# Family Feud - Not the Game Show!



## Dana (Nov 17, 2009)

Our elderly relative is somewhat reclusive, has emotional issues and is difficult to deal with under the best of circumstances. Recently she suffered a serious health emergency that has compromised her ability to live completely independently and requires family intervention. As far as the personal care part of her life is concerned, we are making progress and she is somewhat co-operative of the support and services that must be set up.

She has no assets and lives soley on government pensions in a rent-geared-to-income seniors community. 

She is hesitant to sign a POA for property - her children are working on it. She allegedly has a small life insurance policy that she says designates one of her children as beneficiary. No one has seen it. She has a limited work history and a CPP death benefit of approximately $500 is expected when she passes. 

Here's the issue - it has come to our attention that this lady has acquired credit cards over the past few years. 

With no means to repay the debt, she is kiting (taking from one to pay the other) which will eventually catch up to her. Some members of her family want her to sign a POA after which they want the attorney to "take full charge" of her financial affairs and make all decisions on her behalf. Since she is still competent (difficult to deal with, but competent), this is not reasonable. We may not agree with her decisions, but they are her decisions and she has the right to make them. 

My questios are:

If this kiting scheme catches up to her while she is still alive, goes to collections and ends up in court, will the courts allow OAS/GIS benefits to be garnisheed?

We expect that she will sign a will and designate one of her sons as executor. He is concerned that he will have to deal with months of creditor issues even though there are no assets for them to claim. In this case, would it be better if she were to die intestate or would that complicate matters even further? 

Sorry for the lengthy post. Any and all guidance is appreciated.


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## Four Pillars (Apr 5, 2009)

I think your relative needs to institute the 3 tiers of savings. See Royal for details.


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## I'm Howard (Oct 13, 2010)

I would refuse to act as Executor, this transfers some legal liabilities, have a trust company such as Scotia Trust act in this manner.

Executors may be held liable for some debts.


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## Dana (Nov 17, 2009)

I'm Howard said:


> I would refuse to act as Executor, this transfers some legal liabilities, have a trust company such as Scotia Trust act in this manner.
> 
> Executors may be held liable for some debts.


There is no money to hire a trust company to act as executor. There are no assets in the estate. I am pretty sure that all of her children are prepared to decline to act as executor if they are designated as such. Years ago the province would appoint trustees for people who died intestate - I wonder if that is still how it works?


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## marina628 (Dec 14, 2010)

What property does she have?You wrote She is hesitant to sign a POA for property ,this has confused me.I don't think they can garnish her benefits but they can freeze the bank accounts these payments go to.How much debt are we talking about here?


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## Dana (Nov 17, 2009)

marina628 said:


> What property does she have?You wrote She is hesitant to sign a POA for property ,this has confused me.I don't think they can garnish her benefits but they can freeze the bank accounts these payments go to.How much debt are we talking about here?


In Ontario, POA for property is POA for financial affairs. This is necessary regardless of whether she has assets because if she becomes ill again or unable to act on her own behalf, someone needs to update her bank book, write rent cheques, pay her phone bill, etc. 

We don't know the amount of the debt. She is difficult to deal with and discloses small amounts of information to different people. I hate to say it, but she is a cranky old lady and if she weren't a relative most of us would not be helping her. 

What I am silently seething about inside is that she was able to get these credit cards in the first place. She only has pension income, no assets and lives in subsidized housing. Have the banks learned *nothing* from the recent global credit crisis?


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## marina628 (Dec 14, 2010)

Dana ,
This person could live many years I think it is best that she or somebody on her behalf try to resolve the debt.It is difficult to say if we are talking about $2000 or $20,000 CC debt but obviously it is racking up interest.Don't assume Death will clear the bills ,when my husband's brother died in 2008 he owed $8000 to CIBC Visa.My sister in law ended up having to pay it even though she did not sign the account as joint,they were going to sue his estate if not paid.
As for banks ,well my daughter turned 18 on November 18th .My husband took her in our TD branch to get a CIBC visa ,we were thinking student Visa $500 limit.She has quite a bit of savings in her account and does work full time since June 2010 .Her first visa card and TD bank approved her $5000 credit limit!


