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Old 03-30-2015, 07:31 AM   #21
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Originally Posted by 2B View Post
Just not paying is probably the best route. One thing to watch out for is if there is a judgement against the father the CC company can't take the SS but they can take money from bank accounts. They are not supposed to take SS from bank accounts but they have been known to do this. If ot stopped, it will occur monthly. It can be prevented from recurring by talking with the bank and CC company (or collection agency).
Agree with not filing BK - really no point in giving money to an attorney to get protection that already exists. As far as garnishment against SS the bank (if garned) must protect two months worth of SS deposits; however if his account is at the same bank that he owes a debt to they could take the money under right of offset. As 2B said it can happen; there are some wierd little nuances to be aware of.
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Old 03-30-2015, 07:35 AM   #22
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Originally Posted by spncity View Post
Meant to add - if you are getting power of attorney papers signed and notarized, get more than one original. Some places require original POA paperwork. They say they will send it back, but it seems risky to mail your only original to a credit card company.......

Kindest regards.
Never-Ever-Ever send out the original. You can make a copy if necessary and get a medallion guarantee at your/his bank. The POA is needed to take control of any outstanding accounts. They may say they want the original but legally they can function with a medallion guaranteed copy.
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Old 03-30-2015, 08:55 AM   #23
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The house transfer could be considered a fraudulent conveyance depending on the timing and other things. Best thing for them to do is consult a local bankruptcy attorney to see what makes the most sense.
+1
A good friend became involved in this kind of transfer ( in his case gifts), with
serious and dire consequences. Cited here on this post:

Sharing 23 years of Frugal Retirement
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Old 03-30-2015, 09:41 AM   #24
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When someone's 80 years old and not in good mental health, who cares what the FICO score is.

Contact all the creditors and tell them the situation. Tell them he has no assets and that litlgation would be a waste of time--and they should charge off the debts. If they persist and get judgments against the gentleman, don't worry about it. If they happen to find an asset they can seize, then it's time to file bankruptcy.

And don't think debts are forgiven after death. Newspaper probate notices are to notify creditors of the death if they're owed money--and that they must file a claim. Hospitals go after estates everyday with their small armies of attorneys.
However likley in the case cited there won't be much of an estate. Note that funeral and estate administration expenses come first in the order of payment, then essentially unpaid taxes, then property taxes assessed, finally judgements entered in the order entered.
If the gentleman is in the state described, likley you won't get far past #1 in the order.
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Old 03-30-2015, 10:01 AM   #25
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I did not know a thing about my dad's finances until the day he died. I tried on a number of occasions to sit down with him and have a powwow. My dad was of the generation that didn't discuss finances with his kids.

He told me a number of times that he was "alright" and that if he needed help he would let me know. One year he purchase a brand new Cadillac, I asked him what the payments were and he simply replied, 'low enough for me to pay them"? it's my money.

what was I supposed to do?.

I know what your saying. My dad is near 80 and have only been able to piece it together indirectly over the past 4 years. I stayed up at his house a week a few years ago to paint the whole interior of house. When painting his pantry I was pulling out cases and cases of canned food. I asked why they had a years supply of food and he said food is so expensive you cant afford to eat unless you get it on sale... So now Im thinking Im painting his house for free and he says food is too expensive maybe he isn't in great shape.
I asked and he said they were hurting as they can barely save a $1000 a month anymore. So I kept poking away over next couple years and realize he has over a million in assets in accounts with everything paid off. But he thinks he is broke because he cant "save" anymore.



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Old 03-30-2015, 02:52 PM   #26
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Never-Ever-Ever send out the original. You can make a copy if necessary and get a medallion guarantee at your/his bank. The POA is needed to take control of any outstanding accounts. They may say they want the original but legally they can function with a medallion guaranteed copy.
It may depend on state law. When DW sold FIL's house the title insurance company wanted the original copy of the POA. Our response was "We'll check with the attorney" who said that was a rare exception to letting go of physical possession of the original. In our case there was a duplicate original but we didn't tell them that.

They did send it back with no issues but still, we didn't like it.
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Old 03-31-2015, 04:40 AM   #27
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.... told me a number of times that he was "alright" and that if he needed help he would let me know.<snip> ...it's my money.
Which is fine if a person is, in fact, alright.

The "it's-my-money-so-don't-tell-me-what-to-do" was heard from a formerly thrifty relative with imperceptible cognitive decline - as the lifetime savings was being sucked away by scammers in a variety of scams.

An experienced, compassionate interventionist was hired by the adult children to help the parent transition financial control. Yes, it was an actual intervention!

