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My Mother had a stroke 4 yrs ago and I became her POA. Now she is entering a nursing home on Medicaid and can no longer pay her Credit card debt. How should I handle this? Should I write them a letter? Declare bankruptcy for her? She ran up bills on credit cards by phone and internet. I fought with her but to no avail. What course should I take? I signed every paper by signing her name and then I put signed by , my name, POA. Do I have to pay her finances? I have been told no but I want to be sure as to how I should handle this.

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I am sorry your mom has entered a nursing home. I know how hard this is to deal with . I had POA for my mom and she also entered nursing home on Medicaid. I would suggest speaking to an attorney but based on my experience you are not liable for any debt in your mother's name as long as you are not listed on her credit cards. I wrote them all letters with a copy of my POA. They cannot do much. A couple of the creditors sent 1099 C forms. Basically the credit card debt gets declared as income for your mom. How this would impact her taxes you would need to consult a professional . I guess I was lucky in that once i sent letter with documents they wanted I never heard from them. I also do not think you need to declare bankruptcy. Your mom is probably judgment proof. Again I am sorry you have all this to deal with. How this country treats the sick and elderly is a crime.
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Lots of opinions here
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You absolutely do not have to pay your parent's credit card bills. My mom had four major credit cards credit cards all with balances - she owed about $30,000 total. I was dreading dealing with them but they never called to harass me. They did call the first month she was late and I explained she was in a nursing home on Medicaid and they got her entire pension and Social Security every month. Once they heard this and received written confirmation and processed my POA they never contacted me by phone again. However, one thing that is overlooked is the credit card company will issues a Form 1099-C - Cancellation of Debt. Basically the credit card company gets to report your credit card balance as income to the IRS that your parent is then responsible to pay taxes on it. Only in America where corporations rule the government is this allowed.
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Please consider that any debts could attach to your mother's estate.whether a creditor can file liens pr continue collections after a certain period of time, is also subject to STATE law where she resides. Your mother can still be sued. Her creditors CAN force her into bankruptcy to reach and liquidate assets. As her POA, you ate the person who must respond to that. Most credit card and consumer debts don't warrant this level of action...but...if they are large enough, dont be surprised if a lien is filed against a home or property. If your mother has any assets at the time of her death, the executor will have to settle the debts first before anything can be paid to her heirs. Something to think about if she has any significant ownership in anything and is not on Medicaid
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Regarding all the posts to the original question from Sideways: I am currently going through this with my mom. Thanks to those of you who suggested the PO Box and form letters. Regarding Margarets and a few other comments: One shouldn't assume everyone is irresponibly out on shopping sprees. My mom is 83 and didn't run up her debt in recent years going on shopping sprees. The only time she used her credit card was if she needed clothes (much of which came from second hand stores after a 40 lb weight loss from 25 days in surgical ICU 3 years ago) or when she needed medication at the end of the month and didn't have enough money in her checking account. The debt she had was old remnants from many years ago (hers and my dad's). When my dad died, she was left with half the income, no savings and no life insurance proceeds. I honestly don't know how she managed to make payments with the amount of money she got every month, but she did (more than minimum). After at least half a dozen falls in the past year, usually from losing her balance (she had 2 walkers), the last 2 falls broke both her wrists and she could not go back to living alone after rehab. Medicaid doesn't give a sqwat about debt and any they have first claim (at least in Ohio) on any recoverable assets after death. Both her SS and pension will go to the nursing home every month, except for $50 for personal care items like hair cuts, clothing, toiletries etc. She has no savings account anymore and is down to about $200 in her checking account, so there is nothing left to continue making credit card payments. (SS income is also considered protected income from creditors).
About debt going away: I took guardianship of my older terminally ill sister 17 years ago after her husband criminally neglected then abandoned her (but did not divorce her as he told my mother he would*). She too ended up in a nursing home and had already been on Medicaid for several years (end-stage renal disease automatically goes under Medicaid, at least it did then). She had a $10K balance on her credit card (not a joint account) when she went into the nursing home. I was POA and executor of her estate, which was only her $25K life insurance policy when she died. I called Citi Bank and TRIED to PAY THEM $10K dollars so her husband, who didn't spend 12 hours with her in the last year of her life, wouldn't get the money (the insuance was the reason he didn't actually divorce her). I begged the bank to take the money, but CITI Bank told me the debt had already been written off and they refused to take payment. After I paid for her funeral and any other tidbit I could possibly find, I still had to write her "husband" a check for $13K, which I would much rather have written to the bank.
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One other note on the liens on my parent's home. When the liens were there, the house was in both of my parent's names. The debts were paid off and the liens removed. The title of the house was then changed to have only my mother's name on it and my father was qualified for Medicaid.
When he passed away last year, he had no assets.
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Great posting igloo572. copying for future reference.
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Margarets, I will attempt to make this clearer for you. My mother AND my father had several bills that were sent to a collection agency. Two different law offices took care of the correspondence and the responsibility of collecting the debts from my mother AND my father. Four years ago when I took over my parent’s paperwork, I found that these two DIFFERENT law offices had put two different liens on the house. My mother wasn’t paying the property taxes either. I stepped in, communicated with the law offices who were attempting to collect the debt from my parents, and paid off the DEBTS from those two liens. I also paid the back taxes so that my parents would not lose their home.
SECOND issue: my niece convinced my father to co-sign for a loan for her to get a car. This loan was taken out using my father’s name only, and of course the niece. The niece stopped making payments on the car, it was repossessed and was auctioned off for a lesser value. The credit union where the loan was taken out was threatening a lawsuit to collect the monies from my father. When my father passed away I personally went to the credit union and showed them the death certificate for my father and his name was removed from further collection.
I hope this clarifies things for you. I dislike being thought of as attempting to mislead someone.
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If there is any money left from your mom's check, you have to use her money to pay her debts. However, you do not have to use your money to pay her debts.
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CarolLynn~It was me who about reading between the lines...I tend to be literal at times when reading info....:')
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Margreats, when a person dies and has no assets the debt is erased. GONE!
Where are you getting your information? Yes, all POA's are not written exactly alike. You should get your information correct before telling people on here what YOUR LAW is because it may not be the real deal. Be somewhat correct not just assume!!!
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CarolLynn - you know there must have been a change to interpretation on the laws on 1099-C's done within the past years. I think 1099-C's were just done as a byproduct of a foreclosure or a short-sale. So you expected to get the "income" made by having the mortgage written off when you did a foreclosure, etc. The 1099-C stuff on the IRS site and most google stuff is geared to how to come up with property items or depreciation on home stuff to offset the 1099-C. This is pretty easy as most property owners keep big ticket receipts on house repairs and it makes sense to have income from the $ forgiven on the mortgage.

