My wife, unemployed and mentally ill, is being served for credit cards. Options?

Q: My wife had several credit cards that she was paying on when we were dating. She eventually became unable to work due to her mental illnesses and has been unemployed for over a year now. As a result, she was unable to make her credit card payments.  Today, she received a notification that she has a certified letter at the post office from “Court”. She is assuming that this is serving some lawsuit against her but the largest debt she had from any creditor was less than $2000. She is mentally unable to handle stress like this. She has not been able to work for over a year, has harmed herself in the recent past, and has no property or any money to speak of. What should we do in this situation? We have asked to have the letter redelivered tomorrow. (North Huntington, PA)

A: I am sorry for your situation. However, your wife’s unemployment or mental health will not be a defense to credit card debt. My advice is if she owes the money and you can afford it, pay the credit cards that haven’t sued her yet. Perhaps you can call and negotiate a lower payoff. As far as the one who has sent her mail, you need to take the papers to a lawyer for a consultation. If this mailing from the “Court” is a Civil Complaint, you need to answer it in 20 days or she could lose by default. The attorney may advise to pay it, or may assess whether she has a defense or not. Many credit card claims are defensible, for example, there is no contract or the original contract has not been properly assigned to the present creditor. If the credit card debts as a whole are not able to be satisfied at this time, you may want to talk to a Bankruptcy attorney.

Is my mom responsible for her credit card bill when going on Medicaid and in nursing care?

Q: Is my mother responsible for a credit card bill when she will be put into a nursing home in a couple of days? Medicaid will be taking her small SS and retirement to pay for the home. She will have absolutely no money to pay for the credit card balance. She has absolutely no assets and the card is in her name only. Can she just inform the company and let the balance go?

A: Basically. Yes, if what you are saying is correct her money will be spent down to the level permitted in her personal care account at the nursing home, under Medicaid regulations. They can sue her but won’t collect because she is indigent and her personal care account is a protected asset. They can bring a claim against her estate when she dies but their claim would be behind, Medicaid, and others. It is likely that there will be no estate when she dies. If for some reason there is money remaining when she dies, Medicaid and other priority claims take their share, for example, for taxes, administrator fees, lawyer’s fees. I would inform the credit card company of the situation and send them any paperwork if they ask. If they keep pestering you, change your phone number. Sometimes, these big credit card companies just don’t get it and spend thousands of dollars pursuing claims against people who are penniless or who have even been dead for years.