance allowance for a set period of time.

If there is a home and family is living in it, then they have to pay for all on the house.

For example, my mom gets $ 1,900 a month from SS and retirement. Her NH gets $ 1,840.00 a month as she is in Texas and they have a $ 60 a month personal allowance. She went into the NH with $ 1,500 in her bank account which basically sits there every month and will be till she dies. The $ 60 a month goes into a trust at the NH for her to use for hairdresser, candy, shopping stuff. None of the $60 goes to anything other than her personal needs for being in a NH. She still has a home and I and another family member pay for all costs associated with the house and upon her death will file a claim against her estate for our costs and let the state Medicaid program know the exact amount and with documentation. This amount will be reduced from any monies that the state Medicaid program can get via MERP ($ recovery program after death) too. For us this works and is our best long term option as her house would be a difficult sale and the expenses on the house are manageable as it is mortgage free and modest. We can do this as the house is empty. If someone is living in it, this exclusion, I'm pretty sure doesn't apply.

You kinda have 2 options:
to send a letter to all her debtors stating she is in a NH on Medicaid and there will be no further payment on any of her accounts and you are NOT responsible for them. Whomever is her DPOA should do these letters.
Or let them just pile up and ignore them.
imho a lot of this depends on how much grief you can deal with as the debt collectors are ruthless. If your mom has no assets (house or car) then there is nothing they can get. She on Medicaid so she is at poverty level. If she has a house and you live in a state where the debtors can put a lien on the house, then it can be a issue as it puts the ownership of the house in jeopardy.

One thing to watch for if she has credit card debt. The CC can write the debt off. BUT they likely will issue your mom a 1099-C for the full amount of the cancellation of debt. This can count as income and you have to pay taxes on it too. It can also place her above the income limit for Medicaid. So if she gets a 1099-C don't ignore it but she will need to file taxes and do the form for showing impoverishment and this gets around having income and owing taxes.

The NH's are required to get all her income in order to have her there under the state Medicaid rules. If you don't do it, they can do a "30 day notice" on her and you will have to find another NH. And the new NH might require a hefty deposit because of the billing issues with the old NH.
Helpful Answer (5)

Austin - I will have to disagree with you on sending mail to the NH. One problem with things going to the NH that if the person has dementia and is really not capable of doing anything about it the letter(s) or notices will just stay there without the proper action being taken, Most demand letters have a 30 day window to respond and if you miss it then the debt could change into something else even more serious.

Also the NH or LTC is not the residents legal or authorized representative, that is the DPOA, guardian &/or family members role or responsibility.

I would really caution anyone from making the NH do anymore than deal with the health care and safety of the resident. Most NH have such pitiful reinbursement from Medicaid that same of them are being faced with having to limit the # of beds in order to be profitable. They may be licensed for 200 but instead only do 175 as that is the tipping point for staffing costs. So they can to a degree pick & choose who for residency. If a resident is a constant bother with phone calls from debt collection companies - which are relentless and can call 4 - 6 times a day - or a a ton of letters or legal documents, then you could find yourself having to move them.

If you personally have a ton of debt from your late husband, then perhaps you should look into bankruptcy. If paying his debt is leaving you virtually at the edge of poverty that could be a way to end it and start aftesh. Consumer credit counseling has offices in almost every major city - they could advise you better. Good luck.
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My father currently Iives with me in PA. He is 89.5 years old and I'm starting to look into Assistance Living Facilities. He has no assists. He receives SS and a small pension. Since he is a Veteran, I'm also looking into the VA's Aid and Assistance program. I will need all three incomes to pay for his monthly home costs. He also has debt, one with his bank and another credit card, which he won't be able to pay when he does go into a home. What is the process I need to do to let the creditors know payments will be stopped when he enters the home? This is all new to me.
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1beautiful - there is a good article on all this in creditcards as it pertains to Nevada: "Lawsuits over credit card debts spike in California, Nevada, Florida", Courts in states hit by recession see a parade of debtors…..By Martin Merzer

It sounds like you want to do whatever to keep your home, so it is good that you pay your mortgage. Lots of people do the bankruptcy route, it does screw your credit ability for a while but only you can determine if this matters. So if you need to refi your mortgage to a lower rate that would be difficult to do. I have known of people who did bankruptcy but excluded their Macy's and a Mastercard from the filing as those were current and zero balance so NOT included in the filing. Who knew this technique could be done!! so even after bankruptcy they still had those cards to use. Yeah totally manipulating the system but clever.

I would suggest that you get all your debt letters together and go see someone at Consumer Credit Counseling. They are a non-profit. They can tell you specifically what Nevada law allows for a debt collector to do legally in your state. They have a formula to figure out how long it would take to pay off, negotiate with creditors OR tell you realistically that those things just won't work and bankruptcy is your best way. Sometimes it's good to hear all this from someone else who sees this all the time. Good luck.
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I have same problem as you. My mother is going in a nursing home today.

All of them (attorneys) said don't bother to file bankruptcy. Not much credit companies can do if your mother doesn't have assets they want if Medicaid takes over her SS checks.
Helpful Answer (1)

debbie1, the answers above, from last year, should be very helpful to you, in general.

Why does the NH expect the money in your mother's account? Has she been living there, and owe them some money that Medicaid won't be paying? Is the money in her account greater than the assets she is allowed to retain?

I'm not the one to answer your question, but providing a little more detail may help someone more knowledgable give you a specific answer.

Are you her POA? Are you on your mother's checking account?
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Yowch. $400 a month minimum repayments? That sounds like rather a lot of outstanding debt overall. I'd get some advice from a debt counsellor if I were you. Do you have POA for your mother?
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i am starting to look into an Assistance Living Home for my Dad who is 89.5 years old. He has been living with me for the past 9 months and prior to that, with my brother. He has no assists. He receives Social Security and also has a small pension. Because he is a Veteran, I will be looking into the Aid and Assistance program to help pay for his monthly cost of the Home. He has debt with his bank visa card and another credit card. He will need all his SS, Pension and VA assistance to help with his Home monthly cost. How do I address the problem with his debt, which he won't be able to pay back?
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