My mother in law seems to be hovering at the threshold of 'too far gone to take care of herself'. She lives alone, she forgets things, she's bitter over her divorce 25 years ago, she's paranoid, she gets lost in unfamiliar places and some places that should be familiar... etc.

The forgetfulness is getting worse, of course, and she's not taking any dementia or Alzheimer's medication for it. My wife and I talked with MIL's gerontologist a little over a year ago, and he said he would write a letter to the court in support of my wife taking a guardianship, but we hesitate to do that because MIL still can handle her day-to-day life (if not her finances). She drives the couple of places she wants to go, she does her own shopping and cooking and cleaning, etc. We don't want to take that away from her if we can help it.

She's on a very fixed income. A very small social security check. A very small alimony (for life!) check from my wife's father. She owns her home and her car. She has nothing else of any real monetary value.

She can't really learn new things. She has a flip cell phone but she won't keep it charged and leaves it off because she doesn't want to be charged for when she's not using it. If we tell her "Leaving the cell phone 'off' doesn't save you any money for the exact same reason that leaving the TV 'off' doesn't save you any money" then she seems to understand that for the duration of the conversation, but the next day she's got her cell turned off again "to save money".

For a while a couple of years ago she was unable to balance her checkbook (it appears that she can't handle a check register anymore and she thinks the balance she sees at the bank's website is the current balance, regardless of any checks she's written that haven't cleared) and we covered her several times over about 4-5 months, and then everything got better. My wife got added to her bank account - not as a joint account holder, but something else where she could see the balances/activity. That gave us visibility to the checking and savings account, but NOT the credit card. Which was a mistake...

So she's been as responsible as one could expect for a woman with her limitations. Her last 6 months or so CC bills have almost no charges on them, (maybe 3 total charges for the last 6 months) but she was not able to make the minimum payments so a typical bill looks like so:

$00.00 New Charges
$20.00 Payment
$45.00 Interest
$35.00 Late Fee
$420.00 Minimum Payment
$5000.00 Balance

As her minimum payment and balance increased, she grew less and less able to pay it, and then her bank sent it to collections, and now her bill (from the collection agency) looks like this:

$5500.00 Balance
$1850.00 Collection Fee*

Which is when we found out about it...

So we met with her bank today, who referred us to the law firm they've got doing their collections, and we've got an appointment on Tuesday to get her to sign Power of Attorney documents. I'm hoping we can work something out with the collections guy. We can pay her debt, of course, but we don't need to. Maybe collections will take a settlement, or MIL can get out from underneath some of it via bankruptcy. Even if she still had good credit, she doesn't really have a use for it anymore that I can see.

So... how do you know when to take over completely by petitioning a court for guardianship. One of the downsides is that we would have to take her car away from her, I think, as I believe the law would hold us responsible if she continues to drive after we take control.

Any advice?

*This is the part where the bank passes their lawyer bill on to her. When I saw that I asked the assistant bank manager we were sitting with "this item is you charging her for your lawyer fees, right?" and he said , "In a collections situation like this we pass those fees onto the consumer". Nice.