Kindest regards.
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Old 03-31-2015, 07:06 AM   #28
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Which is fine if a person is, in fact, alright.

The "it's-my-money-so-don't-tell-me-what-to-do" was heard from a formerly thrifty relative with imperceptible cognitive decline - as the lifetime savings was being sucked away by scammers in a variety of scams.

An experienced, compassionate interventionist was hired by the adult children to help the parent transition financial control. Yes, it was an actual intervention!

Kindest regards.
We had a similar situation with MIL. She never wanted anyone to pry into her finances but when we noticed she was spending excessively on gifts for her grandchildren her response when DW asked " I can't take it with me". Then when she had an extended stay in the hospital we retrieved messages on her answering machine regarding some overdue accounts. She also had 15K in CC bills and since she was only paying the minimum she was digging a much deeper hole.

We had to intervene and in exchange for helping to pay some of her bills she would let us oversee her finances.

To me this agreement was much cheaper financially than moving with us after losing her modest house which was her only asset.
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Old 03-31-2015, 07:07 AM   #29
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Are there free legal clinics in your area? I would recommend, at a minimum, describing your situation to one of their attorneys during the clinics office hours. You would want to know the downside risk in your state of what could happen if either he stops paying or files for BK.

Although I hate to see people not take responsibility for their actions, this does go two ways in my opinion. The credit card companies, with their databases and monitoring bureaus, have allowed the individual to rack up 80K in debt which appears to be entirely unaffordable based upon his income short of liquidating his residence.

If the CC companies do decide that the debt is noncollectable and choose not to pursue it further, they will be able to take a tax deduction in the full amount of the debt that is forgiven.

The individual, on the other hand, will be liable for taxes on the full amount of any debt forgiven and this would likely come all in one year thus pushing him into a high tax bracket! Also please keep in mind that the IRS has extended powers for collection beyond normal creditors such as garnishing a portion of SS payments each month as well as levying retirement accounts. I would want to know more about the risk of seizing the house that was recently transferred to the daughter.

You really need to get some professional advice on this (both legal and accounting) so you know what you are getting into whatever path you choose.

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Old 03-31-2015, 10:05 AM   #30
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gauss, good post!
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Old 03-31-2015, 12:05 PM   #31
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This is worth a "free" 1 hour consult with an attorney.

My 2 cents ... Credit cards are unsecured debt. The only thing at risk is his credit rating. Stop paying on them and change/disconnect his phone ... collections will be relentless.

Unrelated interesting debt story ... after a bitter divorce a friend found out her ex had put a 2nd AND 3rd mortgage on the house. Neither had been paid for quite a while. The house was no where near the value of the mortgages. She said "What should I do". I said "Consult with an attorney. But if I were you, I wouldn't pay. The notes are in HIS name and the lein holder won't foreclose because the value isn't there. Just understand, you'll never OWN this house ... you're paying rent to the first lein holder." That was 4 years ago. She and the kids are still in the house.
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Old 03-31-2015, 12:41 PM   #32
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Here is what I would do if I were the POA. First, I would assess whether the timing of the transfer of the home that Dad lives in to me might cause a problem and consult an attorney if necessary. In any case, take Dad's credit cards away and freeze his credit at the three credit reporting agencies so no further credit cards can be taken out (not that he would likely be granted credit anyway given his $80k of credit card debt). He can use either an ATM card or prepaid cards for daily spending needs.

If the timing of the transfer of the house is not likely to be a problem, then as POA I would call or write to the credit card provider and explain the situation with Dad and that there are no resources to pay and no further payments will be made. Then just ignore any further collection attempts (change Dad's phone number if necessary) and minimize the balance in any bank accounts in case the credit card company tries to claw anything out of the bank. Like someone said, they are not supposed to be able to garnish SS but administration is not always perfect.

If the timing of the home transfer is a problem, then negotiate hard to get them to make a substantial write-off and then settle as agreed. And obviously, the story is that Dad has no assets and income is only SS and if they can't come to a mutually agreeable settlement then Dad will file for bankruptcy. The threat of bankruptcy should incentivize them to settle.

What was the counseling service thinking in allotting the credit card company so much of his income?
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Old 03-31-2015, 11:10 PM   #33
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Thanks to all the great input from the pros here on ER! It's great food for thought. I'll be sending a link of this thread to my affected friends.
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Old 04-03-2015, 10:57 AM   #34
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If SS is comingled with other funds in an account it may be garnished. You might want to have the SS check deposited into a separate account in another bank.
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