My BF's mom is swimming in financial issues. She's finally open to us sitting down and taking over. We're considering the best way to get some of her monthly payments down is to get a $3200 credit card and $500 line of credit (both with Navy Fed CU) cancelled. I don't even know how they approved her for this credit, her score her entire life has been abysmal. If we just use her rent + utilities + phone + car insurance as expenses to calculate her expenses to income, she's using almost 60% of her income on just those four things. Not even touching on things like medical copayments, groceries,gas, or minimum payments on other debt and collections accounts. She's been diagnosed with Parkinson's very recently so we anticipate a lot of doctor visits and copays in the near future. I'm interested in other people's experiences getting a credit card cancelled. (We do know it will affect her credit score and that she must include the cancelled debt on her tax return -- she still won't make enough to have taxes with this cancellation plus her small SS and pension payments.)
If you mom has no assets, I would think bankruptcy is the answer...but..besure you have legal POA before thinking of going that way.
Otherwise....once the account is in default...then sold...new creditor will get a judgement and proceed to put liens on any and all unprotected assets.
I’m more thinking about your BF mom situation in the near future. If she has Parkinson’s there is the very strong likelihood that if she gets dementia she will get Lewy body dementia. If so she’d need 24/7 oversight. If you & BF cannot take her into your home, then she will need a facility. And if she has no assets, this means she applies for Medicaid to pay for the facility.
LTC Medicaid in a Facility requires residents to do a copay or SOC (share of cost) of basically all monthly income (like her SS$) to the Facility. If she still has debt at that time, she’s gonna default on all those debts as well. To me it would be well worth meeting with an elder law firm to find out what the best options are for her. Plus she can update her paperwork if it doesn’t include you access due to HIPPA.
As an aside on 1099-c’s, for those on Medicaid getting 1099-c means they likely need to file a 1040 and a 982 to hopefully zero out their taxes. So that they are not subject to the IRS - as a super creditor-attaching their SS income to settle taxes owed. They must do the copay to the facility to be compliant for Medicaid, so if IRS seizes some of thier 8ncime it’s a problem with Medicaid.
Your Office of Aging may have a financial advisor. If LO has been late with payments there r charges. Only making payments there r finance charges. You may want to see if they are willing to offset some of these charge. to bring the total down. The card can be put on hold. Maybe a payment plan can be set up till she pays it off. Same with a loan if she hascextra charges. Be aware that paying the minimum get you nowhere. It pays little to the principle.
My thought for Thay90 is that if her BF mom sees a elder law atty, then his mom updates all her paperwork. Like dpoa. Mpoa, will / codicil, advance directive, HIPPA access, etc while in the law office....... Thay90 isn’t a daughter, or daughter in law, she’s a girlfriend of the elders son and they don’t live with his mom. So not even same address. If something were to happen to his mom, like a trip to the ER or a severe fall, she’s not family; she can’t get info or put in suggestions.... Or if his mom needs her to help negotiate or speak to creditors, utility company, etc. Thay90 has no legal standing for his mom & may not have any to BF as well depending on how their state does “partner”. Atty could do paperwork to change this to some degree.
It’s going to be supremely frustrating to be attempting to help “mom” on something that needs to be done like yesterday and Thay90 can’t.
As an aside on this, for dealing with my mom’s electric utility, they needed a copy of my dpoa and a notarized affavadavit of who I was for me to do anything. Just being daughter with dpoa not enough....