What do I do about the nursing home bill my grandmother stayed in?

Stopdangerousdriver - SS and other retirement income CAN be garnished by the IRS as the IRS is a "super creditor". The original creditor - like a credit card co, or utility co or mortgage holder - cannot attach SS as it's protected income. BUT any creditor owed over $ 600 can write off the debt and issue a 1099-C Cancellation of Debt. 1099-C is taxable income reported to the IRS. Often an OC has a year of in-house collection process with interest and fees going atop the original debt so the 1099-C will be more than what you thought. It gets reported to IRS in January for the year before when the OC wrote it off their books. IRS can and will attach SS. Dealing with 1099-C is done by doing a 1040 and Form 982 and imo has to be done by a tax pro; not ever a DIY project. I'd allow $ 300 - 400 for them to be done.

For those on Medicaid in a NH, having the IRS attach their SS poses the problem that they cannot have the full amount required by Medicaid to be their co-pay to the NH each mo.
Medicaid requires their monthly income to be their co-pay each month less a smallish personal needs allowance. So it kinda has to be dealt with which tax filing & Form 982 does.

Also if your state does an IRS filing match up, all those 1099-C's show up as "income" which makes them ineligible as they will be over the income & assets limits for Medicaid. Even though it is "phantom income" it still shows up. You gotta do taxes and 982 to get all cleared and basically re-set.

Do not do ANYTHING without getting the services of an attorney who specializes in Elder Law. This is a complicated issue and you need help in handling it in a way that does not leave you holding the bag. I have been where you are and the attorney's fee is well worth the peace of mind.

Don't do ANYTHING before contacting an attorney whose practice is Elder Law. This whole issue is way too completed to deal with on your own. You could make matters worse, with you ending up holding the bag. The attorney's fee will be well worth the peace of mind.

The reverse mortgage will have to be paid back because it is a loan against the paid-up mortgage. That money is not free and clear. That would be like the bank giving you free money without any clause of repayment, which doesn't exist.

Since Mom is on Medicaid, she is allowed to have $2,000 in countable assests. Medicaid takes the rest.

Wait a minute. You can't garnish Social Security, specifically not if it's SSI. The only way they can get any of the money through the bank account though, is if the person getting the federal benefits gives access to that bank account where the money is being routed.

it may be best to familiarize yourself with the fair debt collection practices act, this will definitely help you. Besides having an alternate address for the bills to go to, you may want to return each and everyone of them and demand that specific facility stop contacting your mom, she is in a nursing home and is judgment proof. Mention the word judgment proof and if she's on SSI, mention SSI and even Medicaid. This will discourage the facility from harassing your mom who is now in a nursing home where the nursing home gets her whole check. Don't give the facility your mom's give the facility your mom's whereabouts or they will harass her at that nursing home. If the facility you demand to see his contact continues contacting your mom, it becomes harassment by law because bylaw they must honor your wish to see his contact according to the fair debt collection practices act

You have some great advice here, listen to it! You cannot sign anything stating you will be responsible for your mother's bills. I would contact an Elder Law Attorney in your state and just ask them what to do, they know things we have no idea about. I would NEVER agree to pay a cent if I did not absolutely have to!!

Since your mom is in a NH, the reverse mortgage agreement will no longer be in effect, and the government can demand repayment of the debt. Best to consult an attorney.

I think Igloos answer was very good. I do think ur Mom needs to be living in the house on a reversed mortgage. You will probably have to sell the house for the Mortgage company to recoup. If there is any money left, that will have to go towards her debts including Grandmas that Mom took on. If anything left, Medicaid will have you use that for her care and then u have to reapply. Think you need to talk to a lawyer or CPA well versed in reversed mortgages. Should find the contract.

Oh yes, as long as there is a bank lien on the house as you mentioned, why not just take over payments on the house and just transfer it to your name? That way, they can't take your house, which would be any rightful inheritance to the family

If your mom was paying for your grandmas nursing home bill before and can no longer pay it and is going on Medicaid, then she can no longer be responsible since she's out of money because Medicaid is for the absolutely needy needy if your mom was paying for your grandmas nursing home bill before and can no longer pay it and is going on Medicaid, then she can no longer be responsible since she's out of money because Medicaid is for the absolutely needy who have no money. What you can do is write a hand written letter to the facility where your grandma was and explain that the bill can no longer be paid because your mom who signed the agreement has gone into a nursing home and is now on Medicaid and on federal benefits and the nursing home now gets her whole check for her care. Make copies of both your letter and the bill, but mail the originals to the return billing address. If she doesn't have the money and she's going into a facility and on Medicaid, then she's no longer responsible for this bill under that condition

Igloo572, your answer was awesome. Plain & clear information!

Since they can't take her home then don't worry about the bill. They can't get blood out of a turnip.

No I'm not living in her house. I am her POA and I have paud her bills with her checking account. I constantly remind any of her bills and the reverse mortgage that is in her name not mine. Thanks for the advice.

Cascade - if mom is in a facility and on Medicaid and has debt, mom is going to walk on all the debt. Her (or you) continuing to pay minimums on any is just prolonging the eventuality that she will walk (default) on all IMO.

I'm going to assume that since she had a stroke, you've been thrust into all this unexpectedly... Like every few weeks you discover something else....my answer is based on this. As you've become aware, once mom goes onto NH Medicaid she is allowed to have a max of 2k as assets but all her monthly income (like her SS, retirements) is required to be paid to the facility as her copay or SOC (share of cost). Her continued medicaid eligibility requires the SOC each month. All mom gets to keep is a small personal needs allowance. PNA varies by state from $ 35 -$ 105. Like for my mom in TX was $ 60. PNA is all income $ she will have from this point forward. The PNA combined with whatever assets cannot go over 2k at each months end.

Now mom walking on debt can mean that the creditors write off the debt & or turn it over to collections. Moms house with the RM is out of compliance once she moves out, so it will go into foreclosure. If collections contact you never ever agree to be responsble for her debt. You may want to rent a mail box at a UPS or other parcel store to become moms new address for the next couple of years to keep her financials apart from yours. Plus it could help you stay more organized in dealing with stuff and keeping it from comingling. If turned over to collections, these guys are relentless and for years..... You don't want your name & address & credit history getting mixed with moms. Having a different address helps with this.

Creditors who are owed over $ 600.00 can issue a 1099-C cancellation of debt for the amount written off plus interest & fees. Some creditors - like CC - do 1099-C routinely and usually for the calendar year after mom stops her final payment. The 1099-C is viewed by IRS as income and it's fully taxable income. If mom has a lot of debt, it could mean a lot of taxable income. As Moms on Medicaid, there is no $ to pay IRS and mom will need to get a CPA or other tax pro to file taxes and a 982 to get a reduction of taxes due to insolvency. Your going to use some of moms up to 2k in assets to pay for the CPA otherwise you personally pay for this. Filing taxes & the 982 to me is never a DIY, mom will need a tax pro to do it as its sticky to understand. Ignoring it doesn't work as IRS as a supercreditor can attach moms SS and retirement income which is required by medicaid to be paid as her SOC. 1099-C have to be issued by end of January for prior year, so be on the look out for these this month.

It sounds like mom didn't understand fully what signing off on financial responsibly meant as RM aren't the magic $ they are touted to be and she signed to be on the hook for her moms debt. Make sure you do NOT put yourself in this situation. Always try to have mom sign for whatever. If she can't & you need to always on every signature do it as "Jane Smith Jones in her limited capacity as DPOA for Mary Smith".

Hopefully you aren't living in moms house with the RM....