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The W - Random - Question re: debt of a deceased person
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TheBucsFan
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Since: 2.1.02

Since last post: 39 days
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#1 Posted on | Instant Rating: 7.40
Hey, so I'm wondering if anyone here has dealt with something like what my family is faced with.

My mother died a few weeks ago. There is a not-insignificant amount of debt that was in her name alone. Some of it, but not most of it, was debt that was actually accrued by both my parents jointly, but most of it was debt related to a business my mother operated independently of my father. Now, my father is wondering if he can be held responsible for paying it.

Let me say also that we do have an appointment to speak with a lawyer, so we of course won't be basing any decisions on what people say here. But if anyone has had a similar situation, I'm wondering if you have any insight or perspective to share.

I've read that creditors can come after the estate in cases like this, but my mother didn't have an estate herself. Only the assets she and my father shared, that are now my father's alone. Can my father be sued to pay off my mother's debt?

Thanks.
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Guru Zim
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Since: 9.12.01
From: Bay City, OR

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#2 Posted on | Instant Rating: 8.69
Well, from an ethical standpoint, don't you just want to pay off the debts? I know it may seem unfair to your father to pay them, but he did participate at least tangentially in the decisions and lifestyle of the person who incurred them, even if he didn't have direct control.

That probably comes off as preachy and I don't want it to be. I just think people should pay their bills, even if there is a way to get out of them.




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Since: 3.10.02
From: Right side of the tracks

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#3 Posted on | Instant Rating: 1.63
    Originally posted by Guru Zim
    Well, from an ethical standpoint, don't you just want to pay off the debts? I know it may seem unfair to your father to pay them, but he did participate at least tangentially in the decisions and lifestyle of the person who incurred them, even if he didn't have direct control.

    That probably comes off as preachy and I don't want it to be. I just think people should pay their bills, even if there is a way to get out of them.


There's a local radio host, who's brother took his own life a few years back. The guy took a bit of time off, then came back on the air. A few months later, he was telling the story about how bill collectors were calling his family members trying to get them to pay his debts off. It just sounds like a shitty way to keep a dollar.

As for married people, a LOT of them are getting divorced in their last few years to prevent creditors coming after joint assets when end of life expenses are more than the couple's savings and/or insurance can cover. While it's not 'right' to game the system, I completely agree with it and have recommended my father do the same, as his wife is currently terminally ill.
DJ FrostyFreeze
Knackwurst








Since: 2.1.02
From: Hawthorne, CA

Since last post: 13 days
Last activity: 5 hours
#4 Posted on | Instant Rating: 6.97
Read it and weep, fella


My divorced & single mom died in 2004. When we called AT&T to cancel her cell phone, they told us to send them a copy* of her death certificate and they never asked about any due or past due charges owed to them. Same with her credit cards, but she didnt have many.

In all, I think 2-3 companies she owed money to wanted an original Death Cert and the other 2-3 accepted scanned/faxed copies to make her debts "go away". But in her case, I think all of her debt combined to be less than $2-3k.

*I forget which agencies wanted originals and which were ok with copies. Seemed like they were pretty used to the routine too. No one raised a stink or anything. They just told me where/how to send them and that was it.



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TheBucsFan
TheChiefsFan








Since: 2.1.02

Since last post: 39 days
Last activity: 39 days
#5 Posted on | Instant Rating: 7.40
    Originally posted by Guru Zim
    Well, from an ethical standpoint, don't you just want to pay off the debts? I know it may seem unfair to your father to pay them, but he did participate at least tangentially in the decisions and lifestyle of the person who incurred them, even if he didn't have direct control.

    That probably comes off as preachy and I don't want it to be. I just think people should pay their bills, even if there is a way to get out of them.


In a word, no, we don't feel obligated to pay them. I won't get into the details here, but essentially a vast majority of this debt was incurred in a way that had nothing to do with the rest of my family. My mother operated her own small business that predated her relationship with my father; she did it for pleasure and made very, very little money from it, so I'm not sure it's accurate to say the rest of the family benefited from it.

My mother didn't find some loophole out of these bills ... she died. And they are not my father's bills.
odessasteps
Scrapple








Since: 2.1.02
From: MD, USA

Since last post: 95 days
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#6 Posted on | Instant Rating: 4.97
Since i dont think it was mentioned, were they still married and/or together?