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## MoneyGal (Apr 24, 2009)

Dana - here is the information you are looking for w/r/t estates and intestacy: the Office of the Public Guardian for Ontario - 

http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/overview.asp

I am posting in a hurry. Please feel free to PM me on this topic. (Or continue discussing here.)


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## Dana (Nov 17, 2009)

MoneyGal said:


> Dana - here is the information you are looking for w/r/t estates and intestacy: the Office of the Public Guardian for Ontario -
> 
> http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/overview.asp
> 
> I am posting in a hurry. Please feel free to PM me on this topic. (Or continue discussing here.)


Thanks, MG. According to the website she would qualify for a public trustee because she is in Ontario and if she were to pass now would be intestate. I am interpreting that correctly, right?


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## marina628 (Dec 14, 2010)

Maybe my experience is not same here as there was a spouse left behind but estate was life insurance policies and few thousand left in joint bank accounts which automatically went to my sister in law.My point though was unless this person is on her deathbed ,why let her credit card debts go unresolved and pay more interest?


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## Dana (Nov 17, 2009)

marina628 said:


> Dana ,
> This person could live many years I think it is best that she or somebody on her behalf try to resolve the debt.It is difficult to say if we are talking about $2000 or $20,000 CC debt but obviously it is racking up interest.Don't assume Death will clear the bills ,when my husband's brother died in 2008 he owed $8000 to CIBC Visa.My sister in law ended up having to pay it even though she did not sign the account as joint,they were going to sue his estate if not paid.
> As for banks ,well my daughter turned 18 on November 18th .My husband took her in our TD branch to get a CIBC visa ,we were thinking student Visa $500 limit.She has quite a bit of savings in her account and does work full time since June 2010 .Her first visa card and TD bank approved her $5000 credit limit!


She has no spouse and no other authorized signers on the credit card accounts. Based on the research I have done today, it sounds like her creditors can sue the estate but since there is no estate they won't get paid. 

Since her income is so limited, there is no funds to make more than minimum payments on her cards. Since she is not incompetent we cannot stop her from accessing credit that has been granted to her or tell her to stop using it or how much to pay toward it.

I hear your frustration with your daughter. I have a relative in university who has a $1k credit card and the bank keeps increasing his limit to $5k. He keeps contacting them and asking them to reduce it. They don't even check with him first, he sees the credit limit increase on his bill. It's ridiculous.


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## marina628 (Dec 14, 2010)

Yeah and TD said they will set her up with a credit line about $10,000 as soon as she starts school in September.I feel sad for seniors who have nothing and thankful my own parents have been smart with their funds all their life.My Dad is 72 and good sense of humor he tells us he is f****d if he lives another 20 years lol.But he is still sitting on $130,000 Fortis stock and another $100,000+ in cash/GIC .Fortis is only stock he has ever bought in his life as he lives in Newfoundland and they can pay for stocks when they pay the light bill.He has been buying them since 1982 and every year he he buys a few more.


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## plen (Nov 18, 2010)

marina628 said:


> My husband took her in our *TD* branch to get a *CIBC* visa.


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## marina628 (Dec 14, 2010)

Brain fart , i mean to say student visa lol


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## sags (May 15, 2010)

Pensions are creditor proof. She can stop paying them and advise them that she is on pension and won't be paying. They will cancel the credit cards and it will trash her credit report..........but that could be a good thing, given the circumstances.

In Ontario there is a 2 year "out of luck" date. If the date of last activity passes that point, the debt is uncollectable.

So, if the debtors try to collect later down the road, tough luck for them.


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## humble_pie (Jun 7, 2009)

there is a popular genre of movie comedies about seniors who are much smarter than the world believes. In these movies, their high jinks, romps & antics become endearing themes. Is it possible this lady knows exactly what she's doing. In other words she is spending on purpose, gaining perks & benefits in her old age because she knows it's the bank that will have to pay in the end.

maybe part of the reason she's a bit crabby & not too forthcoming with the info is she doesn't want anyone in the family to find out & try to stop her. Kind of makes me think of harold & maude.


