My father will not be able to afford his credit card payments after he moves into an assisted living facility. What are his options?

Taisa & Kelly - I wouldn't pay another cent on the debt, there is no way the debt is ever going to be paid off. SS is protected income and can't be touched by any creditors except the IRS*. Sections 407(a) and 1383(d)(1) prohibit creditors from reaching Social Security or SSI benefits by levies, garnishments, or other legal process.

The debt collectors are relentless vampires and you just have to learn to deal with them and get to the point where you find it amusing. You kinda have to do something about it because the debt collection process can go on for years as the debt gets sold and resold over & over. Mom's or dad's debt is not your debt, please don't let yourself get buffaloed into assuming the debt. Personally I would NOT do bankruptcy. First I'd get a mail box, like one at a UPS shipping store or other mail/ship small store and that becomes the new mailing address for everything for your parent. This way you can do a mail pick up every couple of weeks and deal with the paperwork which will be all together and separate from yours (so you don't get crazy every day when you get mail). Second, I'd sent a letter, via USPO sent certified with a return registered card (the green post card) to each an every creditor and debt collector.

The letter reads: "This is in response to a letter received on AA/BB/CC sent to YYY concerning the above referenced account related to credit card #1234.
The only owner of the above account, YYY, is advanced elderly. YYYs income is federally protected income (e.g. Social Security) which is dedicated to her health care in a facility as per medical necessity. Sections 407(a) and 1383(d)(1) prohibit creditors from reaching Social Security benefits by levies, garnishments, or other legal process.This is your notification that should you or any of your associates or any affiliates attempt to contact YYY directly, a complaint will be filed with her state’s: Attorney General Office; Department of Banking and Consumer Finance; and Ombudsman for the Department of Health and Human Commission, Senior Care Division, on her behalf. Any and all matters concerning the above reference account must be sent in writing to her DPOA at the above address. This letter is being sent to you within 30 day of receipt of your letter.Thank you for your attention to this matter.

Type in your name as J. Smith as DPOA for Mary White Jones. Then go to the USPO mail them. Will run about $ 5 - 8 per letter with the RRM card. RRM card is important as the signature establishes that somebody actually got it.

What will likely happen is if the debt is still being held by the original creditor (like capital one) they will do a follow up letter to you and then write the debt off. You will get a letter that this has happened. This is pretty straightforward. But usually the account would ALSO have also been sent to a collection agency, who will contact her also.The collection guys are relentless and it will get sold and re sold, so each time, you get that letter you saved in Word and print it out and mail it certified RRM.
Should take about a year or two to run it's course to have it go away.

But you need to be aware of getting a 1099-C Cancellation of Debt. The original credit card company, like Capital One, will file a 1099-C to your mom for the whole debt cancelled. It may be in the tax year they do it or even in a future year. If you get a 1099-C, you have to deal with it by filing taxes for your mom for that year to establish impoverishment otherwise the 1099-C can be income & affect Medicaid & can owe the IRS taxes on it. Cancellation of debt is nothing but fun.....

Yes! Pension and social security cannot be touched by creditors, and bankruptcy is not a bad choice either. I've worked at a small law firm for 6 years and we specialize in bankruptcy. It is truly a simply process, and from start to finish your father's bankruptcy should be settled in a matter of months. As long as he truly has no assets (property, cars) then a social security and pension income should be a simple chapter 7.

Tomatilla - I know your situation. You are fortunate that you are in a program that does an AL waiver so Medicaid will pay. These are few and far between. My mom is in a NH & on Medicaid & still has her home. Myself and another family member pay for all and upon her death will file a claim against her estate for those expenses which will be deducted from her Medicaid MERP tally as per her states law on Medicaid (Texas). I met with her attorney to review the situation when she was in IL. Financially, keeping the house and doing minimal maintenance & costs (taxes, insurance, etc) made more sense than selling the house. For us, its managable as there is no mortgage and she has really good neighbors. My mom is in her 90's so that makes a difference if she was alot younger like 80, keeping the house wouldn't make sense as we'd be looking at the possibility of years and years of expenses. For us, one big issue is that the house would be a very difficult sale, likely to be on the market for a long while plus the costs & time to get it market ready would be significant. Her $ really was better used to pay for her to be able to live in IL for number of years.

One thing to consider if there is debt, is whether in your state, a creditor can place a lien on your home. In Texas, cc or other unsecured debt can't get a lein on your home. I think this is true for Florida too.

If your $ is really tight, I'd pay the taxes first & foremost and let the other house costs slide. You don't want to face having it go to tax sale and dealing with that.
You do want to continue to file her homestead exemption too.

What about renting it? You mom would have to watch the amount so that it doesn't take her above Medicaid income level but that might be a good way especially if you can find renters who will repair or do maintenance. Renting for us we decided against as it would cause ill will with the neighbors.

