Spouse Cannot Discharge Nursing Home Debt in Bankruptcy

//Spouse Cannot Discharge Nursing Home Debt in Bankruptcy

Spouse Cannot Discharge Nursing Home Debt in Bankruptcy

Don’t let this happen to you! Before signing a nursing home agreement, always have it reviewed by an elder law attorney.

A U.S. bankruptcy court held that a wife who was contractually bound through a nursing home admissions agreement to apply for Medicaid benefits on her husband’s behalf and failed to do so cannot discharge the debt owed to the nursing home through bankruptcy. In re Plybon (U.S. Bankr. E.D. Ky., No. 11–10146, March 9, 2012).

When Glenna Plybon admitted her husband to a nursing home, she signed an admissions agreement as the responsible party. The agreement stated that Mrs. Plybon was required to pay a co-insurance amount and apply for Medicaid benefits on Mr. Plybon’s behalf. Mrs. Plybon applied for Medicaid, but did not provide all the information required, so Mr. Plybon’s Medicaid application was denied. Mrs. Plybon did not make any payments to the nursing home and the nursing home discharged her husband.

The nursing home sued Mrs. Plybon for the outstanding balance on Mr. Plybon’s bill. When Mrs. Plybon filed for bankruptcy, the nursing home argued the debt was non-dischargeable. Under bankruptcy law, a debt is non-dischargeable if it is incurred by fraud or defalcation (the willful neglect of one’s duty).

The U.S. Bankruptcy Court for the Eastern District of Kentucky held that the debt is non-dischargeable. The court ruled that Mrs. Plybon was contractually bound by the admissions agreement to apply for Medicaid on Mr. Plybon’s behalf and that her “failure to obtain the Medicaid benefits and the subsequent failure to meet the financial obligations for Mr. Plybon’s care were a breach of her obligations under the [a]dmissions [a]greement as the party responsible for Mr. Plybon’s financial assets and liabilities.”

By |2018-06-14T17:49:07+00:00March 22nd, 2012|Elder Law|0 Comments