He has early stage Alzheimer's. We are trying to get him Medicaid eligible so he can stay at home and get services. He has nothing in his name but social security and a very small pension. He has been paying on these credit cards and has racked up unbelievable interest on these cards. He is making minimum payments. Am I responsible for his debt? They are not in my name. I don't want Medicaid to be denied because he lied to me about these debts. Thanks
When your husband passes, creditors will have first dibs on any money he has left. This includes money that is in joint accounts if I understand correctly. It would be wise to keep your money separate from his. Debt will not count against him if he has to apply for Medicaid, though you may not want to do anything to cancel the debt during this time. Some places will issue a 1099 when they cancel debt, so there can be large tax consequences.
Hope you can see your way through this. What did your husband charge? That will be a huge consideration. If it was groceries, utilities, etc., the debt may be considered household. If it was something just for him it would be his debt.
1. If sole proprietorship was declared as being owned jointly by you and husband or by him alone. This can be found on the tax returned filed with IRS on Schedule C or C-EZ. This paper has a block that will indicate whether he said it was jointly owned.
2. If you filed a joint tax return with federal and/or state taxing authorities, you could be held liable for some of the business debt if you are considered one of the owners of the business.
3. If a personal credit card that was also used for business purposes is the source of debt and it's a jointly held credit card, you may be liable for some of the debt.
You need to get the accountant who prepared the tax return and your elder attorney talking to each other. If your husband prepared return himself, you need to get a good accountant and/or tax attorney to work with your elder attorney. Once they sort out what the division of the business would be, your team should be able to determine if Medicaid application will be affected. In the least you will need help later telling the IRS that any debt written off is phantom income and that you don't owe taxes on it.
ftcenforcementrulesrulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text
Just read one section at a time. There are some specific practices that have to be followed, and doing so will help you. It's also helpful to know what debt collectors can and can't do.
I assume your name isn't joint with your husband's on the credit card, i.e., you don't share privileges and liability jointly?
Our Elder Atty has advised not paying even the minimum amts on the credit cards. He said to send him any letters that may come from the credit card companies. Very grateful he will handle this for us even w his fee. My husband's Alzheimer's may have started long before I realized it esp when it comes to financial errors w his business. I knew his business wasn't doing well the last couple of years but he kept telling me he was managing. I offered to help pay any bills as he was getting ready to retire. He did let me pay some but kept the rest hidden from me bc he was afraid to tell me. He figured he could pay those cards off gradually w his SS. Except the interest rates were unreal and it increased on all 3 cards very fast. He diverted the bills to a friend w me not knowing. The friend would either rip them up or give to him when they saw each other. My husband would do a phone call to the credit card company to pay on them monthly. Even his checking acct statements stopped coming in the mail to our house. I kept asking him why. He had changed the address on those too!!! So as much as his dementia has affected our lives, he knew enough to lie to me about all these debts. I finally went to bank w my POA paperwork and the bank filed it so I now have access to see his checking acct. he had numerous overdraft fees and insufficient funds!!! I hit the roof which of course had emotional affects at home. They almost cancelled his checking acct. I added a little money so he would have a balance. Now his direct dep of his SS and small pension will still be there and he has a positive balance.
Thanks so much to all of you for letting me vent. We are both seeing a psychologist.... Me for stress. he has seen one for years : depression, anxiety and OCD.
So grateful for his caregivers forum. Thanks again to all
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