But the cc company 1099-C's can be from years ago and there is no simple way to off-set the phantom income on those charges. I initially thought a "so-what" on the 1099-C because why would an 80 year old on SS even need to file taxes & then though a "wtf" just how could they rack up so much CC stuff. It was someone who did volunteer income tax at the library who told me not to ignore it as income reported to the IRS can come up as income when the state is verifying that you meet the income / asset limits for state programs (like food stamps, Medicaid) if your state dovetails IRS income data. BTW my friend said they couldn't do the IRS forms for it either, apparently none of the AARP or other senior tax volunteers programs can do them (only the simple forms get done), it has to be a CPA or other tax pro who can do them. There is an impoverishment form: IRS Form 982 - Insolvency Exclusion that has to accompany their taxes. It is totally loco to figure out the form too (well it was for me and I am pretty OCD on stuff) so I got a tax pro to do it and it ran about $ 300.
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Above

" YOU don't want to be responsible for triggering any 1099-C's, which might be counted as income and fully furnished said someone right to Medicaid."

(was supposed to say)

counted as income and REALLY MESS UP SOMEONE'S right to Medicaid
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Aging & dementia is a stress test & reveals all of the weaknesses in our health care system, social services, mental health care, financial services, and inside the family system.

If our society decides to tackle dementia comprehensively across all areas impacted by it, we might find it improves other aspects of our society. For example, by compelling ADA accommodations for physical disabilities, we now have curb cuts used by parents with baby strollers and pedestrians with grocery carts and skateboarders. By making things easier for one smaller group of the population, we've improved quality of life for others as. If our society gets better at dealing with dementia, we might find other things get better too. So connecting how to deal with financial problems to dementia related health care problems is a useful though imperfect development. This site - imho - does a tremendous service of providing different viewpoints on this. And for letting others know when they seem harsh - like what Margaret has been viewed as doing.

Dementia changes the personality of the individual - it effectively invents a new personality. Sometimes that personality is docile and more loving and trusting. Most of the time it is not - it is deceitful, paranoid, petty. Depending on the type of dementia, this can be a decades long decline. Being DPOA does not mean being a "helicopter" for your elder in checking and going through everything they do. What you can (or better yet) cannot do is limited….if ma wants to go and get order hundreds of dollars of from Coldwater Creek or thousands from Home Shopping Network, that is their choice and right to do until they are legally declared incompetent and a guardianship determined.

