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
I would start by contacting a medicaid advisor and ask how this debt can be paid off with out raising red flags.
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.
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?
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.
Bear in mind that his debt can become a lien on jointly owned property, such as your home or vehicle or joint bank accounts. Much depends on how the business is titled.
I've only taken a few courses in accounting, which is why I prefaced my remarks that I didn't know that much about business accounting.
I think you're right on the capitalization issue, probably small margins as well.
I, like you, have taken a few courses in it as well but far from a CPA.
But guess meant small margins as well, when said capitalization, really probably more so, because the caps would be assets more so than income, just point being business sounds like it was being run on credit.