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## MoneyGal (Apr 24, 2009)

Dana said:


> Thanks, MG. According to the website she would qualify for a public trustee because she is in Ontario and if she were to pass now would be intestate. I am interpreting that correctly, right?


Yes.


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## marina628 (Dec 14, 2010)

sags said:


> Pensions are creditor proof. She can stop paying them and advise them that she is on pension and won't be paying. They will cancel the credit cards and it will trash her credit report..........but that could be a good thing, given the circumstances.
> 
> In Ontario there is a 2 year "out of luck" date. If the date of last activity passes that point, the debt is uncollectable.
> 
> So, if the debtors try to collect later down the road, tough luck for them.


Do you have a link anywhere that says this?


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## Racer (Feb 3, 2010)

Marina,

The part about the "out of luck" date is here: http://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html. If you scroll down to Section 4 and 5, you can see the default 2-year limitation rule.

If a person acknowledges a debt, however, then that re-starts the 2-year clock. That's in Section 13.

That's why debt collectors will sometimes say that they will accept a very low payment, but then turn around and demand payment of the entire debt -- the low payment restarts the clock and the debtor doesn't have anything in writing establishing that there was a verbal agreement to accept the payment as settlement in full.


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## MoneyGal (Apr 24, 2009)

Relevant link on whether pensions can be seized or garnished: 

http://www.canada.com/vancouversun/...eed:+canwest/F261+(Vancouver+Sun+-+BusinessBC)

General rule is that pensions are largely creditor-proof, except in the case of unpaid taxes. 

Sags is referring to the Ontario Limitations Act 2002 (which came into force on January 1, 2004). It sets two years as the statute of limitations on uncollected debt. If a default occurred prior to January 1, 2004, the creditor will continue to have 6 years to pursue the claim. However, if the default occurred after January 1, 2004 then the 2-year rule applies.


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## MoneyGal (Apr 24, 2009)

X-post with Racer! Nice to see that little bee in the forum again.


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## Dana (Nov 17, 2009)

Thank you for all the replies. They have been very helpful.


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## Racer (Feb 3, 2010)

Thanks MoneyGal 

Dana, good luck! That sounds like a tricky situation.


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## marina628 (Dec 14, 2010)




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## Racer (Feb 3, 2010)

Marina,

I think that you might be confusing 2 separate issues here. 

A credit file or credit score that is maintained by a credit data analyzing company ("credit bureaus" like Equifax and Transunion) or a rating generated by a financial institution is merely a tool to help a lender or creditor decide whether or not a consumer is likely to default on repayment of a loan. To my knowledge, this practice is relatively unregulated -- and rightly so, since a person doesn't have a "right" to borrow money. (I think there is some kind of a process in place to correct errors, but I don't know what that is).

The issue that we were discussing above is whether a company that is owed money has the ability to take a debtor to court for repayment. They can't do that if they waited longer than 2 years to start the lawsuit.


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## MikeT (Feb 16, 2010)

So this poor lady has no assets at all? She pays her living costs with government pensions that are creditor proof? She's half senile and the bank gave her a bunch of credit? 

That was the bank's mistake. If it was my granny, she'd be taking the whole family to Hawaii courtesy of the idiot creditors. And she'd also use the credit to buy a nice paper shredder to shred all future credit card bills that come in the mail.

They can't get blood from a stone.


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## Racer (Feb 3, 2010)

Preach it, Mike!


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## marina628 (Dec 14, 2010)

Now we have determined granny can't be sued ,I wish Granny a good quality of life for whatever days she may have left.Maybe the credit card game is the only way she can have a few extra things .The bank probably looked at Granny's income and her debt which at the time may have been zero and approved her.At least she has sense to pay her bills ,if she is not maxed on the cards and no intention ever to pay them off I guess why stop her .


