Desperate Help Needed!

[Gunnyhwy]

[jal1129]

Well they don't exactly have "nothing" if they own a house. Its always a roll of the dice if cc will sue or not, or when, but since they own a house I would guess its very likely that they will get sued somewhere down the road if they stop paying.

edited to say: because even if your parents don't have the money to pay, the cc can have a lien put on the house if they win a judgement and you would have to research state laws but in some states can even force a sale.

[Gunnyhwy]

Equity

Yes they own the house but we've calculated through a realtor that if they did attempt to sell it they would most likely break even or possible even lose money. Their mortage is basically equal to what the house is worth. It is need of some major repairs, roof, deck, concrete driveway, and other misc items. Like I stated in my first post their home is their only asset. They have nothing otherwise.

[SinkingFast]

Here's a link to Kansas BK Exemptions:

http://www.kansasbankruptcylaw.com/exemptions.html

Generally speaking, Creditors don't just go after people without knowing what their chances of recovery are. They'll pull your folk's Credit looking to see who all they owe what to and if they're paying anyone else money. They'll check public records looking for property or assets (cars, boats, etc) to get a Lien against.

Your parent's Creditors could seek a Banking Institution Garnishment against them. That would allow a Creditor to clean out their Bank Acct even if KS Law expressly protects SSI and Retirement Income.

Banks see a Garnishment Order and they surrender the funds. It's happened to my Brother. He's on SSDI and a partial pension. The bank just handed over his money to a Creditor even tho the Law protects SSI/SSDI and Retirement Benefits from Garnishment. You'll wanna be sure your folks keep their bank acct balances at a minimum.

Creditors could try for Judgements to place Liens against their home and car if they own one. A Lien would have to be paid to convey a clean Title/Deed to a prospective buyer.

Any idea how much your Father mortgaged against the house?? A Lien, or multiple Liens, could leave your Mom in a world of hurt should he pass before her.

[lrprn]

We do have the power of attorney now but were told that that they would have to agree to do this on their own accord.

Which Power of Attorney do you have - durable, non-durable, or springing? Can you make decisions for health care, to sign financial documents, or both? Is it for both parents or just your dad?

My question is: Due to the fact that my parents have nothing will the creditors just write their losses off and forget about them or will they eventually attempt to take them to court? FYI. They live in Kansas

Given that they own a house, even if it does have very little equity, my guess is that the mortgage owner will eventually take them to court to start foreclosure proceedings if the mortgage payments get behind more than two months. Depending on the strength of the housing market where your parents live, the mortgage company (especially if it is a credit union) could decide that getting some of their money back is better than getting none. Or they could decide to do nothing - unfortunately there's no reliable way to know. It's doubtful the credit cards will be able to do anything. Your parents' retirement and Social Security are exempt from garnishment and seizure. They will most likely write off that debt.

Where in KS do your parents live? There are several excellent Alzheimers and other elder specialty clinics in Kansas City and Wichita (KU Med Center), Topeka (Menningers), and other larger KS cities who specialize helping with situations like you are dealing with now. If you haven't done so already, it would be well worth getting a consultation for your dad with a gerontologist (a doctor who specializes in treating the elderly with their unique problems). These specialists are also well aware of many community and government resources who can help you sort out potential solutions for both your parents' financial and health issues. Don't feel like you have to go it alone. There could be excellent financial and emotional support available for your parents and for all of you if you know how to tap into it. Here's the link to the Alzheimers Association/Heart of America chapter - http://www.alz-heartofamerica.org/ . They have wonderful resources and can help you sort out options for your dad.

Hang in there - keep us posted on what happens with your parents and how you decide to proceed. You are in a very tough spot - come back to vent any time - that's why we're here.

[bige1030]

You are right - your parents probably have nothing that can be touched by creditors. They might waste their time taking them to court and trying to garnish their bank accounts and getting a useless judgment lien, but that's just about all they can do.

One thing that's great about Kansas is our exemption scheme. A homestead of up to 1 acre in the city or 160 acres of farming land is exempt from seizure by creditors. This exemption is unlimited in value. However, it does not apply to tax or PMSI (purchase money security interest) creditors. Also, one vehicle of up to $20,000 in value (or unlimited value if the vehicle is modified to accomodate a person with a disability) is exempt from creditors (again, except tax and PMSI creditors).

So it's pretty easy to have a house and a car in Kansas and essentially have nothing for your creditors.

Also, regarding the house, Kansas has judicial foreclosure - which means that all foreclosures must go through the courts. There's also a right to redeem for a limited time during foreclosure proceedings.