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Elderly & Credit Card Debt

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Daniel Cohen
UpdatedDec 22, 2017
Key Takeaways:
  • Prioritize budgeting for your mother's basic needs: housing, food, medical care, and essential living expenses.
  • Do not let property taxes go into arrears.
  • Answer any summons or complaint that arrives.
My 81-year-old parent cannot afford to eat, pay for medicine, pay her property taxes, and make credit card payments. What are our options?

I am a caregiver for my 81 yr old widowed mother, living with her in the very modest home she owns. Her credit card debt is so high we cannot make the payments on a few accounts and still have money to eat and for her meds. I am already on payment plans with reduced interest, but still can't make it. Is it a good idea to NOT pay those few accounts that will outlive her, and concentrate on the ones we can pay and hopefully pay off?

I am sure your mom planned on paying her debts when she opened and used the accounts. It seems reasonable that a person who has spent a lifetime paying all her debts back would want to continue making that a priority. However, a higher priority is making sure she keeps her home, has food to eat, and proper medical attention. The credit card debt is less important, though you should weigh potential consequences based on all the facts that are involved.

I recommend creating a budget that starts with the essentials for your mom's daily life. Include housing, food, medical care, and related essential living expenses. The property taxes are a high priority, as failure to pay those can lead to losing the home.  

Compared to providing basic needs for a parent, usingt limited funds only to tread water on credit debt payments, not even bringing the balances down, comes in a distant second.

Break medical debt into three distinct categories:

  1. Medication - This is a top priority if the doctor orders it
  2. Medical bills from a provider your mom will or may need to see again -  Not paying could lead to her not being able to see the doctor, so try to maintain payment, asking for flexibility if necessary.
  3. Medical bills from a doctor she won't need to see again - I recommend not paying these if there is not enough money to cover necessities.

All of these creditors could choose to sue your mom, which would be more of a nuisance than inflict immediate harm on her. Her pension and Social Security income are not attachable for this kind of debt. It is true that a judgment creditor could get a lien on her home, but that seems less important than the ability to pay for basic needs. 

You didn't specify if there is equity in the home. If there is not, your mom may be considered judgment proof.

The term “judgment proof” is not defined in any state or federal statute or legal textbook. It is the circumstances where a debtor has no assets that a creditor can reach legally under state law.

Take the extreme example of a homeless person who owns only the clothing he or she is wearing and has no income: Creditors can pile judgment after judgment on that person but unless his or her circumstances change the creditors will never recover a dime. In that case, it makes no financial sense to pursue a lawsuit against a person who has no recoverable assets.

I do not mean to suggest a person needs to be homeless to be considered judgment proof. All states have laws that exempt certain real and private property from judgment. For example, Social Security and pension income is off-limits to judgment (with some narrow exceptions). Clothing, furniture, and personal items are exempt, too.

If, however, your parent is in good health and will most likely live another five years or more, then servicing the debts may make sense. If your parent chooses to pay the debts, the question becomes how. There is no right or wrong answer.

Consider ignoring the larger debts initially and instead focus on the smallest. In my experience, having fewer creditors is better than many because some creditors are aggressive about their use of the courts to collect debt. You might think that a creditor with a smaller debt is less likely to sue a debtor, but some creditors do not apply logic when choosing which clients to sue.

You might also consider hiring a professional to settle the credit card debt. See the debt settlement savings center to be referred to a pre-screened debt settlement provider that is matched to your needs.

To learn what debt relief option may best fit your goals and capabilities, use the Debt Navigator, which can give you a customized report of your debt resolution options, including the costs of each.

I hope this information helps you Find. Learn & Save.