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Senior Credit Card Debt? Bankruptcy or what?

My 80 yr old Mother just entered a Special Care Facility today, she is self pay using her pensions only and its all of it. She has however accumulated approx. $30k in credit card debt with 3 bank visas. She will be unable to pay them starting this month what should I as her POA do?

Posted from: New Brunswick

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One Response to “Senior Credit Card Debt? Bankruptcy or what?”

A licensed trustee said...

It has been a while since we’ve posted anything about pensioners, so here goes…

Pension income is protected under the law – that is, your mother’s pensions cannot be garnisheed or seized (unless she owes a government debt). I usually suggest that you send a letter to each of her creditors (actually the same letter to each creditor) setting out her situation and explaining that she will no longer be making any payments on her debts. In most cases the creditors will simply write the debts off. If they don’t and they decide to sue your mother there will not be able to take her pension income. Unless she has other assets or income she is what we call “creditor proof”.

Your mother may not be comfortable with the idea of “walking away” from her debts – in that case you may want to speak to a trustee about filing bankruptcy on her behalf. As her PoA you have the right to file for her, if you think it makes sense.