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## sags (May 15, 2010)

marina628 said:


> When a company updates a balance on a paid off debt will that count as last activity. Td bank totally mess my fico ,went from 780 down to 714 just because of way they did our financing when we bought three homes in 2009/2010.Rather than get mortgage on a house we had free and clean they convinced us to get credit line for 192,000.We had this for total of 10 months just to secure the 20% down on the new property ,then we sold house and paid out that credit line to zero .They got us to get another credit line on new house for $40,000 just for three months! to buy the last investment property then when we got that house closed they reduces the credit line down to $20,000.My husband and i retain Separate investments credit etc and also have separate real estate.So in less than one year i had two new credit lines and both were reduced totally killed my fico.
> So after TD screwed that up ,the bank lady had after thought and got me a new visa with $20,000 limit to replace the 20k they dropped off my HELOC lol.Now I am a credit seeker lol
> All my cards are paid off and I now have one card in my wallet which is my Aeroplan visa .It will probably take me a year of no spending just to get my fico back to 780.


You should still be in the range for the best interest rates. Your credit score will only improve if you use credit. Buy something small each month that you would normally buy.......like gas or food, and then pay off the balance before the due date. In a couple of months your credit will be restored.

The credit agencies will only fix provable errors. They won't adjust the credit ratings because we mess up and open too many credit cards, or other known credit score lowering culprits.


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## sags (May 15, 2010)

The only caveat is that the debt will end up with a credit collector, and they can be a nuisance. The debt is uncollectable after 2 years, but there is nothing to stop them from trying until it passes the 6 year limit and is dropped from his credit record.

My son owed a phone debt from 5 years ago, when he lived out west. It originally started out as a 150 dollar debt. He tried to cancel the contract but they wouldn't do it. They wouldn't accept payments on the debt either. They wanted it all, so he paid nothing and moved back home. The bill is now around 700 with interest and late charges.

So, they got our address and have been calling regularly. He doesn't live here anymore and I have told them that........but everytime it changes to a new collection agency (as they do frequently), I get a rash of new calls and "urgent" messages.

I rather enjoy their phone calls. I always give them a different story.

One time he is on safari in Africa........the next time he is on a secret mission with the CIA.........sometimes they phone twice in the same day and get two different stories.......

Great fun....................


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## marina628 (Dec 14, 2010)

Sags ,
I have 6 credit cards with combined $34,750 credit limits .I have some automatic monthly payments coming off each one about 5-10% of credit limit is what i use .My main CC is my Aeroplan Visa and I use about 50% of that credit limit each month and pay them off as soon as bill comes in.The credit line has not gone over $500 since i got it.

The only thing i use my credit for is real estate and of course when I travel which is a couple times a year to Europe on Business.I had to deal with one collection agent many years ago and it was because sprint gave me a long distance rate then after three months changed it without notice.My bill was about $200 extra and I refused to pay it.About a year later I had the collectors call ,i ended up paying it for my own peace of mind.

I had bill collectors call a couple months ago for my employee , sometimes 5 times a day from 8am -9pm.After three weeks of passing messages along I told them on final calls he quit her job because she won lotto 649.The person on the phone asked me to hold on for a minute then a different person talked to me.Asked me to repeat what I told other girl so I told him She quit her job because she won lottery.They asked me if i had any idea how to reach her and i said no,Never called back since then.


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## Dana (Nov 17, 2009)

I was speaking with a relative this morning about how angry it makes me that the bank would issue credit given the circumstances. His point of view is that the bank knows exactly what they are doing and see it as numbers game. 

They probably know she will die and they will have to write off the balance, they just take the risk that she lives long enough to pay them enough interest that in the end it will have been a profitable venture for them. 

It gave me a new perspective. She and her lenders might all know what they are doing and there's something in it for all of them. 

Very dysfunctional...


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## Pigzfly (Dec 2, 2010)

marina628 said:


> As for banks ,well my daughter turned 18 on November 18th .My husband took her in our TD branch to get a CIBC visa ,we were thinking student Visa $500 limit.She has quite a bit of savings in her account and does work full time since June 2010 .Her first visa card and TD bank approved her $5000 credit limit!


