Expert: Terry Leeders - 9/21/2010

Question
Mr. Leeders,

My mother recently suffered two strokes and will more than likely be in a personal care home for the long term, if not for the remainder of her life.

She is on SSDI and receives only $1587 per month.  She has NO assets; no savings, no property, nothing. However, she does have a large amount of unsecured debt via credit cards and medical bills.

Her monthly SSDI income goes directly to the personal care home leaving absolutely zero dollars leftover each month to pay any of her creditors.  As her POA, the creditors have been harassing me and have begun turning her accounts over to collection agencies.  One creditor even filed suit with a magistrate.

I have absolutely no idea what to do in this situation, but I assume that bankruptcy would be the only solution.

As her Power of Attorney, am I able to file for bankruptcy on her behalf?  Will I need to attend the mandatory counseling and other classes on her behalf even though I'm not the one who the debt belongs to?

From my understanding, it seems that filing for bankruptcy costs between $1k-$2500k including filing fees and attorney fees.  Do you have any advice or suggestions on how to minimize the cost of this seeing as how we're working with absolutely no money to begin with?

I appreciate any help that you could offer and I thank you in advance for your time.

Best Wishes,
A Very Stressed Son

Answer
Thanks for your question.
Your power of attorney will not be sufficient. You will need to obtain guardianship to be able to file and answer questions on her behalf.
You will need to get state court to grant this.

But yes, bankruptcy will clear out her consumer debt.  You would still need to complete the counseling for her, it's really simple.

You should shop around for the attorney you feel most comfortable working with, cheaper isn't always better!  Check with the better business bureau for recommendations.  Good luck!