I'd still look about for NH so that you have a plan for when your mom needs a higher level of care. Good luck.

About bankruptcy: I get the Ch. 7 part but what if there is the property that is the home/primary domicile? My mom is in an ALF, and the program that helps pay is based on Medicaid eligibility.if her house is sold, the proceeds will be treated like assets and no help for the ALF. We would have to move her back home and it would not be the best situation as I would be the 24/7 caregiver and I have health issues that make me unable to do much. The ALF is great and does so much for her and she does well there. Her home is in bad shape, would not sell for much, and we would have to put belongings in storage. If the house was OK, we would just leave it. However, it has been broken into, has roof issues, and ny sibling who lives 20 miles away and has a good income, won't even check on the house b/c she considers it a bad neighborhood. As you might guess, she contributes zero. Since I can't worth now, my husband pays anything out of pocket and that is eating into our retirement plus our youngest is still in college. Mom is so sweet but she cannot live alone. She forgot my birthday this year. I am between a rock and a hard place. The ALF is private pay only. Others that take Medicare/Medicaid in my area are awful--wouldn't put my cat there. Thank you for any ideas. I do plan to see an ElderCare atty. I have already spoken to 3--not much help other than "so sorry" and you will have to take Mom home. At this rate, between health and stress, she will probably outlive me.

vb25915n, did you consult an attorney before putting Mom's house in your name? I hope Mom doesn't need to apply for Medicaid within five years. Medicaid allows people to own a home, but there is a penalty for giving assets away within the 5-year window.

Laws and regulations are complicated enough to require professional guidance beore taking major action -- even if the action seems "obvious."

Tomatilla, I don't understand the house issue. If the house is sold the money would be used for the private-pay ALF costs, right? Does Mother have other debts? How would bankruptcy fit into this picture?

I'm curious about the benefit of bankruptcy for Taisia's father, because I know someone in a similar situation. Father has no income or assets that can be touched by creditors. His credit rating is no longer of concern. What are the advantages, if any, of filing for bankruptcy, as opposed to just notifying the creditors that there is no money to pay them and Father is in a care facility?

(I feel bad for the creditors, but either way they are not getting paid.)

In NJ most AL require 2yrs out of pocket and then offer only 10% of there beds to medicaid. Be careful, they will all tell you that you'll get a bed not true, get it in writing. As a care giver myself, we have a difficult decision to make when we no longer can give the type of care from home that our loved ones need. We all think AL or NH, what about in between the two. I am not a fan of either ,AL or NH (read my posting in the discussions catagory 8/7/12 titled "My Mom") you'll know why. In the northwest families combine resources by renting a house and hiring a full time certified health care worker. This cuts the cost of care significantly and gives our parents the care they need. My wife and I are putting this together for my mom . We have researched this concept fully and feel very strong about it. We are looking for positive or negative feedback.

When a person's credit rating is of no value anymore, you can just do an involuntary bankruptcy by not paying them. They can't attach the benefits, so they are out of luck. I don't see how you get a sick elder person to a bankruptcy proceeding, anyway.

The Veteran 'Pension', if he is wartime era is $1703, not $2,000,
This case illustrates the falicy of people not looking at the possibility of Medicaid until they are faced with a Nursing home. Medicaid is not a tool for "Assisted Living"
Medicaid has a 5 year lookback of most assets, and don't count on Cash Value Life insurance on the Dad, as it is an attachable Medicaid Asset.
The Irrevoiccable Trust for the house is the best thing a famly can do, Mom & Dad can still live there as long as they are able. All part of an orderly transfer of assets

Please do consult with an attorney who specializes in elder care law.There are several answers on here that, based on what I've learned over the past five years of caring for elderly in-laws, might not be in your best interest. For one thing, I would be very cautious in following up on contacting someone who advertises that they can eliminate or significantly reduce your debt, and only charge 10% of what they save someone. I have read unfortunate stories about such people charging money up front, but never coming through on the savings. Sounds like one of those "if it sounds too good to be true" stories. Also, if someone is unable to pay their bills, filing bankruptcy is almost always the best way to go. It is a legal proceeding. Simply defaulting on bills leaves a person subject to being taken to court and having judgements placed against them whether they ever appear in court or not (especially if they do not). And yes, putting someone's assets in someone else's name does not keep them from being counted in the Medicaid application process, if those transactions are done within five years or less of applying for Medicaid. Please don't add to existing troubles by going about these things the wrong way. Consult a valid, knowledgeable, experienced elder law professional. If you don't know where to contact one, check with your local Area Agency on Aging or legal aid society. As the Wicked Witch of the West said when trying to get Dorothy's ruby slippers in the "Wizard of Oz", "these things must be done delicately." Good luck!