Okay. My Mother In Law has severe Alzheimer’s. Her estate was swallowed up by the first institution she lived in, but when that ran out we had to get her on Medicaid and put her in a different institution. She is now technically destitute; her social security goes directly to the institution, her stocks and IRAs are depleted to nothing.
My husband has Power of Attorney, both financial and medical. He’s been paying off her credit card — over $20,000 balance — but we can’t do it anymore. We’ve heard a lot of conflicting information about our liability to the card. He’s an authorized signer (but not a co-owner as far as we know), and has the financial POA.
We’ve been told to let it default, but we don’t want my husband’s credit pinged. We know this can happen because he went bankrupt 15 years ago (before we were married) and they tried to make me pay his credit off because I was an authorized signer on his card.
Anyway, I’ve also heard that we should get Medicaid to write a letter with a statement about her financial situation and send that to the card to get them to go away. In this economy, we just can’t afford her card with its 23% interest and massive monthly payments.
Are we liable? Can we get out from under her debt?
You have no obligation to pay off the debt of your mother-in-law. It’s nice that you tried to help out but that’s it, just nice.
A better investment of funds at this point would be for her to go bankrupt and end these debts once and for all. Otherwise you can just stop paying those debts and then deal with the collections stuff they will throw at her, not you. Even if they sue your mother-in-law there is no downside in a suit since she has no assets in her estate to go after.
I know it feels wrong and hard to not pay but the fact is you are repaying a debt that is not your responsibility or liability. You are doing it because you want to, not because you have to.
The good news is that the debt stops with her. It is not inherited. I would suggest that you immediately take your husband off as an authorized user. There are no advantages for him to be on the card at this point. You have that option since he is not a co-signer.
As far as a creditor going after an authorized user, nice try, but unless the authorized user has actually used the card knowing the person could not pay or after their death, there is little the creditor can actually do.
You can write letters if you want but it does not absolve the debt. It is only informational.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.