I can understand if they were separated that he wouldnt necessarily want to pay her debts, but if they were still "happily married," i dont see why he wouldnt now be responsible.

/said as a single guy thats never been married




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TheBucsFan
TheChiefsFan








Since: 2.1.02

Since last post: 39 days
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#7 Posted on | Instant Rating: 7.40
    Originally posted by odessasteps
    Since i dont think it was mentioned, were they still married and/or together?

    I can understand if they were separated that he wouldnt necessarily want to pay her debts, but if they were still "happily married," i dont see why he wouldnt now be responsible.

    /said as a single guy thats never been married



I don't think a person ceases to be an individual just because they have a family.

My parents were still married. They had debt that was in both their names jointly. This debt was separate in only my mom's name because it was used basically only for her personal uses as an individual.

A small amount of the debt in question was actually used to purchase some furniture for their house, and my dad has offered to pay that part off. That wasn't acceptable to the creditor in question, though.
TheBucsFan
TheChiefsFan








Since: 2.1.02

Since last post: 39 days
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#8 Posted on | Instant Rating: 7.40
Her creditors knew she was married. If they planned to hold my father accountable for my mother's debt, they should have insisted that the credit be offered in both their names instead of only my mother's. I think this is an inherent risk in becoming a creditor.
AWArulz
Knackwurst








Since: 28.1.02
From: Louisville, KY

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#9 Posted on | Instant Rating: 5.07
My first question: did your parents live in a community property state? In community property states, credit accounts opened during marriage are automatically considered to be joint accounts.

There's like 9 or ten community property states, I think. California is one, I know. But I think it doesn't matter whose name it was in in a community property state, it is in both names legally.



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Kishke








Since: 31.7.07
From: Leesville SC

Since last post: 856 days
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#10 Posted on | Instant Rating: 1.84
http://wills.about.com/od/howtoavoidprobate/a/probatebills.htm

Of course you are correct that you need a local attorney to explain exactly what happens, as states can/are different. It may or not have to go to probate, depending on many factors.

Probate does protect the creditors (allows them a chance to get paid) but it also protects you (prevents companies from x number years down the road from going after you, and it allows her name and assets to be transferred).

Sorry to hear the passing away of your mother, my Dad just died two weeks ago, but we are grateful that everything is pretty much taken care of, as we were able to pay off his debts and have the means to pay off any other bills that will come up (life insurance).
Lise
Mrs. Guru








Since: 11.12.01

Since last post: 386 days
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#11 Posted on | Instant Rating: 10.00
I am sorry for your loss.

As others have stated it will depend on state law, how she had her business set up and on individual creditors. The first two determine if they can attempt to collect debts and the third if they will pursue it.
JayJayDean
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Since: 2.1.02
From: Seattle, WA

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#12 Posted on | Instant Rating: 7.98
    Originally posted by TheBucsFan
    My mother didn't find some loophole out of these bills ... she died. And they are not my father's bills.


Mrs. JJD has credit cards that are only hers to a couple of department stores. If something happened to her...good luck to them trying to get ME to pay them off.



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ekedolphin
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Since: 12.1.02
From: Indianapolis, IN; now residing in Suffolk, VA

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#13 Posted on | Instant Rating: 3.12
I'm sorry for your loss, too.

Yeah, if my mother were to pass away (she's relatively healthy right now, I'm glad to say), trying to get me to pay her debt would be like getting blood out of a rock.



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Zeruel
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Since: 2.1.02
From: The Silver Spring in the Land of Mary.

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#14 Posted on | Instant Rating: 6.24
    Originally posted by TheBucsFan
    H most of it was debt related to a business my mother operated independently of my father.


It has been about 10 years removed from my accounting classes, but how the company was formed will impact the liability.

Was it a sole proprietorship? If so, being a unlimited liability setup, your father is probably on the hook for it. If it was a LLP or LLC, being a limited liability, only the businesses assets are at risk to settle the debt, not personal finance.

Meaning, if it was a sole proprietorship, your dad could "lose the house", so to speak, if he was sued by creditors to recover the debt. The business' debt is your own personal debt. That can not happen in the case of a LLP or LLC where the business is a separate legal entity.



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