Card debt payment options for elderly relatives with dementia

Seeking legal advice or credit counseling first is key

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

Ask a question.
Question

Dear Credit Guy
My mother is 84 years old and has dementia. She has a credit card debt that went into default around 2015.

At that time, my mother had written three emails to her doctor regarding her memory. I have copies of these emails. She also has three documents from two doctors stating that she has dementia and is unable to manage her affairs.

I am working with the credit card company to arrange reasonable monthly payments. I read somewhere that if a person is unable to pay a debt due to certain situations, such as mental impairment, away at war, or in prison, the debt can be placed on hold.

As a disabled 84-year-old person, what are my mother’s rights? – Michael

Answer

Dear Michael,
I am so sorry that you and your mother are going through this. Dementia is bad enough, but adding credit card debt in default makes things worse.

As for your mother’s rights in dealing with this card debt, I am not an attorney and cannot give you legal advice. It may be time for you to contact an attorney to discuss your best course of action.

Depending on your mother’s financial situation, there’s a chance she may be declared “judgment proof,” which means her creditors may have no legal recourse to collect a debt from her should she decide to stop making payments. But you should seek legal advice before making any decision regarding her card debt.

The emails you mention will be something to share with whomever you reach out to for legal advice, especially if you do not have a power of attorney for your mother at this time.

Erase credit card debt now, if you can

I can tell you that putting the debt on hold as you suggest won’t do much except put off the problem.

The debt probably won’t go away as long as your mother is living. People can live a very long time with dementia and your mother could be facing several more years of collection efforts if you don’t resolve this debt issue now.

The risk of restarting the clock on old card debt

You say the card went into default around 2015. It may be that your call to the credit card company to arrange for payment has restarted the clock on the statute of limitations for your mother’s credit card debt.

Depending on where your mother lives, this is usually between three to 10 years. Once her state’s statute of limitations has been reached, the debt will become time-barred. This means a creditor can no longer get a court judgment forcing payment on the debt.

But, as I have stated in previous columns, just because your mother cannot be sued for the debt once the statute of limitations is reached does not mean that the debt is not still owed. So, I applaud you on your efforts to work with the credit card company to work out payment arrangements.

Hardship programs to pay credit card debt

Be sure to ask the credit card company about programs for people in your mother’s situation. Most creditors offer hardship programs that will reduce both the interest rate and the minimum payment requirement.

If you were not offered something like that for your mother’s account when you called, call again and ask about the card issuer’s hardship programs.

Unfortunately, the creditor hardship programs are often for a limited time period, but you have other options to deal with your mother’s credit card debt.

Debt management plan: Another option to pay off card debt

You also can contact a certified, nonprofit credit counseling agency for help with your mother’s debt. When picking a credit counselor, make sure the credit counseling agency is a member of a national organization such as the National Federation for Credit Counseling or the Financial Counseling Association of America.

debt management plan offered by a credit counseling agency is designed to pay off the debt in five years or less. Any concessions offered regarding payments and interest rates will remain in place until the debt is paid off.

All of that said, these options mostly apply to cardholders who are able to manage their debt obligations by themselves.

Given the age and health of your mother, I’m sure an attorney or a counselor will be able to offer you an option that will help both of you take care of her card debt without draining her finances at this stage of her life.

Take care of your credit!

See related: Protecting the elderly from credit card collectors, 5 tips for taking to elderly parents about credit card debt

Meet CreditCards.com's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.




 

 



Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


Updated: 05-25-2018