My mom is in quite a mess. A little background first: My mom was officially divorced last year and was seperated for a few years before that. Her ex worked for Ford's and kept my mom covered under his medical plan (or so she was told...). My mom was diagnosed with Cancer last year and went through all the treatments (and currently is Cancer free). Well, her ex passed away a few months ago and my mom was the benifituary. She received enough money to have a nice downpayment on a house (she is low income and works 45-50 hours a week just to live week to week). While taking care of paper work with Ford she was told that she never should have been covered on the ex's health plan after they were divorced. She is not starting to receive medical bills because Ford's is refusing to pay the medical bills. Sorry for the long post but does anyone have any advice for getting out of this mess? Is bankruptcy her only recoarse? That may not even be possible since when she was married to her ex he filed for bankruptcy (maybe about 8 years ago..).
Well, a couple of things... If your mother received life insurance proceeds, that money would not generally be protected in bankruptcy. The trustee could take that money and distribute it to the creditors. If she has already bought the house with the money, it's a little trickier depending on the homestead exemption for your state. I certainly wouldn't declare bankruptcy within 6 months of receiving a large life insurance payment. After 6 months, a Chap 13 might be doable. I'd talk to a BK attorney in your state. If Ford has paid medical bills on your mother's behalf, they're probably going to try and get that back from the providers. They they'll come after her. Is there any chance she qualifies for medicaid?
She used the life insurance money on the house that she bought a few months ago. The kicker is that she actually Could have used her medical insurance but didn't because she knew she was covered under the ex's Ford plan. I don't think that she would qualify for Medicaid. Could she possibly lose her house over this?
If she had valid medical insurance at the time, they can go back and file against her. Generally you're allowed to exclude a certain amount of equity in a home in bankruptcy. How much depends on the state and the situation. You really need a BK attorney familiar with the laws of your state. It's possible she could lose the house, it's possible it could be exempt.