Tangent - this could be really good, should you ever need to rent a car. Usually 5K is what you need to get a gold visa, which usually comes with car rental insurance. Not the greatest car insurance, but a huge chunk of savings if you're under 25! (My partner and I switched to gold visas for this purpose one summer, car rental was then approx 50% what it would have been).


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## OhGreatGuru (May 24, 2009)

Racer said:


> Marina,
> 
> The part about the "out of luck" date is here: http://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html. If you scroll down to Section 4 and 5, you can see the default 2-year limitation rule.
> 
> ...


Except that CBC Radio 1 had a guest this past week who was a former collector, quit because he couldn't stand it, and moved into consumer advocacy. He said debt collection agencies routinely ignore the 2 year limitation, and hound people for debts up to 10 years old. He went on to say the government doesn't enforce the existing laws.


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## OhGreatGuru (May 24, 2009)

_Some members of her family want her to sign a POA after which they want the attorney to "take full charge" of her financial affairs and make all decisions on her behalf. Since she is still competent (difficult to deal with, but competent), this is not reasonable. We may not agree with her decisions, but they are her decisions and she has the right to make them._

Unless she has been legally declared mentally incompetent, a POA cannot "take full charge" of her affairs. A mentally competent person can cancel a POA anytime. She would still own the credit cards, and have accees to all the bank accounts. The POA for a mentally competent person may act on behalf of the person, but is expected (in fact required) to act in accordance with the person's wishes. 

The problem your family is trying to solve is saving the person from her own folly, which likely wouldn't meet the criteria for a competency hearing. (If it did there would be a lot of debt-burdened people being declared mentally incompetent.)

Refuse to be an executor or POA unless she agrees to go into credit counseling and tear up her credit cards.


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## kcowan (Jul 1, 2010)

OhGreatGuru said:


> Refuse to be an executor or POA unless she agrees to go into credit counseling and tear up her credit cards.


+1
That is the only action that makes sense. All others are like leading a horse to water!


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## marina628 (Dec 14, 2010)

So nobody is going to Hawaii?It is difficult to give advise online when you do not know all circumstances.Maybe this lady worked hard all her life and did for her kids without thinking of her own retirement needs.Maybe she drank it all away or maybe she has never had any money her entire life and has always struggled to pay bills by using credit cards .At the end of the day ,what good does it do her to be miserable in her last few days.If there is nothing to leave her kids and nobody will get hurt in end I would get her more credit lol
I have met some greedy kids in my life ,don't want the parents to go on trips and spend money so they will have more inheritance .You can't take it with you .If my mom was struggling and I could afford it ,I would pay her credit card for her if all she is doing is using it to pay necessities.Again depends on the relationships and how every piece of the puzzle fits together.


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## kcowan (Jul 1, 2010)

Yes that is the benevalent socialistic view. And it may have merit. But if you are going to get involved in her financial life, it is best to do it with your eyes wide open!


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## marina628 (Dec 14, 2010)

I think Dana and her family will not be in a position to best advise her until they know full exptent of the debt.We may be talking about two cards each with a $1000 limit or we may be talking 5 cards with $10,000 limit each .As long as nobody else is liable,her pensions are safe from the banks then it is very little consequence.Also she is paying her bills ,banks will bother her as long as that minimum payment is made.If she is maxed out and can't pay then the issues will happen.She may live many more years yet.My friend works in a nursing home and she said most seniors have $100 or so at most left over from their checks.


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## marina628 (Dec 14, 2010)

cccfree said:


> With the amount of unsecured debt that you stated in having, have you ever considered seeking out a credit counselor. They might help you out with your unsecured debt that you have...
> 
> Ablsolutely hilarious story about telling the bill collector that you won the lotto


Think you read wrong I have that AVAILABLE credit limit , my cards are paid out every month ,check my net worth .And it was my employee they called for not me.


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