Should My Mother Stop Paying Her Credit Card Debt Now that She Is in a Nursing Home and on Medicaid?
My mother, who is now in a nursing home, has outstanding debt on her credit cards. Her only source of income is Social Sec...Read more
You could file for bankruptcy on your mother’s behalf, but I doubt that it’s necessary. Your mother is what is often referred to as “judgment proof,” meaning that even if she were successfully sued, her creditors wouldn’t get anything. I’d either write or call the credit card companies and let them know the circumstances. They may write off the debts and then send your mother 1099s. The written-off debts will be considered taxable income for your mother, but I’d assume, given her circumstances, that she’ll have to pay little or no taxes on this income.