Need a little advice for my mom.

[mom939409]

Hello!

I have some questions that I am hoping someone could answer. My father passed away 3 weeks ago and right now things are in a financial chaos. My mother is an authorized user on several cc (one has grown to 34k) and they are upside down on their house and also have a heloc (13k). My mother will be getting a small insurance policy and my father's ss and nothing else, she does not work due to health reasons. What I wanted to know is if my mother lets the house go into forclosure will they sue her once it is sold, I know they can't on the cc since she is authorized user, but not sure on the house and she will be paying off the heloc. They also owed the IRS and are paying on that, my main concern is that what little money my mother has won't be taken away from her and my parents have no other assets except the house. Would it be better for my sister to open an account and then add my mother later? Sorry for all the questions but like I said I want to make sure my mother is taken care and not have all this crap looming over her head and she lives in Florida. Thank you so much in advance for your help.

[Flyingifr]

Florida is not a Community property State so she is not responsible for any debts she did not sign her name to.

That said, even if she does owe the money, they can't touch her Social Security. The IRS can only take 15% of the Social Security. Mom sounds like she is Judgment Proof meaning they can sue her until the cows come home, and then wipe their butts with the judgments. That includes any deficiency on the house.

[Prosay]

Talk to an attorney and ask him to prepare a listing of your mom's "judgment exempt assets" under your state's bankruptcy laws. This would include personal and homestead asset exemptions. He will notarize it for you and you can then send a copy to each of the creditors addressed to their "bankruptcy department" This will put them on notice that even if a suit was filed against your mom, they won't get squat...waste of time and money. ( Note: you don't have to file bankruptcy to take advantage of these laws)

My attorney charged me $150.00 to prepare the list for me...vs charging me about $1500.00 to file bankruptcy.

Your attorney can explain all of this to you..

[madmader]

I was going to say, if your mom didn't sign any of these debts, then she is not responsible for them, except for the IRS....

My sister lost her husband last year, and he had two or three credit cards with 5 digit balances on, and they just "went away". My sister has never seen a bill since his death.

Also lost my grandfather last year as well. He and my grandmother were making payments on a car. My grandma can not drive, due to medical reasons. She never signed on the car loan, only my grandfather. When he passed, my grandmother called the bank and told them to come get the car, which they did, and as well, she hasn't received anything from that bank since.

[Hal Jordan]

I may not know the answers to all of your questions but I can tell you this. They won't be able to Garnish her Social Security Widow's benefits.

The only thing Social Security Garnishes benefits for is Child support, defaulted student loans and tax debt. So don't let the mortgage people scare her into thinking they can get her Social Security. With that said, they can attach themselves to any Bank accounts that she has and zap any money that comes into them or is already in them.

[Methuss]

With that said, they can attach themselves to any Bank accounts that she has and zap any money that comes into them or is already in them.

Banking rules that went into effect late last year require the financial institutions to not freeze any amount equal to the social security ACH deposits. (Social Security is phasing out checks and will only be doing deposits by ACH) She needs only to send a letter to the bank showing her SS benefits amount and then the bank is required to prevent that from being frozen or garnisheed.

The only part unclear about the new rules is unused portions of SS benefits each month. i.e. what happens if you spend only $500 of a $1000 benefit deposit that month...is the remaining $500 still exempt from freeze or does it become fair game when the next SS deposit hits? I haven't seen the answer from the Fed about that yet.

[Hal Jordan]

I did not know that about the new law. That is definitely handy information to have. And thank you for sharing that.

That's true about Social Security phasing out checks. Anyone who starts receiving benefits after March 1st of this year is required to either have direct deposit into one of their own bank accounts or use what is kin to a prepaid debit card called a direct express card.

However, for those already receiving benefits they have 3 more years before they "Have" to do DD or direct express (This rule does not apply to SSI).

[antiquedave]

Weren't some of the banks redoing mortgages that were under water to bring them in line with 20% under market value rather than having to foreclose on them? if she wants to keep the house there might be some options,

I was also told by my bankruptcy attorney that after 3 years there are some IRS judgments that can be extinguished, mine can't but some can apparently, she can always re-affirm on the house if they give her a good deal to stay in it.

C7 bankruptcy eliminates all the headaches, my mother did get some calls on my step dads credit cards but after a couple conversations with me it all stopped.

[mom939409]

Thank you all for your replies...my mother does not want to live in the house anymore (my father collapsed and died in the bathroom), so she is letting the house go...she is worried that the bank will take the insurance money if she forcloses..I told it would be awhile and told her to let the heloc go also. The life insurance is not very much and it will be going towards the IRS, a small trailer for her to live in and medical which will eat a HUGE portion of it...she will be getting my father's SS which will be about 1200 a month...but she has to pay taxes and once again medicines will eat a huge chunk of it..I did let her know that since she was only an authorized user that they cannot come after her...and if they try and tell her she has to pay she can tell them to pound sand. Thank you all again for your help!