Can my father's credit card bills be set aside?

2 answers | Last updated: Nov 21, 2016
Nygiants20 asked...
My father is in a nursing home but has considerable credit card debt. California state medi-cal requires that all but $35 of his income be paid to the nursing home. So, my father no longer has the resources to pay his monthyl bills. Isn't there some way I can get the creditors to close the account without further payments or harrassment? Thanks

Expert Answers

Maria Basso Lipani writes a popular website on geriatric care topics, where she puts her expertise as a Licensed Clinical Social Worker to good use answering care planning questions. Maria is a graduate of Columbia University School of Social Work and is licensed in California and New York.

To be clear,  a person's credit card debt cannot be transferred to his or her family upon his or her death.  This means that your father's credit card debt will die with him.  I'm mentioning this because collection agencies will say almost anything to get the debt repaid, so it's important that you be able to distinguish what's true from what's not should you one day be the unlucky recipient of one of their harassing phone calls.  

That said, there are a few things to consider in the here and now.  Since your father has qualified for Medi-Cal I am assuming that he does not have any large assets.  In this case, there is not much that the credit card companies can do.  However, those with debt who do have assets such as a home could be sued by the credit card company and a lien could be placed on the property (possibly even force a sale) to pay back the debt. If your mother is alive and still living in a shared home for example, this would be something to consider.

Some credit card companies will forgive the debt if it's communicated that the person with the debt supports him or herself with Social Security alone (and in your father's case, even that is being taken by the nursing home).  However, it would be wise to consult with an attorney before communicating with the credit card company to thoroughly explore the implications. In some cases the IRS may choose to tax your father on the amount forgiven.

While you're deciding how to proceed there is a way to stop the harassing phone calls.  Under the Fair Debt Collections Practices Act your father can request in writing that the collectors no longer communicate with him about his debt.  This may or may not work, but it is worth a try.  

Community Answers

Orangeunsub answered...

I was in a similar situation with my mom and her credit card bills. It was just the 2 of us living in her home and things were about as 'normal' as possible until about 2009. It turns out mom was suffering from alzheimers and had been but I or no one realized it. In February, 2012, mom finally had to be placed in a nursing home. For the 3 years and more before she took ill, I had started taking care of her finances I was somewhat a bit fortunate to have a little more than a basic understanding of collections practices, what they can and can't do or go after, attach, garnish, force sales whatever means possible to pay off unsecured debt. I had worked for a finance company for what seems like 100 years ago and for collection agencies on and off over the years. A truly horrible job.

Mom wound up having bout 30,000 in cc bills when she went into the NH...I knew that mom was basically 'un-collectable'. As sad as it sounds, that everything that had been done for Medicaid purposes also protected her from these debts. the thing to be careful is is to not intentionally go out and run up all the cc bills willy niily. You see people do that before they file bankruptcy and it does not go unnoticed by the judge or the courts at times and may not be discharged. I want to be clear that, what I did for my mom was no scam or intentional ways of not paying the bills, I just realized when I found out that the NH will take every cent of her income that there was no way these were going to be paid. I wrote to the banks, explained the situation. I am sure they did their own due diligence, part of which I saw and checking out mom's resources. All, except Citibank (the lowest bottom feeders I ever dealt with, IMO), realized the situation and wound up writing the debts off as a 'loss'. When they see there are no assets and verify somehow that you are telling the truth about where your parent is or their illness, they really have no choice. Just because you may be a power of attorney or a caregiver or child, or even an 'authorized user' on the credit card accounts, you are not liable. again, please note above when I mentioned the running up of the credit cards etc. Id you do something silly like that to take advantage of a situation, they possibly can ask you for some re-payment, based on some type of fraud or something similar. I am not an attorney, but am making an assumption, and yes I know about assumptions. Its just a blanket warning.

good luck and god Bless you and your family and my prayers for your struggles

Billy H