Please Help - Bipolar mom ruined her finances!

[ivinsfan]

In the tough love vein, I would go to social services in the county she lives in, and dump the whole mess in their laps.



That's what they are there for. They will figure out the money ins and outs and get her taken care of. I wouldn't bother going to a lawyer. Your Mother is most certainly a vulnerable adult as as such will need government help.

 

[Amethyst]

This can vary by state and situation...oh wait, I see someone else has noted this as well.

Some attorneys offer 30-minute free introductory consultations. This would be a great question for such.

Your Mom is not bankrupt because she could sell her house and pay off her debts, so I would not bother consulting a bankruptcy attorney.

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[Hermit]

In the tough love vein, I would go to social services in the county she lives in, and dump the whole mess in their laps.



That's what they are there for. They will figure out the money ins and outs and get her taken care of. I wouldn't bother going to a lawyer. Your Mother is most certainly a vulnerable adult as as such will need government help.

In my late freind's wife's case, a lawyer was well worth the costs to help her navigate the county/state bureaucracy. The government people were there to make sure all the boxes were checked. They were good at kicking the paperwork back if it was not OK. The lawyer was good at weeding out unnecessary information that made the box checker's job harder and making sure the correct forms were filled out. Medicare did pay for a good portion of his care facility debts, which kept his wife solvent. You may be able to navigate the local bureaucracy. You may not be able to find a good lawyer. You will have to decide the path to follow. I think it would be worth while to determine if getting the government involved would be a good path to follow. In my state, the state has a web site that does a good job of explaining the the available benefits are and if your mother might qualify.

 

[ivinsfan]

Good points Hermit. In this case there's no surviving spouse to worry about which makes a big difference. The spendown of assets will go to zero. Mom has no savings and no money to pay a lawyer. Should her kids pay for a lawyer? I don't know..

 

[Gumby]

Thanks for the detail.

So it sounds like someone may file for bankruptcy when they are merely insolvent. I understand that one of the main points of filing for bankruptcy is that it stops collection efforts by debtors (which is a good feature IMHO).

However, I thought that the process after that point was to then actually determine if the person could, if given time and space to do so, pay their debts/bills. If not, then they would actually be bankrupt and could wipe away most of their debts and start over - I think that's a chapter 7 bankruptcy. If so, they'd be shifted to another type of bankruptcy (chapter 13?) where they'd be put on payment plans.

It is also my understanding that if a person wants to keep their house, they would need to / get to keep their mortgage(s). The homestead laws around bankruptcy do not mean, as far as I know, that you can just wipe away your mortgage and keep your house.

So in the OP's case, they could pay a few grand to a bankruptcy attorney to go through a legal process to end up in a place where they still have the home, the mortgage, the IRS debt, and possibly payment plans on the rest, or maybe those get wiped away if they manage to stay in chapter 7. Or, they could not file bankruptcy and set up payment plans. I guess if I were in that situation I'd probably not pay the few grand to do a bankruptcy over $50K, but not having been in OP's shoes I can see how it might be different from the inside looking out.

I'd like to add that I wouldn't even be concerned about the credit impacts nor any societal judgment. It just seems like OP's Mom would end up in essentially the same place after a lot more effort and expense.

I also tend to think that if I go to a bankruptcy attorney and ask them if I should file bankruptcy, they're going to be honest but probably biased towards bankruptcy in edge cases because it's their livelihood.

If she keeps the home, she keeps the mortgage debt. Some debt to the IRS can be discharged, but not all of it. Generally, taxes for the three taxable years prior to the filing cannot be discharged. See 11 U.S.C. Sec. 523(a)(1)(A) and 507(a)(8).

Your analysis is sound. It sounds like she is judgment proof right now. Unsecured creditors cannot go after the house due to the homestead exemption and, except in limited circumstances, social security cannot be garnished. https://www.ssa.gov/OP_Home/handboo...y unpaid,to Court Ordered Victims Restitution.

 

[Scrapr]

If her physical and mental health continue to decline it’s unlikely she is going to be able to live in her home by herself. She may either need to move in with you or to an assisted living facility, at which point you could sell her home and use it to pay off some of the debts.

It is better to get into an Assisted Living place before you are destitute. At that point the options narrow & typically aren't good. If you can private pay for even a little then Medicare can kick in & the facility is happy with that. This allows you some time to look at several AL places & not just the ones that have an opening. Some have wait lists

There also (in our area) are Senior Foster homes. About 2-5 seniors living in a home. The owner/manager looks after them with meals & help. They are much cheaper than the full assisted living homes.

 

[Goldendoodlebug]

My brother-in-law had a stroke. While in the hospital he was asked about his monthly income, not his assets. He owns several properties, but had almost no monthly income. The hospital was not for profit and they did not charge him anything for his stay.
Speak with the billing dept of the hospital, they may waive her bill.

