My mother has dementia that is progressing quickly. We are anticipating having to place her where she can get the care she needs. When they review her finances and see that she took money out to pay those off will that be an issue to place her somewhere?
Really all this can get to be complex, using funds for a good elder law attorney and FA that understands how Medicaid works is very worthwhile.
Does mom have 200/300K to be able to private pay? Average NH stay is 2 years. Plus $ to fully pay off CC debt?
OR Does mom have a LTC policy that will pay for a facility & does she have the funds to pay NH once policy maximum is used? & fully pay off CC debt?
OR is family going to private pay for her care for the rest of her lifetime?
will mom or family pay the 20% copay for Medicare charges?
If the answers are "not really", then mom is likely to be applying for Medicaid to pay for her care & pay the gaps that medicare does not pay. Once on Medicaid, moms income will need to become her required copay or SOC (share of cost) to the facility. Mom will have no funds to pay her life insurance ( if she still has premiums); pay any costs on her home (if she still has a home); pay for dental, eyeglasses, hearing aids; funeral or burial policies. Mom will have only a small PNA - personal needs allowance - that varies by state from $35-105 a month. For my mom in TX it was $60 a mo & really just enough to pay for on site beauty salon & some clothing replacement. All other costs will need to be paid by family.
You may find that rather than paying off her CC (which is unsecured debt), it is a better use of limited funds to get a fully prepaid medicaid compliant funeral & burial policy; dental work; paying off in full any term life insurance policies; new eyeglasses (couple of pairs as these just walk in a NH); new hearing aids; a really nice walker or wheelchair as the ones on Medicaid are the most miminal; and a new more suitable wardrobe.( My moms once lovely wardrobe was pretty well gone within 6 mos of NH high heat wash & dry; really if I'd known I would have done a good bit of spend down on lots of sturdy fabric, easy care clothes & several pairs of shoes and just set them aside till needed.) If mom owns a home & it's going to be sold, then spending funds to make it market ready is a good use of funds as well. To me in my experience, it better to spend down on things that have a direct benefit for the elder rather than a CC company.
Really if $ are limited, take a realistic look at all this to decide where best spent. The CC will be relentless in trying to collect, but there is little they can do as its unsecured debt. Moms SS is fully protected from seizure or attachments by CC. Only super creditors (IRS) can touch SS income. It's not like mom is going to buy a car or needs a good credit score anymore. Good luck in all this as there are hard decisions to be made.
We love to have you keep us updated on how you are doing,
Carol
find one with experience with issues you face
which is more valuable to you cash on hand or paid off CC
It really all depends on how much money she has and where you place her.