85-year-old mom has $25,000 in card debt

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear Sally,
My mother is 85 years old and cannot keep paying her expenses and current bills on her income.

She has the following debt: $25,000 in credit card debt, with a $550 minimum payment, a $214 lease for a car for her daughter, and $60 for furniture she bought for the house she lives in with her daughter. Her only income is $1,280 Social Security benefits. Somehow, she has managed to stay current on all payments so far.

My mother and my brother own a home out of state. My brother refuses to sell, so she can’t get her half of the equity out of the home. I know her Social Security benefits cannot be garnished if she defaults on her credit card payments. We are trying to determine what options she has.

She currently lives with her daughter (my sister), but unless she can contribute to the household, my sister, a single mother, will have to move into a smaller apartment. Then she will have no room for my mother.

Should she just default on the credit card balance, thus freeing up enough cash flow to contribute to my sister's budget? Or should she file for bankruptcy or choose some other option? Also if she defaults on the credit card debt, can they go after the house she owns with my brother?    – Torrey


Dear Torrey,
You seem very calm for someone whose siblings are putting your mother in an intolerable financial position. If I were in the same situation, I might be making my opinions known.

Because the car lease and the furniture bill are both connected to your sister, I’m assuming the $25,000 in credit card debt probably has something to do with her, too. So your sister puts your mom into debt, and your brother keeps her there by refusing to release her equity from the house. Instead of helping your mom at this time of her life, they’re causing her immeasurable stress and trouble. It sounds like they’d be willing to encourage her into bankruptcy, just so they can get more from her. If this isn’t elder abuse, it’s awfully close.

It’s important the family understands that filing for bankruptcy will not solve your mother’s problems. The leased car will be taken back, unless your mother affirms the lease and promises to keep making the payments. The furniture will be repossessed. The co-owned house, not being her primary residence, will be sold to pay bills. Your mother will pay thousands of dollars in filing and other fees, and she’ll end up paying her bills anyway.

If she stops making credit card payments, she’ll see the balance start to grow at an alarming rate. The interest rate goes up, and the late fees pile on. The bank starts sending notices and even calling her. Would anyone really wish that on their mom? Simply not paying the bills is not a good option.

The only responsible path forward is for your brother and sister to stop depending on your mom for financial assistance. She can’t afford it. Your brother will have to either refinance the house and buy out your mom, or sell it and give her the equity that belongs to her.

Your sister needs to give up the leased car. If she helped spend on your mom’s credit card, she should help pay it off, even if that means working overtime or a second job. With the equity from the house, hopefully your mom can pay off the rest of her debts and keep an emergency fund of her own, where no one else can touch it.

After her debts are paid, there’s nothing wrong with your mom contributing to your sister’s rent and other household expenses. However, your sister cannot be allowed to jeopardize your mom’s financial security and future by expecting her to go into debt on her behalf.

It won’t be easy to talk to your mom and tell her that she must stop being quite so helpful to your brother and sister. If you’ve always been the responsible one, she may think you don’t understand, or she may believe she can just keep giving and giving. You have to try, however. Your mom’s future is far too important for her to be used this way.

See related: Protecting yourself against elderly financial abuse, 8 ways seniors can ease student loan debt pain

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Updated: 01-20-2018