Good luck with your Mom. I’ve worked with people who have bi-polar disease. It can be very difficult.

 

[Walt34]

I will also echo the advice to contact an elder law attorney. Not just a bankruptcy attorney, they are not the same thing. When we were dealing with FIL's issues the elder law attorney knew of a lot of options that we had no idea even existed. Right now you are "flailing about in the dark" because you don't even know what your options are, and they vary widely by state. If your mother lives in a different state of course you need to be talking with an attorney in that state.

You cannot formulate a plan to help your mother if you don't even know what your options are. Attorneys often get a bad rap (sometimes deservedly so) but you're in a game that you don't know the rules for. An elder law attorney does so you need his or her help. We and many others on this board have found the elder law attorney to be well worth every nickel of their fee.

Edit to add:

You can save some money by being willing to do the legwork that an attorney would have staff do if you are able and have the time. We did some of that since we were retired.

 

[Buckeye]

It is better to get into an Assisted Living place before you are destitute. At that point the options narrow & typically aren't good. If you can private pay for even a little then Medicare can kick in & the facility is happy with that. This allows you some time to look at several AL places & not just the ones that have an opening. Some have wait lists

There also (in our area) are Senior Foster homes. About 2-5 seniors living in a home. The owner/manager looks after them with meals & help. They are much cheaper than the full assisted living homes.

I don't believe Medicaid will pay for Assisted Living. Nursing home, yes. Assisted living, no.

 

[Scrapr]

I don't believe Medicaid will pay for Assisted Living. Nursing home, yes. Assisted living, no.

This article indicates that it may pay for some services. In our experience with parents in AL you kind of needed to be a full pay patient for a while. Then if you ran out of funds the AL home would (generally) take the Medicaid as full payment. At least that was the scuttlebut in the hallways. Our parents had enough funds that their Social Security & their funds covered the cost. And with Medicaid you probably have to spend down to the minimum levels


https://www.agingcare.com/articles/medicaid-assisted-living-155740.htm

 

[RetireeRobert]

I don't believe Medicaid will pay for Assisted Living. Nursing home, yes. Assisted living, no.

I believe Medicare does not pay for assisted living while it does pay for nursing care for limited time.

Medicaid is a separate government program for poverty level folks.

 

[Teacher Terry]

As a former social worker most likely you can’t just dump this mess on the government and you don’t want to because being a ward of the state is horrible. For the county to take control she would have to be very incompetent. In addition she would just be a problem that needed to be solved and may end up in a crappy living situation. I volunteered to be the guardian for a friend with Alzheimer’s because I knew what would happen if I didn’t. Getting assistance from a social worker in the department of aging would be helpful for you and her.

 

[ivinsfan]

As a former social worker most likely you can’t just dump this mess on the government and you don’t want to because being a ward of the state is horrible. For the county to take control she would have to be very incompetent. In addition she would just be a problem that needed to be solved and may end up in a crappy living situation. I volunteered to be the guardian for a friend with Alzheimer’s because I knew what would happen if I didn’t. Getting assistance from a social worker in the department of aging would be helpful for you and her.

Is there a difference between the department of aging and a county social worker who helps the aged.? The social worker that helped my MIL, was nothing but helpful and professional to all of us. I said the OP should get guidance from the government professionals who do this for a living.

 

[Amethyst]

TT, I'm confused. The county is government. Are you telling OP, just get advice from the county, but then go to court and get guardianship himself? Because given OP's poor mom has lost most of her mental capacity, that seems to me where this is leading.

As a former social worker most likely you can’t just dump this mess on the government ....Getting assistance from a social worker in the department of aging would be helpful for you and her.

 

[pb4uski]

I just have a POA. Thank you and everyone else for the great info. I appreciate all the help!

You want more because with a POA there is nothing to prevent her from doing more damage to her finances... another remodel or whatever. It is better to ask that you be appointed as her guardian as that takes her out of the equation and puts you in the driver's seat.

 

[daylatedollarshort]

You want more because with a POA there is nothing to prevent her from doing more damage to her finances... another remodel or whatever. It is better to ask that you be appointed as her guardian as that takes her out of the equation and puts you in the driver's seat.

+1. We live in an area with many older residents and some shady contractors seem to work the neighborhood and prey on them. We've had contractors tell us perfectly fine trees were dead and need to be removed (they did convince one of our elderly neighbors to do that), we had termites in areas made of cement (cement termites?), and that we needed $20K of some kind of weird facing work due to water damage to the exterior of our home where no damage existed.

 

[Brat]

Seek the advice of an attorney specializing in elder issues. Discuss obtaining guardianship and conservatorship. That attorney may also be able to advise you as to how best to preserve her home. Because of her mental illness, this may not be the last time she needs help.

 

[ivinsfan]

From personal experience with an in law. Many states have free help for all these matters. The in law was mentally ill and a substance abuser, hadn't filed a 1040 in well over 15 years, had no HI...the state took him by hand and started to help him fix all these problems. Sadly he died before this could happen.



