My father is 73 and diagnosed with moderate dementia. He has about $30,000 in credit card debt--and no assets. He has been maklng payments on these bills monthly, but is now being moved into an assisted living facility. He has insurance that will pay for 95% of his first year. He received about $2800 monthly in pension and social security. I'm thinking that he should stop making his credit card payment and "save" his monthly money to cover his second year in the assisted living facility. What is the pro/con of this thinking? Must he declare bankruptcy? I believe that both his pension and social security will be protected from the creditors--correct? Thanks!
Were you ever appointed power of attorney....
His current upkeep is the number one priority.
It sounds like any payments made will never clear the debt....
Creditors can request assets when the estate is probated. if any there is any residual.
But for AL you may have a problem in admissions. SInce most AL (like IL) are private pay, they can run a credit check as part of the admissions process. If you have lousy credit, you may find they will never have an opening for you without a significant deposit or someone else to sign off to be financially responsible for you.
60K isn't that much debt, how to deal with it, well a lot depends on what the debt is. You know the majority of bankruptcy's are medical debt. You might think about bankruptcy and then moving into subsidized housing.
You kinda have to be careful with debt & Medicaid. If you default on credit card and often medical debt, they can send you a 1099-C for the amount of the debt, interest and perhaps also fees. The 1099-C is fully reportable income for IRS too. So can totally be a problem for Medicaid. You have to do taxes & have enough expenses to establish impoverishment for that tax year. If you are in a NH, they run 5K - 15K a month, so a few months of private pay can establish impoverishment. You may not have the ability to do that, so you may be better off doing bankruptcy. Most cities have Consumer Credit Counseling Services which can come up with payment options for CC debt. Their services are free. Maybe check with them and them with bankruptcy attorney to see what is the best reality. Good luck.
If all the father has is the income she described then it goes to pay for his care. in AL period.
She does not have to pay the credit card bills; he will never get them paid, he will not have taxes as his expenses are eating iall his income in AL
Daughter should in no case agree to any credit card collection settlement
Credit card is the last priority .