Elder Law Answers
Should My Mother's Will Be Changed Now that My Brother Is in a Nursing Home?
My 92-year-old mother has a trust that divides her assets three ways (me, my brother, and my sister) when she dies. My bro...
Read moreShould My Mother Stop Paying Her Credit Card Debt Now that She Is in a Nursing Home and on Medicaid?
- July 28th, 2016
Q
My mother, who is now in a nursing home, has outstanding debt on her credit cards. Her only source of income is Social Security and a pension. Medicaid requires that this income go to the nursing home. What should she do about the credit cards? Should she stop paying them off?
A
Yes, stop paying the credit cards and let the credit card companies know why. Your mother is what is sometimes referred to as "judgment proof," meaning that even if the credit card companies successfully sued your mother, they couldn’t collect on their claim. You can’t get water from a stone. The credit card companies should write off the debt. They will likely send your mother 1099s since the debt forgiveness is considered taxable income to your mother. But my guess is that your mother’s income is so low that she will have little or no taxes to pay.
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Ron Landsman
Ron M. Landsman, P.A.
Ron M. Landsman has been practicing elder law since 1983, before it was known as elder law, originally with Landsman and Laster, Washington, D.C., then Landsman, Eakes and Laster, also in Arlington, VA, and since 1990 in his own practice in Montgomery County, Maryland. He has been among the most active members of the...
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Jean Galloway Ball is certified in Elder Law by the National Elder Law Foundation. She is a 1977 honors graduate of the National Law Center, George Washington University, and she did her undergraduate work at the University of California at Berkeley, graduating Phi Beta Kappa in 1971. She is admitted to practice in Vir...
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Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
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