The Elder Law Forum

The Elder Law Forum Hosptials, credit
card companies
can take your home By Michael Myers
USD School of Law Age has its rewards: senior discounts on coffee, movie tickets, rides on Amtrak, and in the case of a senior helpline caller, a homestead exemption that protects $170,000 in home equity, compared to $30,000 for persons 69 and younger. The caller is 73; his wife 71. They reside in a rural community, population 890. They own their home outright, having paid off its mortgage 15 years ago. The house has an estimated fair market value of $95,000. Their income is limited to $2,600 per month in Social Security payments–$1,950 on his record, $650 on hers. Two years ago he sustained a stroke, was hospitalized for nearly three months and underwent six months of rehabilitation. When the medical expense dust settled he owed $27,000 in deductibles, copayments and uncovered costs to various healthcare providers. â�?�?In the beginning we tried to keep up,â�? said the caller. â�?�?But then we began receiving threatening letters and phone calls from a hospital; thatâ�?�?s when we took advantage of three â�?�?pre-approvedâ�? credit card offers. We used them to pay the hospitals and doctors. â�?�?But now, with interest piling up at rates of nearly 25 percent, it has become hopeless. It looks like we will have to take bankruptcy. But if we do can they take our house? Itâ�?�?s the only thing we have after a lifetime of working and saving.â�? They live in South Dakota, which historically â�?�? along with Texas and Florida â�?�? had an unlimited homestead exemption, which meant unsecured creditors could not levy or attach a debtorâ�?�?s home. Then the loan-shark industry lobbied congress into tightening the bankruptcy escape hatch, capping homestead exemptions at $125,000, irrespective of state law. South Dakota responded by lowering its exemption from an unlimited amount to $30,000; however, for homeowners 70 and older, the exemption is $170,000. Nearby Minnesota bucked the trend toward decreasing home protection. It established a reasonable $200,000 exemption for urban residential property and $500,000 for rural property. â�?�?What should we do?â�? asked the caller. I advised that he inform the credit card companies that as a matter of law their home and Social Security income are exempt assets. They are effectively â�?�?judgment proof.â�? They can continue to live in their home. Hospitals, clinics, drug companies and credit card companies form an unholy alliance in todayâ�?�?s marketplace, a marketplace aided and abetted by our elected officeholders. (Pro bono legal information and advice is available to persons 55 and older through the USD Senior Legal Helpline, 1-800-747-1895; mmyers@usd.edu. Opinions solely those of the author and not the University of South Dakota.)

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