Expert: Michael Brotherton - 6/17/2008

Question
QUESTION: My mom passed away 11/29/07. I am an only child and therefore really have no one to help with these matters. My mom had cancer so there are a few outstanding bills, she has a car note that I am struggling to pay each month as it did not have the credit life insurance and I just received a notice from the probate court about a credit card debt from Chase for $4000+ dollars. My mom had a will, her house (worth about $35000) was willed to my son along with an antique car(not running, a fixerupper). She will me a car that she sold prior top her death and got the new one and of course what ever small trinkets and clothing, the contents of the house. My mom and I were avid flea market shoppers and bargain hunters, so the contents of the home are really not of much monetary value, only sentimental to me. Ok, so I did the probate thing, I have never signed on any of her debts but probate says that all claims "should be" satisfied before they can close the estate. I am really scared now that all of these medical bills will start coming in as well. My mom had $5000 of insurance of which fell short of her burial expense about $160 and that was cutting every corner I could. I wanted to keep her car for sentimental reasons, but the payments are stressing my finances that were already strained. How do I handle this so that we can get the estate closed? I cut up all her cards shortly after her passing and really did not open her statements since I thought this was not my financial responsibility. Please tell me how to get this resolved, this is really worrying me.

ANSWER: First, you do not personally owe on the credit cards but if there are assets that are not exempt they may have to be sold to satisfy any claims against the estate. If the car loan is straining your finances you may have to give up the car.

You may have to notify the creditors of the fact that there were few assets and no money and allow each of them to file a claim against the estate. The probate judge may require the home be liquidated or one of the Aires will need to pay the estate for the home. Funds from the sale may go toward the debt.

You may negotiate settlements on certain debt to reduce the amount of money that would have to be paid out from the estate. Some creditors may not even file a claim.

I am not an expert on probate so your probate courts will direct you to do certain things and some things you can do on your own. Anything you can do to reduce the obligations on the estate would be helpful but you cannot even negotiate with creditors until it is determined what is going to happen with the real estate or other assets because you wont know how much money they will bring.

Don't put so much pressure on yourself and take things in stride. There are solutions here. And I wouldn't be in a great hurry to close probate unless you are doing something with the real estate which requires the property issues be resolved.

I would need more information to be able to give specific direction. I hope this helps.

Mike


---------- FOLLOW-UP ----------

QUESTION: Thank you so much. Please elaborate on solutions. I live in South Carolina, and really do not want to sell my mother's house. Please tell me what are my options in that case.

Answer
You would need to consult with a probate attorney for specifics concerning this particular estate but one of the issues is the property. Depending on the claims against the estate you may have to pay the estate for the property or have an estate sale so that funds can be raised to satisfy the claims. This may require you obtain a loan. If the debts are minimal and your son is the direct aire he may still have to pay for the property. This is an area I would have questions. 1. Whether he has to pay for the property due to the claims against the estate 2. whether other property may be sold to liquidate the debt.

Again, you would need to seek counsel from a probate attorney for specifics. I do not have sufficient information concerning assets and liabilities of the estate to make any real determinations or give specific advice.

Try to put together a list of debts your mother owed -vs- tangible assets she owned. consider the cost of probate and attorney fees and see what the difference is. Be conservative on the values of items in the estate as you never know what things are really worth. The courts may also require an independent appraisal of assets. This would give you something to think about with regard to selling off the assets to satisfy the creditors. Again, you may negotiate with creditors to reduce the payoffs. I would be happy to assist here if you need help. Feel free to call me if you need direct assistance. 937 372 8581.

Mike