Hardship Discharge Possible??

[help1234]

Hi all, This forum was a great help to me when we filed for a 7 3+ years ago. Now I have a situation and would like some advise. My mom (76) recently went into a nursing home for dementia and I am applying for Medicaid for her. After she was admitted and I was going thru paperwork I discovered that she had filed for a chapter 13 2 years ago.

Her payments are low, $100 and she is 24 months into a 36 month plan. Medicaid will only allow her to keep $60 per month for incidentals. I have talked to her attorney and he does not think the trustee and/or judge will grant a hardship dismissal. What can the creditors do if we simply stop paying and it is dismissed for nonpayment?
Thanks

[justbroke]

If you stop paying, the case would be dismissed for non-payment. Did your attorney give you "specifics" as to why a hardship discharge would not be granted? As in, "the code does not provide for a discharge simply because you have a medical condition." I would want something more specific such as there is nothing under 11 USC 1328(b) that would help this case, or a hardship would not work.

I really don't understand this case, now that i think about it, unless she was trying to protect property (vehicles, home). I suppose you could have the attorney seek to have the payments suspended (a forebearance) or talk about conversion to a Chapter 7. Again, it really depends on the details such as property!

[help1234]

I am also totally perplexed as to why a 13. The only property is a beat up trailer sitting on a couple of acres valued at $3000 and a car valued at $500. My worthless sister and nephew are the ones that talked her into it.

That being said... The attorney states the trustee and judge are really hardcore and do not allow hardship discharges. We (she) can't convert to a 7 because she can't appear for a 341. Her mental state has deteriorated so badly she often doesn't recognize family members.

I am trying to decide if I should keep up the payments for the next 12 months or just say to h--- with it... There is nothing for the creditors to get.

[AngelinaCat]

Do you have a 'Durable Family Power of Attorney'--not a simple Power of Attorney, but a Durable one? If so, that would empower you to stand in your mother's stead at a 341. A 'Durable FPA survives the incapacitation of the person who original signed it.

At least that is the way it worked for me. My Mother developed Alzheimer's and I had one of these for her. They had just come out in the mid 1980s, and I conducted her business, etc.

[help1234]

Thanks AC. I do have a durable poa. One of the problems is that she is in Louisiana and I am in Washington, but that is workable. Her attorney has a copy of the poa and he said she would have to appear at the 341 if it converted to a 7. I don't have much faith in this attorney... Why does someone in their 70's with no assets go into a 13? Only income is social security.

[LadyInTheRed]

Are you certain she has no other assets? Are you sure the land isn't worth more than you think? Is it possible she filed a previous Chap 7 that was too recent to file another one? Ask her attorney why she filed Chap 13 before you decide what to do.

[AngelinaCat]

I am wondering that too! What is the motivation behind the sister and nephew talking Mom into a 13? Do they know something you don't?

[help1234]

These are all good questions. I was totally blindsided by this. Her attorney is out of the office this week and when I spoke with him last week I didn't ask all the correct questions.
My sister and her 2 adult sons have lived with mom for the last 15 years. She is not being forth coming with any information.
I think I am going to pull up the original filing on pacer. Maybe that will help to understand more.

Lady- I got the property value from the county offices when I was there last week. There has always been this illusion that the land was worth much more, but it is considered undeveloped.
Will let you know if this mystery ever gets solved.

[karm43]

They allow a housing allowance which they should have figured when they did her income. Also she may have to sell everything, creditors get paid first and the rest would go to nursing home. If they think she is short term then whoever is taking care of her house will get her housing allowance to pay her bills.

[LadyInTheRed]

Yes, find her case on Pacer. That might help answer some questions.