Parents Elderly And In Debt?
Julie's parents are in assisted living, have no money and lots of debt. She's not sure where to start.
QUESTION: Julie has power-of-attorney for her parents who are in an assisted living facility. They have no money, no assets and lots of debt. What can Julie do?
ANSWER: You need to tell them that if they ever borrow money again it is considered stealing because they have no way to pay back what they owe. You have to be willing to have that talk with them first and foremost. You also need to take their credit cards and close the accounts since you have power of attorney. You also need to explain your parents’ situation to all of these companies. Your parents are considered “judgment proof,” which means these credit companies aren’t going to be able to get any money from them. They can sue them or trash their credit, but it won’t matter because it is uncollectible debt. If you and your siblings want to get together to settle this debt in order to keep your parents’ name in good stead, you’ll probably be able to settle for a very small amount – probably pennies on the dollar. Just make sure you get the settlement in writing before you give them a dime.