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QUESTION: I hope you can help me. I live in Illinois (DuPage County). My mom passed away on August 12, 2013. She had two credit cards with approximately 3,000 on each. I am not on either of them. Her house is in a trust with me as the beneficiary (I am not on the mortgage or the deed). I still have a joint checking and savings with her name on it, payable on death. My question is: I cannot afford to make the payments on the cards--I am using the money she left to pay the mortgage until the home sells. Can the creditors debit my account or sue me personally? I know they can sue the estate, but I can't afford to pay the utilities, mortgage, as well as pay for my own home. I'd appreciate any assistance you can offer. Thank you.

ANSWER: If you are worried about a set off against the account that's not likely to happen unless the credit card is with the same bank that has the bank accounts. But if you want to be sure then just open a new account in your own name and move all the funds in there. Since you are on the bank account the funds should be yours.
I would suggest that you use the funds in the account for payment of the mortgage since that is one of your mothers debts. That would tend to avoid a claim that you took the money for your own use without using it to pay her debts. While it is always possible that the credit card company will pursue you later it tends to make that less likely.


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QUESTION: Thank you for responding so quickly. I will take your advice. I should have asked this question as well: Does the same apply to doctor bills? So far she doesn't have a lot of them coming in, but they are starting. Do I need to pay them? My concern is for the house--I don't want it to be forclosed on so I will continue to pay the mortgage. I suppose my other concern is when the house does sell, will I be forced to pay her debts, or do creditors typically not go through the legal hassle for a couple of thousand dollars. Thank you again.

Answer
The doctor bills are the same.  But the real problem is: if you can sell the house, will there be any equity left over for you after all her debts are paid?  If not, I'm not sure why you are doing all this work.  If you get the money, some of the creditors will pursue you.  Of course, all of them may not, particular the small ones.  Someone will need to help you with that question, and I suggest that you get it answered before you spend a lot of time on this project.  Of course, if you can pay all the bills out of the equity in the house, then what you are doing is worthwhile.

If there isn't enough money to go around, you could send out a letter to all the creditors and explain that you won't try to sell the house and it will be lost to foreclosure unless they agree to compromise their debt.  You could add up all the debt, figure what you are likely to get net from the house, and then make a reasonable offer.  The creditors really are in a pickle, because they can't act fast enough to get a judgment and sell the house before the house is foreclosed.  Anyway, it's a thought.

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Michael T. Hertz

Expertise

I can answer most questions concerning bankruptcy, whether business or personal, including questions by debtors, creditors, persons interested in purchasing assets from bankruptcy estates, and the like. Also have expertise in tort law, French and Canadian law.

Experience

Practiced bankruptcy for 27 years in California and taught bankruptcy for three years in Maine. This included Chapters 7, 9, 11, 12 and 13 cases, representing debtors, creditors (secured and unsecured), bankruptcy trustees, creditors committees, and persons interested in purchasing assets from bankruptcies. Debtors included persons with virtually no money up to large corporations.

Organizations
Inactive member of the Bar of the State of California. Nonpracticing member of the Bar of Massachusetts. Formerly member of the Maine Bar and conseil juridique in France. Certified by National Committee on Accreditation in Canada.

Publications
Georgetown Law Review; California Bankruptcy Journal; Maine Law Review; Dalhousie Law Journal; University of Toronto Law Journal.

Education/Credentials
Harvard Law School (J.D. 1970; cum laude) and Pomona College (B.A., 1967; cum laude)

Awards and Honors
Selected as a "Superlawyer" in 2005 and 2006 for Northern California.

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