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Steve Bucci, the Bankrate.com Debt AdviserYou won't inherit Mom's credit card debt

Dear Debt Adviser,
Hello. My mother is no longer able to take care of herself, she has no assets and very little money; she does, however, have about $30,000 in credit card debt, and she now lives with my wife and me. We take care of all her bills for her. If we cannot make payments for her due to our own debt, what can the banks do to my mom? She has nothing to take but her minimal Social Security. Do I become responsible? Can she file some type of bankruptcy? When she dies, she will leave nothing as she was a very generous person her entire life and really kept nothing for herself. What happens to the credit card debt if there is no estate? Thank you.
-- Jack

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Dear Jack,
First, let me say I sympathize with your situation. Living with a parent again is difficult in the best of circumstances, and you have the added stress of your mother's credit card debt. My experience is that older people (and I mean older than me, although there are fewer of them each year it seems) often have strong notions of what they should do about their debt. I suggest you have a discussion with her about it before pursuing any course of action.

However, quickly; no. You are not responsible for your mother's debt unless you are a joint cardholder on any of her accounts. The credit card companies will write off the debt at the time of her death if there is no estate from which to collect. Creditors may not garnish Social Security income in most cases, and I believe your mother's case would not qualify for garnishment; however, you may want to ask an attorney if you know one.

Now, for a plan of action. Do not put your own financial situation in jeopardy to pay your mother's debt.

My recommendation is: Have your mother or her attorney communicate with the creditors and let them know that your mother does not have any income to pay the balances. Although they won't like it, chances are they might just go ahead and write off the balances since they will have no productive legal recourse. They can bring legal action, but since her Social Security can't normally be attached, it will end up just costing the creditors more money with little return. If the debts were for medical bills, be sure to mention that when you contact the lenders. 

It goes without saying that her credit cards will be canceled (if that hasn't happened already). And that's only right, as she shouldn't continue to charge if she knows she can't pay the bill.

As for bankruptcy, that would work but it might not be necessary. I would save that option as a very last resort in case there are any creditors or third party debt purchasers who become harassing. She could file anyway, but the stress, time and money that would be involved is probably not worth it to your mother or you or her creditors without some strong motivation. The end result will be the same to the creditors but will be much worse on you and your mother.

I suspect that your mother's generous nature, which in itself is a good thing, has led to the high debt level that she now finds herself in. It's probably time to sit down with your mother and have a frank discussion about money and her lack thereof. Again, be sure her credit cards are canceled and make sure she doesn't accept any future offers of credit.

Clearly, you have inherited Mom's generosity by the way you are caring for her. But don't let that generous nature put you in financial trouble the way it did her. First, check to see whether you can claim your mother as a dependent and recoup some of the cost of caring for her through your taxes. And by no means should you accept any offers that would make you liable for any future debt, such as by becoming a co-signer or joint account holder.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Money Management International Financial Education Foundation and the author of "Credit Repair Kit for Dummies." Visit MMI for additional debt advice or to ask a question of the Debt Adviser go to the "Ask the Experts" page and select "debt" as the topic.

Bankrate.com's corrections policy -- Posted: Sept. 22, 2006
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