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Elderly & Credit Card Debt

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.




AAnonymous, Dec, 2017

The question stated that mom had no extra money whatsoever. Everything went to basic needs. Mom's income ss and any pension is protected by law and can't be taken from her as is pointed out. The simple straightforward answers is the debt doesn't need to be paid by mom or anyone. A cease and desist letter can be sent to any collector who persists.

rrobin, Sep, 2012
My husband is in a similar situation ..except that his mom (88) lives in a duplex which they both own. The mom lives in one unit and rents out the other. After the mortgage is paid, all that is left is about $1100 per month in SSI and a small pension to pay all other expenses like property tax, food, medical expenses etc. They live in California. The home has been heavily mortgaged because his mother rented out the other unit for below market rent for many years and created a mountain of credit card debt. She kept taking out equity to pay for her credit cards and now has reached the end of the line so to speak. The loan is in both my husbands name and his mother, as is the title to the house. They do not share any credit cards. If she dies, can the creditors come after my husband's portion of the property?
BBill, Sep, 2012
The phrasing of your question, and the facts you provide make answering your question a bit tricky.

If the creditors you fear are credit card issuers, they will have a claim against the land owner's estate. Let us say for the sake of argument the decedent's credit card and other unsecured debts total $100,000. Let us say the decedent's assets total $40,000. The estate's executor would need to liquidate the decedent's assets, and pay the creditors $40,000. The creditors would need to write-off the remaining $60,000 in debt. Neither the decedent's family nor friends would have liability for the debt.

You mentioned a mortgage and title are both a mother and her son's names. If one dies, it is likely the mortgage is written in such a way the survivor will have the right to continue to make payments. The title is much trickier. There are at least a half-dozen ways two or more people can title a property to affect its future interest when one owner dies. It is likely, but not certain, the title in the property becomes the other owner's when the mother or son die. However, I'm speculating here, and your safest course of action is to ask a lawyer to do a title search and learn the future interest for certain.

Why did I take what seemed to be a tangent into the property's future interest? It is possible the son here has no future interest in the property, but has liability for the mortgage.

Here is one other possibility: Let us say your mother-in-law defaults on her credit card payments. Let us say the credit card issuer or its collection agent files a lawsuit against her, and wins a judgment. The judgment-creditor discovers it cannot place a wage garnishment on her pension, and is barred from placing an account levy on her financial accounts. The judgment-creditor learns she holds title to real property, however, and places a lien on her property. The lien encumbers the property even if others (her son, for example) are co-owners.

My advice? The mother should consult with a lawyer to learn her options for resolving the debt, and to discuss using a quitclaim deed to place the property in her son's name alone. This tactic, however, is not without risk to her should her son decide to sell the property while she still resides in the property.
AAnonymous, Jan, 2018

The answer is probably quite simple. I very strongly suspect mom and son own the property with rights of survivorship. That means if mom is sued and there are judgments when mom dies the property automatically goes to the son and the judgments simply drop off. Again if the property is owned with rights of survivorship, Robin's husband gets the property free and clear of any debts or judgments owed by mom. It goes without saying that mom can stop paying the credit card debt now. They can sue her but they can't touch her income.

DDaniel Cohen, Jan, 2018

Thank you for sharing your thoughtful opinion, though I am not sure how you are quite certain how the property is held. There are reasons for and against holding property in JTWROS.

Not knowing all the facts it doesn't seem safe to assume that the course of action "goes without saying." There are counties in the US where non-exempt assets of judgment-debtor, or assets with value greater than the exemption amount, are at far greater risk of seizure than in others, for example.