Spouse's responsibility of Credit Card Debt
Author: brandyvee
Posted: Wed Aug 31, 2005 9:32 am
Post subject: Spouse's responsibility of Credit Card Debt
My mother-in-law is battling cancer and we've been told that we don't have much time left. We are trying to be sure that all the business matters are taken care of. She has a credit card with a large balance that is only in her name. They used the card to consolidate some debts a few years ago. My father-in-law is retired and on a fixed income. His name is not on the account at all. Is he responsible for that debt? Will that debt have to be paid out of her "estate"? She has very little life insurance and just a small amount in a 401K that can be drawn out. Need some advice from anyone who can help!
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Author: JaneiR36
Posted: Wed Aug 31, 2005 3:00 pm
Post subject: Spouse's responsibility of Credit Card Debt
I am so sorry to hear about your situation.
Unfortunately, as far as I know, only single people without dependents need not worry about their loved ones dealing with a huge debt after they are gone. In death or divorce, both spouses are responsible for one another's debts collected DURING THE MARRIAGE.
However, if she does have anything of an estate, no matter how small, be sure to look into a trust as against just a will. Apparently, with a will you could be stuck paying all kinds of fees before even the small money you have can go to paying off your debts or going to your dependents. With a trust, it's more straightforward. I got this info from Suze Orman's show so hopefully it should be on her website. Please do a google search for it for more info. (Don't know if I can post the link here?)
Author: Ira
Posted: Wed Aug 31, 2005 9:14 pm
Post subject: Spouse's responsibility of Credit Card Debt
It really depends on the survivor laws of your state. However, estate taxes are something you shouldn't have to worry about unless she has over $600,000.00 in assets. That's the current exemption. Also, you're 'way too late to put her $$$ into any kind of a trust. There's a waiting period of several years before it becomes final. If you do it now and she passes on within a year the trust will have no effect at all. You can try returning any statements that come in afterwards. Just cross out the addressees name, write "DECEASED [date]" across the envelope, and drop it in the nearest mailbox. When my Mom passed away we did just that and never heard anything further. However, that was 15 years ago. Keep it in mind, you have nothing to lose.
Author: Polonius
Posted: Thu Sep 01, 2005 1:05 am
Post subject: Spouse's responsibility of Credit Card Debt
The exemption is $1.5 million for 2005 for federal estate taxes. $600,000 was the limit in 1998, but it rises each year. In any case, there never are any inheritance taxes on assets left to a spouse who is a U. S. citizen.
The laws vary from state to state. In Texas, for instance, a man is liable for his deceased spouse's credit card charges even if the cards were in the spouse's name alone. In other states, only the deceased's estate is liable for the charges.
In addition to the question of legal liability, there's the question of how aggressive the credit card companies will be to go after the debt. Usually, they only try to go after relatives if they were co-signers on the card or if their credit was used as part of the original application. Plenty of exceptions to that observation, though.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: tonyb
Posted: Thu Sep 01, 2005 3:53 am
Post subject: Spouse's responsibility of Credit Card Debt
Like what has been said before, he may or may not be liable for the balance depending on the state he lives in.
However dependents, I'm fairly certain (but I am not a lawyer) are not liable for their parent's debts, although they could probably could put claim to any money left in her estate.
That doesn't mean that creditors won't try to convince you that you owe on her debt. DO NOT SIGN ANYTHING OR MAKE ANY PAYMENT AGREEMENTS. Be careful, some creditors are pretty sleazy when it comes to that practice.
Posted: Wed Aug 31, 2005 9:32 am
Post subject: Spouse's responsibility of Credit Card Debt
My mother-in-law is battling cancer and we've been told that we don't have much time left. We are trying to be sure that all the business matters are taken care of. She has a credit card with a large balance that is only in her name. They used the card to consolidate some debts a few years ago. My father-in-law is retired and on a fixed income. His name is not on the account at all. Is he responsible for that debt? Will that debt have to be paid out of her "estate"? She has very little life insurance and just a small amount in a 401K that can be drawn out. Need some advice from anyone who can help!
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: JaneiR36
Posted: Wed Aug 31, 2005 3:00 pm
Post subject: Spouse's responsibility of Credit Card Debt
I am so sorry to hear about your situation.
Unfortunately, as far as I know, only single people without dependents need not worry about their loved ones dealing with a huge debt after they are gone. In death or divorce, both spouses are responsible for one another's debts collected DURING THE MARRIAGE.
However, if she does have anything of an estate, no matter how small, be sure to look into a trust as against just a will. Apparently, with a will you could be stuck paying all kinds of fees before even the small money you have can go to paying off your debts or going to your dependents. With a trust, it's more straightforward. I got this info from Suze Orman's show so hopefully it should be on her website. Please do a google search for it for more info. (Don't know if I can post the link here?)
Author: Ira
Posted: Wed Aug 31, 2005 9:14 pm
Post subject: Spouse's responsibility of Credit Card Debt
It really depends on the survivor laws of your state. However, estate taxes are something you shouldn't have to worry about unless she has over $600,000.00 in assets. That's the current exemption. Also, you're 'way too late to put her $$$ into any kind of a trust. There's a waiting period of several years before it becomes final. If you do it now and she passes on within a year the trust will have no effect at all. You can try returning any statements that come in afterwards. Just cross out the addressees name, write "DECEASED [date]" across the envelope, and drop it in the nearest mailbox. When my Mom passed away we did just that and never heard anything further. However, that was 15 years ago. Keep it in mind, you have nothing to lose.
Author: Polonius
Posted: Thu Sep 01, 2005 1:05 am
Post subject: Spouse's responsibility of Credit Card Debt
The exemption is $1.5 million for 2005 for federal estate taxes. $600,000 was the limit in 1998, but it rises each year. In any case, there never are any inheritance taxes on assets left to a spouse who is a U. S. citizen.
The laws vary from state to state. In Texas, for instance, a man is liable for his deceased spouse's credit card charges even if the cards were in the spouse's name alone. In other states, only the deceased's estate is liable for the charges.
In addition to the question of legal liability, there's the question of how aggressive the credit card companies will be to go after the debt. Usually, they only try to go after relatives if they were co-signers on the card or if their credit was used as part of the original application. Plenty of exceptions to that observation, though.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: tonyb
Posted: Thu Sep 01, 2005 3:53 am
Post subject: Spouse's responsibility of Credit Card Debt
Like what has been said before, he may or may not be liable for the balance depending on the state he lives in.
However dependents, I'm fairly certain (but I am not a lawyer) are not liable for their parent's debts, although they could probably could put claim to any money left in her estate.
That doesn't mean that creditors won't try to convince you that you owe on her debt. DO NOT SIGN ANYTHING OR MAKE ANY PAYMENT AGREEMENTS. Be careful, some creditors are pretty sleazy when it comes to that practice.
posted by CardRatings.com at 12:51 PM
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