My mom has Lewy Body dementia was viewed by society as sharp as a tack in many ways till her early 90's, so it was easy enough to shrug off odd behavior as "senior moments" that in retrospect should have set off alarms. There are other factors in denial as well -- admitting she was declining would immediately have saddled us with pressing decisions. My mom managed her small world very well then would have a paranoia episode, it was when the paranoia was constant (they were stealing from her every day sort of stuff), that I started her to get the medical file to show the need for LTC @ a NH. For my MIL, who was most difficult, it was a fall that made decision making happen and she went into a NH but before that she fought any oversight into the clusterF* that her finances were.

I was just at my mom's home dealing with repairs (thank you Polar Vortex!) and went through yet another box of paperwork & notes from my mom from a few years ago that I saw just how much of the lost-cognition iceberg lay below a competent surface for my mom. For me, thinking of dementia as an iceberg is a good analogy. Something always seems to surface….and collide.
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Who is it that was talking about reading between the lines?

Ok, here's the line, not between.

See an attorney, NOT a bankruptcy attorney, but one who is experiencing financial matters, BEFORE you issue any letters.

By possibly putting the cart before the horse, YOU don't want to be responsible for triggering any 1099-C's, which might be counted as income and fully furnished said someone right to Medicaid.
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Sideways - OK so mom only has SS & no home?? Then you & her are totally in luck in dealing with the creditors.

You can send the following type of letter (this is along the lines of what CarolLynn suggested & she is spot on with suggesting Clark Howard):
"Dear Debt Collectors - This is in regards of Mrs. YYY concerning the above referenced account collection related to credit card #1234.

The only owner of the above account, Mrs.YYY, is advanced elderly. YYYs income is federally protected income (e.g. Social Security benefit) which is dedicated to her health care. As per Sections 407(a) and 1383(d)(1) prohibit creditors from reaching Social Security or SSI benefits by levies, garnishments, or any other legal process.

Any communication must be sent in writing to Mrs. YYY at the above address (this should be the new rented postal box address). 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; Department of Banking and Consumer Finance; and Ombudsman for the Department of Health and Human Commission, Senior Care Division, on her behalf.

This letter is not meant in any way to be an acknowledgement that YYY owes this
money. This letter is being sent to you within 30 day of receipt of your debtor letter.Thank you for your attention to this matter.

Jane Smith Jones in her limited capacity as DPOA for Mrs. YYY. "

Send each debtor the letter & certified mail with the return receipt (the green postcard @ the USPO). Should run $ 7.00 or so. As others have said, the debt collectors sell & resell the debt. You need to decided how to deal with it….some folks just let it play out and do nothing. If mom has nothing and your name and address CANNOT be compromised (like it's nothing like yours; or your address is very different from mom; the creditors don't know who you are or how to reach you) then I'd probably ignore the debt. My late MIL was a bit of a financial terrorist and we got the collectors letters & phone calls as my DH name was the same as his dad's. It was only from Hurricane Katrina that almost all that stopped. Although there was 1 bottom feeder that tracked her down to the NH in TX they got shipped out to and it was like a year later that it resubmerged. Collectors are relentless…

About the 1099-C, if you get one, post a new ? on it. Good luck Sideways and let us know how it goes.
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Depends on state as to when DPOA is in effect.. I live in Florida, and when we got my husbands I asked when is this in effect (tho he was in the process of being declared incompetent from the VA), the elder attorney said right right now. I have been to several caregiver workshops where there was always an attorney talking about DPOA's living wills etc. And all stated caregivers and anyone really should have one in case of the need its already in place.. So, I went to my elder attorney and had one drawn for myself, with a son being the primary DPOA. She told me that in Florida it was legally in effect as soon as I signed and they notarized it.. When I sent a copy to my son he noticed it had nothing stating when it goes into effect. I told him it actually is now, but dont get any ideas! he laughed and I trust him 100%. BUT in the end, depends on your state as to when the are in effect.
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On a general note, the best way to avoid debt collectors is not to go into debt in the first place or to *pay your debt*. That is what you legally agree to do when you take on the debt, not a nasty surprise.
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Except that it was not necessary to read between the lines of my comments. My *first* recommendation was to see a credit counselling agency. My *second* comment said that debts had to be paid from the *debtor's* assets, not the PoA's. Both are on the *first* page of comments on this thread, so not hard to find.
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AND, when your mom passes, you can then send a letter and a death certificate and that generally stops collection attempts.
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Can you handle going to see an attorney about this matter? My tax attorney advised not filing bankruptcy (not enough debt, not enough money to pay a bankruptcy attorney) AND NOT notifying creditors. If they pester you (your mom) for a while and then write it off without any agreement to cancel your debt, you will likely never receive a 1099-C (cancellation of debt), but they will still so it off to the debt collection bottom feeders. When you write each of them a "drop dead" letter (see Clark Howard's website - a consumer guru, but a dot com so can't be posted here - for info about & template of said letter), the one you notified not to contact you, won't, but they will sell it to yet another collection agency. Eventually it will play itself out.

