He’s unable to travel back to U.S. right now due to covid and his medical issues and having financial problems. He’s having a hard time remembering also and can’t make expensive calls to his creditors and bank from Thailand. His debit card expired so for a couple months he couldn’t get any money out of his bank from there so he had to get the poa for me to help. Now I’m finding out he only gets 2080.00 a month and his credit card payments are about 900 a month leaving him with not enough money to live on. A lot of them were delinquent and are pulling large amounts of money out of his account or he’s getting several nsf charges from creditors trying to pull money out. I’ve called a few debt consolidation and credit counseling places and payment would still be close to 700 a month also he’s getting hit with late fees. After speaking with couple places they recommend closing his current bank account and opening a new one for him and just stop paying the creditors so he has enough to live on. They said they cannot garnish his ss or pension. He has no other assets or anything to sell or any other money put away. My brother and I have sent him money last couple months but I don’t really have it to help. Am I able to close his current bank account with a POA if he owes on a line of credit at same bank? I’ve tried faxing a copy of POA to some of his creditors so I can talk to them but getting the run around and hours on hold ect so it’s getting pretty time consuming and frustrating for me. Like I said he’s my step dad, my mom passed away like 20 years ago. I also would have to close his current account and open new one to get his ss put in it. Any advice?
Yours is a very sticky situation. Since you say he is perhaps having memory problems it is urgent that you try to get him home on some sort of medical exception for travel (if there is such a thing). Have you contacted the embassy in Thailand? Or a Thai church to find a pastor or someone to help him and communicate with you accurately and for someone to keep an eye on him?
Then, there's the financial stuff. Since it sounds like he is a candidate for Medicaid, I would have a discussion with an elder law attorney -- you or family should not be doing anything that would appear to be "gifting" him money as this could definitely delay or disqualify him from getting this govt aid. Your situation is honestly too complicated to crowdsource a complete answer. If I were you I'd call the embassy and talk to an EL attorney. I hope you can find solutions for this situation.
First, I would see if I could freeze his credit cards. Then he can no longer charge. I had read one time better to pay your taxes than Mortgage. You will more likely lose your home for non-payment of taxes than Non-payment of Mortgage.
I just read if you pay the minimum fee $1000 a month it will take 62 months to pay off ur debt and thats not using the credit card. And, when your debt is large that minimum fee covers very little of the principle. Getting credit cards to bring down the amount owed, effects your Taxes. That $200 Dad may save is now considered income and he will get a 1099 and have to add to his income for the year. He would be better getting a low interest loan and paying off the credit card. If he owes this much he probably is paying over 20% a year in interest. You could negotiate it down but the first time a payment is missed, the interest rate goes right back up. Depending on Dads age, he may just want to declare bankruptcy.
Is he a citizen of the US or here on a green card? He may want to stay where he is. You as children are not responsible for this debt. I hope you did not give the Credit Card Co. any of your personal info. If you did and they start harassing you tell them your are not responsible for the debt, Dad is out of the Country and to not call you again.
So sorry ur Dad has put himself and you in this mess. Credit Cards should only be used as a convenience. Paid off monthly.
This will stop all the penalties and usually the interest and it will stop all the nsf from auto withdrawals. It will close the accounts and that should happen, since he can not pay the bill, he shouldn't be charging money her can not repay.
Getting everything down to one bill will make it easier for you to manage his money.
The 200.00 he saves will NOT be considered income. It is not income, just payment reduction, huge difference.
He will be able to live on the remaining 1,300.00, especially if he is not in the US but, even if he is in the US he can live on 1,300.00 monthly income.
I would not deal with the creditors directly, hire the debt consolidation company and deal with it that way. That will be beyond helpful for you and all the stress his spending habits have created.
I would not give him any more of your money, he needs to live within his means. He is blessed to have you to help him.
I will caution you about one thing. If his SS comes automatically into an account THAT is not one you can close. SS doesn't allow you to switch his SS from one account to another without becoming his Representative Payee, and in Covid-19 era that is a whole other issue.
I really cannot imagine what you can do other than stopping payment on these credit cards altogether. Sadly this will increase that debt with interest and they may come after him in court. If he only has SS you are correct, they cannot get that. His credit would be ruined. In all honesty that is likely a GOOD THING.
I wish you a lot of luck. I think RealyReal's idea of debt consolidation is a good one, but POA is difficult to do anything with. I hope this was a Lawyer drawn document that is airtight. Every entity goes through POAs with a fine tooth comb.
But it has been discussed on this forum that if you work with the Credit Card companies themselves to get the debt lowered, the difference between the original amount and the lowered amount is taxable. It is considered income. So if Dad owed 10,000 and he got the amount thru the credit card co lowered to 8000, he will owe taxes on the difference of 2000. That's how I understood it.
So, no do not close the checking account because any money direct deposited by SS cannot be touched unless it is for a supercreditor ex. IRS, child support, student loans. As I stated, credit cards are unsecured debt and there are no protections.
Do you do debt consolidation? No, absolutely not. Before debt consolidation, do a bankruptcy but wait to discharge medical debt also. How old is the debt? Is the Line of Credit secured?
What JoAnn is speaking of concerns taxes and Medicaid eligibility. So, if a financial institution writes off debt, they issue you a 1099-C. At that point, you would fill out a form 982 to prove insolvency for the IRS and state authorities. It is complicated but not too bad.