OP look for this before you give money that your Mom doesn't have to a lawyer.



It feels like her house is on fire and the first thing people say is call a lawyer to protect yourself when the lawyer can't do anything but refer you to someone else.


House worth at most 160K before selling fees, debt of at least 110 that the OP knows about. 1200 a month coming in...Mom incapable of even the basics of self care...

 

[Teacher Terry]

Sorry that my post was confusing. Getting advice from a social worker in the area of aging is great but don’t let your mom become a ward of the state. You want to have guardianship. Each state has social workers for the aged. Some are employees of the state and some the county depending where you live.

 

[Music Lover]

This isn't of any help to the OP, but his comment that his Mom's $15K roof was vastly overpriced is no longer true. With the recent run-up in lumber costs, all estimates to re-roof my (quite small) house have exceeded that.

Good quality architectural shingles around here are the same price as last year...about $1 per square foot. They haven't been affected by the increase in lumber prices.

 

[Bamaman]

You have said how your mom is mentally, but how is she doing physically? We once had a senile great aunt living 10+ years in a nursing home because her body was relatively good and she was well fed. What's her long term physical prognosis?

You really need to consult an elder attorney about your situation. In our state, probate court approves guardianship/conservatorship when someone doesn't have the mental facilities to make proper decisions.

I would be looking to liquidate the real estate and negotiate a settlement with the IRS. Cut up any credit cards. Tell the bank and other creditors to charge off their balances. And put Mom into assisted living--using whatever money that's left to keep her there. After the money's gone, the assisted living can file for Medicaid to pay whatever they need to take care of her.

We too have run into the same situation, and my aunt told everyone we kidnapped her and brought her 100 miles from her home and stuck her in this terrible assisted living apartment. It was a plush environment, and she had the funds to take care of her needs until 99 3/4 years old. When it was said and done, Auntie actually enjoyed her last 10 years with us kidnappers taking care of her.

 

[Amethyst]

Shingles, slates, tiles, etc. are the decoration, not the roof. The roof is plywood; its price, as we have discussed, has greatly increased. As have labor costs.

A single repair to our roof (leaking where the house adjoins the garage - a new copper "cricket" and plywood, but they were able to reuse the existing tiles) cost $3,000.00 for one and a half day's work.

Good quality architectural shingles around here are the same price as last year...about $1 per square foot. They haven't been affected by the increase in lumber prices.

 

[EastWest Gal]

You have said how your mom is mentally, but how is she doing physically? We once had a senile great aunt living 10+ years in a nursing home because her body was relatively good and she was well fed. What's her long term physical prognosis?



You really need to consult an elder attorney about your situation. In our state, probate court approves guardianship/conservatorship when someone doesn't have the mental facilities to make proper decisions.



I would be looking to liquidate the real estate and negotiate a settlement with the IRS. Cut up any credit cards. Tell the bank and other creditors to charge off their balances. And put Mom into assisted living--using whatever money that's left to keep her there. After the money's gone, the assisted living can file for Medicaid to pay whatever they need to take care of her.



We too have run into the same situation, and my aunt told everyone we kidnapped her and brought her 100 miles from her home and stuck her in this terrible assisted living apartment. It was a plush environment, and she had the funds to take care of her needs until 99 3/4 years old. When it was said and done, Auntie actually enjoyed her last 10 years with us kidnappers taking care of her.

Medicaid never pays for assisted living. It only pays for a nursing home.

 

[Music Lover]

Shingles, slates, tiles, etc. are the decoration, not the roof. The roof is plywood; its price, as we have discussed, has greatly increased. As have labor costs.

Shingles, slate, and tiles are also the water barrier in addition to the decoration. Anyway, I was responding to someone else who said cost to redo their roof on a small house was in excess of $15,000...no indication was made that the sheathing had to be repaired or replaced. But even at $60 a sheet for OSB and replacing the entire roof, the material cost for a 1000 sq ft roof is around $2000. Add another $2000 for shingles, drip edge, water shield, nails, dump fees, etc., and that's $4000 or so. Call it $5000 to be safe. 4 competent roofers could replace the entire roof sheathing and shingle the house in 2 days earning $10,000.

A single repair to our roof (leaking where the house adjoins the garage - a new copper "cricket" and plywood, but they were able to reuse the existing tiles) cost $3,000.00 for one and a half day's work.

Roofers can make very good money. I saved $4000 by re-shingling my house and garage myself...that's a very good return for 2 days of work. My friend is a professional roofer and even a simple leak repair that takes 20 minutes is $300 - $500.

 

[Amethyst]

I was quoting my roofer! Ha ha, did you think I know how to do roofs?

Shingles, slate, and tiles are also the water barrier in addition to the decoration. .

You are fortunate to be able to save money with DIY.