Now, that was just MY advise that I paid for. Free to you, and you know sometimes what free is worth, so again I'm asking, can you go see an attorney. Hint: NOT a bankruptcy attorney because they WANT to file bankruptcy. It's their business, after all.

As igloo suggested, a PO Box or mail company box would be in order to keep her dress separate from your own.
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Try remember that some people are like me... being from a dysfunctional tional family we don't always read well between the lines.thanks for the clairification.
e ca t
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My mothers attorney did say she could do whatever she wanted with her mo wy until we could prove she was incompetent.
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Margarets- glad to hear that..that is not how you were coming across to me.
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@Sylvial - I asked ONE very reasonable question. Four years is a long time to let someone (following a stroke and therefore having significant competency issues) rack up debt without thinking through the consequences. It's the PoA's job to manage finances in the persons's best interest, not to let things fall apart.

@sharynmarie - NO ONE is saying *you* have to pay your mother's debts from *your own* assets. As PoA, you must pay them from *her* assets. And the law doesn't say that people can do whatever they like with their money, it says that they must pay their debts. If a person with a long history of frugality is suddenly being careless with their money, that is a *sign* of incompetence and it's time to take that person for an assessment.
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Opps.......Not all DPOA's are written the same. Some are effective immediately upon signing...others not until a person is diagnosed as mentally incapacitated. My mother took care of all the finances...she was very frugal and continued to be that way as she aged even getting worse with Alzheimer's. Many elders do not trust their children not because their children are bad...because the elder does not want to give up control even though they are making poor choices. Law states that until a person is incompetent...they can do whatever the HELL they like with their money...that includes giving it away...running up large credit card bills on a credit card they have had for 30 YEARS and hardly used until recently. Not all DPOAS are written the same...some are effective as soon as the primary person named has signed it...my mother's was written so we could not activate it until she was diagnosed incompetent. We went to my mother's elder law attorney because our mother was not paying bills on time, she was trying to cancel her long term health care policy....her attorney told us straight up....until you can bring me a letter from a dr. stating that your mother can no long make decisions for herself...I can not help YOU!!! She can withdraw all her money and give it away...that is her right to do until you can prove otherwise!!!! So according to what you are saying...if my mother went on a credit card spending spree totaling thousands of dollars...I am responsible for that debt????I don't think so and I would fight it tooth and nails. That is BS!!! If a financial instituation grants my elderly parents a loan to help out a grandchild or great grandchild who is in severe debt...I sure as hell am not going to pay it...what was the financial instituation thinking when my parents are in their 70's or 80's when the loan was granted...regardless of their credit rating at that time???
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Margarets~Not ALL
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Your approach is what bothers me. It's similar to interrogating someone. I dealt with a similiar situation and believe me they do the most damage before you are aware they are incompetent. I saw my mother every week and was not aware of how incompetent she really was until I lived with her. They have a way of hiding it well.
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PoA doesn't take effect until the person is incompetent. At that point a PoA can, and absolutely should, clamp down on credit card spending, opening new accounts, etc. The OP has been PoA for 4 years.

Excess debt means there is less money for care & comfort, to leave to beneficiaries, etc. And it makes more hassle and work for the PoA and executor. It's a big problem that people should take seriously, not just wave off because they mistakenly think the debt will be erased.

Also, I asked that question days ago, so I don't see why it's suddenly bothering you right now.
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It is not supportive to ask someone why they allowed an incompetent woman to run up the credit cards in the first place. She told us that she fought her to no avail. I know how hard this can be firsthand. Unless someone is declared incompetent you cannot just take away their credit cards. As her POA she will not be held responsible. Who really cares if they ruin someones credit that is in a nursing home. And if she has an estate they will take it for her care. Medicare does not care about any debts they have. They take the social security. She is dealing with enough being POA. I would not suggest adding more stress trying to file bankruptcy ect. When in the end it doesn't really matter.
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