What to do about credit card debt as DPOA

ICalE

My 85-year old Mom with dementia now in an ALF under hospice care for now has about $14,000 in credit card debt. It looks like the card has not been used in over two years, and most of the charges seem to be at least 10 years old.

As POA I negotiated the APR down to 17% from 27% for the next year, but the minimum monthly payments are still close to $300. I've been paying $400 to $500 the past six months to get the minimum lowered.

As we are now applying for Medicaid since she had nothing saved for retirement besides about $50,000 what should we do about this debt? Is there anything I can do? And if she moves to a SNF fairly soon and Medicaid pays the SNF along with taking her SS Income, what then?

terei

Under these circumstances, credit card companies usually dont aggressively try to collect. IMO you should not be paying anything on it. Call the company, tell them your mom’s health + financial circumstances(dont tell them you have POA) + that she can no longer pay on the balance. My guess is that they will do nothing to collect except continue to send bills.

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ICalE

https://alzconnected.org/discussion/comment/185195#Comment_185195

It's in an IRA, and we've been withdrawing some of it monthly to go towards the ALF until Medicaid kicks in which should be in 30 to 90 days. The spend down period is over and was not sufficient to pay this off. She still has some medical debt and we are making payments for cremation too. Medicaid allows an IRA, a home, and a car. She has all three for now.

BassetHoundAnn

You should talk to your elder law attorney about how to proceed. If there's no money left in your mother's estate when she dies, there will be nothing that the credit card company or whomever holds the medical debt can collect.

You should definitely pay in-full for all her final expenses now, including cremation, funeral, etc.

If you think there's a chance that there will be money left in her estate, you might call the credit card company and the holder of the medical debt now and try to negotiate down the amount that your mother owes. I've heard that these entities can be very flexible. They'd rather get a few thousand dollars now rather than have to sell the debt to a collection agency later for pennies on the dollar or less. Tell them you're the DPOA when you call, and the medical POA if you are. I'm no expert but I've heard that such negotiations are possible.

Remember that once your mother passes the DPOA is no longer in force, and the credit card company and holder of the medical debt will only deal with the executor of the estate.

ICalE

Update from Elder Law attorney: The SS and IRA income go to the facility; there is no money to pay the credit card debt. The income is protected from creditors.

We also have $10,000 in medical debt from the past year. I suppose the same thing applies, but I'm checking in with the attorney just in case.