Pay off CC or put $$ towards downpayment?

[bdhu2001]

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@notfancy wrote:

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@songsofexperience wrote:

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@bdhu2001 wrote:

I know I'm too specific, but do you have to pay full mortgage if you stay at your dad's house longer? Why not 1/2 or etc.  Also you won't need to have the full DP when you apply, but you'll need the down payment and closing fees prior to closing. I don't know what your utilization is on the card that you say you were planning to pay off. 

If your utilization is less than 25% on each card, then there isn't so much of a boost that you should pay it instead of saving.  But if that card is above 25%, pay it down. Also, homes don't close instantly so you're going to need someplace to stay for about 60 days while you go through this process.  I need more specifics to give better advice.

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So when my dad goes into the Nursing Home, he needs to go on Medicaid to pay for it. They will put a lien on the house unless I transfer it into my name. Since I don't want it (as I said, upside-down mortgage. MHs don't appreciate, it needs lots of repairs) the lien will happen. "All" his money  (his tiny SS payment and tiny pension) will go to the NH and then Medicaid will pay the difference. That means if I stay, I have to pay the mortgage. Or live there as a "squatter" until I can move into my own place!

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My understanding is that you can no longer transfer assets to use Medicaid or Medicare. They look at who owned the property for the last 5 years. So, even if he transfers the home to you, you'd lose it to the government. Basically, until his assets are liquidated, he won't be eligible. At least, that is my understanding.

"The adult children of elderly parents in many states could be held liable for their parents' nursing home bills as a result of the new Medicaid long-term care provisions contained in a law enacted in February 2006. The children could even be subject to criminal penalties.

The Deficit Reduction Act of 2005 includes punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. Essentially, the law attempts to save the Medicaid program money by shifting more of the cost of long-term care to families and nursing homes.

One of the major ways it does this is by changing the start of the penalty period for transferred assets from the date of transfer, to the date when the individual would qualify for Medicaid coverage of nursing home care if not for the transfer. In other words, the penalty period does not begin until the nursing home resident is out of funds, meaning there is no money to pay the nursing home for however long the penalty period lasts."

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This is true, but it's also mute at this point, because OP states that the house is upside down.  However, Medicaid consider your home and your car exempt.  Thus, if those assests had been transfered (say 6 months to a year)prior to the need for aid, it would not have been considered a transfer to be eligible for medical/medicaid.  Because if property is exempt, then the property couldn't have been transfered in order to make you eligible.  It's been a while since I dealt directly with the program, my last 20 years prior to retirement, I was management.  But I know that during tthe time, I was in management, it because even easier to to transfer funds. 

During my time, we looked back 2 years, but I worker Beltran Vs Myers (I think) cases where we had to give back families all funds who were denied for transfer of propberty. Because we had denied people who had transfered exempt property, the case required us to reverse all denials for transfer and then only deny cases that transfered non-exempt property.

After they came up with the lein procedure, there was some ruling about the lein couldn't be on a person's home (only considered home if you live in it.  House and home aren't the same).  Thus, many people would go into LTC and return home, prior to death, so that the lein was taken off the property.  But I digress, as I said, it doesn't mater in this situation as the bank would own this asset.

[songsofexperience]

If an adult child has been living in the home for at least two years prior to entrance to the NH and if it can be shown that by acting as care-giver said child has delayed the person's entry into the home, the house can be transferred to that child. IF the child has NOT been living in the home, then the transfer would be subject to the 5 year look-back period and would be considered a "gift" and medicaid would delay picking up the bill for however many months/years their formula tells them to.

That said, it is indeed a moot point, because he's upside down on the house and there's no way, because it's a manufactured home, that this will ever change.

I'm seeing a lawyer this afternoon to start the guardianship and find out/clarifiy my liability to the house/mortgage and what will likely happen - medicaid lien, sale, foreclosure.

I don't know how anyone gets into a home these days - there are a million details to attend to. The 5 year look-back period freaks me out because I generally just pay for things out of my account and then reimburse myself (when I do his shopping for example), but I haven't been keeping track of that. Also, I sent my parents money to buy a car about 5 years ago and when we sold it in 2012, I just kept the money because, well, I've been subsidizing them my entire adult life so it was my money, but I don't know that Medicaid will see it that way! There really shouldn't be a penalty period for him, but it's little things like that that worry me they might classify as a "gift" rather than "repayment."

Anyway. I'll know more after I see the lawyer and talk to the folks at Medicaid.

I'm now also holding off a day or two to see how much the lawyer is going to cost me before I apply that $1000 to my CC. I have some time because my cards tend to report to the CRAs between the 14th and 18th of the month.

Thanks you guys!

[notfancy]

Good luck to you. I hope that some how you find a way through this that is as low in stress as possible. You've already gone through a lot the last few years. My heart goes out to you for what you've been dealing with. There are a lot of people that wouldn't.

Also, thank you for your clarifying my post for me. I wasn't aware of those details. I was glad to read that it might not affect you too much. I was concerned about that.