Steps to take to relieve elderly mom of credit card debt

What to do to get a fixed-income parent's debt under control

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, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question for the expert Dear To Her Credit,
My mom is 73 years old. She lives with me now and her only income is her Social Security benefits.

Recently, the state of North Carolina took $200 out of my mom's bank account for back taxes. Can they do that? I thought only the IRS could touch disability or Social Security money.

I have also recently found out my mom owes $16,000 in credit card debt. She had actually been using it to help her fill the gap in her lack of income. What is the best way to handle this debt? She has been trying to send them $450 per month for the past two years. This is half of her income. She is getting absolutely nowhere and it is starting to be constantly on her mind and is affecting her physical and mental health.

Please advise. Thank you for your consideration.  -- Roberta

Answer for the expert Dear Roberta,
As you and your mother discovered, the IRS is not the only agency that can garnish Social Security payments for back taxes. Although you most often hear about the IRS dipping into bank accounts, states can do it as well, according to

It's up to you to make sure the state didn't take more than it should have, however. If the one-time $200 is the end of your mom's debt to the state of North Carolina, there may be no point trying to fight it. However, it's possible they intend to take $200 every month until her debt is cleared. In that case, she should seek legal help from the North Carolina Department of Labor to find out if the state overreached in taking that money from your mother's account.

The $16,000 in credit card debt is a bigger problem. A person in prime working years could hope to pay that off in a reasonable period of time. As a retired person with $900 per month in income, her chances of paying off that much debt from her current monthly income are not good.

She did spend the money, however. Unless we want credit card companies to stop extending credit to anyone over 65, it would be foolish to presume that being retired should automatically get someone off the hook. Here are some ways she might try to pay down her debt:

  • Perhaps she could sell something. Because she is living with you, I assume she has no real estate. She may have other things she can sell. In fact, if she just consolidated her household with yours, she may have everything from duplicate furniture to lawn care equipment she no longer needs. It could add up to a helpful sum if sold online or at a garage sale.
  • She might be able to work. I know someone almost 10 years older than your mom who tutors elementary students in reading, math and piano on a regular basis. It keeps her sharp and busy, and she gets a great deal of satisfaction from seeing her students' progress. Not all 73-year-olds are healthy enough to earn income, but many are. One good thing: Because your mom is past full retirement age, any income she earns will not reduce her Social Security benefits.
  • Your brothers and sisters, if you have any, may help. You're already saving your mom money by letting her live with you. Any siblings of yours should also feel some responsibility to help their mom with her living expenses. (If the debts had been from wild spending sprees, they could be forgiven for feeling differently.)

If she has exhausted all possible ways she could pay off the debts, she may be "collection proof" -- meaning the credit card companies cannot collect from her. I don't think she needs to go through the expense and trauma of bankruptcy for a debt of under $20,000. On the other hand, she can't just let it slide. That would only increase her stress levels -- and cause the debt to grow at a rapid rate! A credit counselor can sit down with her and look at her whole financial picture, however, and help her decide the best plan of action. I recommend finding a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

See related: When elderly parents abuse credit cards, How to control edlerly dad's financial blunders

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Updated: 11-22-2017