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Dad in hospital; son needs to make decisions regarding sale of house, etc.

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#1
INDIANA

Complicated situation. I realize a full solution won’t be found here, but looking for guidance on best place to start to handle what is to come.

(Posting in bankruptcy because I see that as one option. Open to other suggestions.)

Son in law’s dad (age 59) admitted to ER on June 1, 2018. Initially diagnosed as having had three small strokes and pneumonia. Pneumonia diagnosis changed to Stage 4 Non-Hodgkin’s Lymphoma, for which he is now receiving chemotherapy. (He’s four treatments in to a six treatment regimen, over a 4.5 month period.) Beginning stages of dementia. Also has recurrent/resistant Clostridium difficile (c. diff). Has been HIV-positive for 20+ years.

After about 15 days in the hospital, dad was transferred from regular hospital to rehabilitation hospital where he remains today. In isolation since admittance due to c. diff.

Son in law is 27 years old - only child - parents divorced/separated in 1999. Dad raised him. I am involved because son in law is in the Army - active duty NCO - and he and my daughter live five hours away. I have been tasked with collecting mail, taking inventory of the financial situation, participating in weekly “care status” calls when son in law is unavailable, communicating with hospital director when there are care issues. I also visit dad weekly, take him provisions (soda, tea, snacks) and recently arranged for a dorm-sized refrigerator to be delivered (had to get permission from executive director because it’s normally not allowed) so I can also take home-cooked food for reheating because dad complains a lot about the food.

Prior to June 1, dad was experiencing various health problems. When his health started failing, son was in Afghanistan; wasn’t aware of severity of health/financial issues. Dad was terminated from job sometime around 11/2017.

Dad did not have insurance upon his arrival at the hospital, but the social worker was alerted and Dad was enrolled in Medicaid which is paying for medical expenses.

Son in law has signed POA. Dad owns home with approximately $35,000 equity. (Perhaps a bit more depending on payoff amount.) Dad has borrowed around $5,000 from son in law. Utilities are all overdue. Car insurance has lapsed. Life insurance premium is due.

Dad owes about $50,000 in unsecured credit card debt - (at least) seven different accounts. There is also a car loan but unsure of amount - probably hefty. All accounts are accruing interest/penalties due to no payments being made. Tax warrant from state has been issued for $750.

Dad cashed in 401(k) months ago to survive and has no savings.

Appraisal done on house a couple of weeks ago. Houses in our market are selling quickly and at top dollar. Due to condition of house (sinking foundation in one area and need for a new roof), appraisal amount was based on contractor purchase. Son in law is having difficulty finding out payoff amount on mortgage because it has been “transferred to an attorney for either collection or to begin foreclosure.”

Plan is to sell dad’s house and move dad to son in law’s home. Dad is on board with the plan.

(The issue of moving dad is complicated by the fact that dad has Medicaid in our state. Don’t know if he will qualify in son in law’s state of residence. Son in law can add dad as dependent, but for health insurance purposes, military will consider dad a secondary dependent and insurance benefits are extremely limited.)

Dad started application for SSDI prior to hospitalization. Denied benefits. At son in law's request, I spoke with SSDI attorney; he said to appeal the denial and wait for next decision. Followed his instructions and notified Social Security of his current situation but have heard nothing back yet.

According to radiologist, chemotherapy has been effective. As of last scan, 90% of tumors are gone and lymph glands are now of normal size. However, as long as dad remains c. diff positive, he will not be going anywhere. He is also receiving physical and occuptional therapy to help rebuild strength.

Where to start? Should credit card companies be notified of dad’s situation? Utility companies? Upon sale of house, there will be money to pay off some debts, but not all. How do you choose which debts to pay off first? Will sale of house effect his status with Medicaid? Since mortgage company has transferred his account to an attorney, should he consider bankruptcy (soon) before trying to sell house?

To what kind of attorney would you recommend speaking? Realize this is not a DIY project but son in law is only available on weekends, which makes it difficult to meet with a local attorney.

Thank you for any guidance. Son in law is aware I am asking for guidance here.
 


#2
It's a complicated situation. I'm not a lawyer. I'll try to make helpful comments. If you act on my comments without the advice of an attorney you do so at your own risk.

Should credit card companies be notified of dad’s situation?
Couldn't hurt, but the reality is that the credit card companies won't care. All they'll see is the delinquent account and proceed automatically with whatever process they go through.

Utility companies?
Same as credit card companies. Though somebody should be paying those bills so power and water don't get shut off. To sell the house, you'll need to show the house and people will want the utilities on to check things out.

Upon sale of house, there will be money to pay off some debts, but not all. How do you choose which debts to pay off first?
You pay the ones that could have the most serious of consequences. Credit cards are not that. Paying anything on delinquent credit cards at $50k would be throwing money in the toilet since he may very well be judgment proof.

Will sale of house effect his status with Medicaid?
Yes.

Read this:

https://www.caring.com/questions/house-sale-medicaid-eligibility

I suggest trying to avoid selling the house. Try to bring the arrears current and get it out of foreclosure. Indiana exempts a home from attachment by creditors (except the mortgage company) up to $19,300 and has a wild card exemption of $10,200. Combining the two could save the house from creditors and continuing to own avoids losing the proceeds.

Since mortgage company has transferred his account to an attorney, should he consider bankruptcy (soon) before trying to sell house?
If I understand it correctly, bankruptcy doesn't save the house. It discharges the loan but the mortgage company is still entitled to the house.

To what kind of attorney would you recommend speaking?
An elder law attorney for starters.

Realize this is not a DIY project but son in law is only available on weekends, which makes it difficult to meet with a local attorney.
If his father is mentally competent, there's no reason he can't consult an attorney on his own. But if that's not possible, the son may need to file for conservatorship through the courts. I don't think a POA works for selling a house.

Meantime I suggest that the father execute a transfer on death deed in favor of his son so if he dies while all this is going on the house bypasses probate and immediately becomes the sons property and safe from creditors.

Verify all this with an attorney.
 
#3
Thank you, AdjusterJack. I am very appreciative of your thorough response. I will research the points you've mentioned above. I remembered today a good friend (a corporate attorney) is married to a former bankruptcy attorney. She has agreed to ask her husband to look over the situation. I don't believe father is legally incompetent; he wants/needs son to handle since he is confined to hospital, but as of late, father also wants to be in control. (I fear for son-in-law that "no good deed goes unpunished" and I would rather see father do as much as father can do to deal with his own affairs, but I have not [and will not] express an opinion because it is between them. I am only doing research at son in law's request to help simplify his life by finding out some answers to what seem to be logical questions.) Much appreciation.
 

HRZ

Senior Member
#5
You can probably convey a home with a durable POA especially if it recites the power to do so..BUT many a buyers title firm will balk if he is not available ...and if he dies midstream OUCH . I agree a TOD may help.

I also agree keep an eye on home as creditor resistant and perhaps not a counted asset for Medicaid purposes .

IF home is in the red...that may be different ....
 
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