A mother may carry a significant amount in debt, credit card or otherwise, and pass away. Unfortunate an event as it is, the fact that she left behind a considerable amount in debt for the kids is even more unfortunate. Moreover, while handling the estate if the kid finds that there is nothing significant is assets left behind apart from a mobile home worth then the liability of the debt of the mother seems to be overwhelming for the children.
A lot of questions may come up in the child’s mind such as:
- Who is responsible for paying up the debt
- What to do if a creditor call up and offers for debt settlement or
- How to deal with the debt collectors?
In such a situation the best thing to do is not to worry much and contact with a debt adviser for expert opinion.
The options available
Mother’s debt, no matter how big or small it is, is ideally not the responsibility of the kids to pay off. However, there are a few catches that you must be aware off before you decide to stop making payments thinking that your name was not on the credit card agreement, though it is the ideal way to respond.
- First it is required to make sure that you are not a joint owner of the credit card accounts. If so, then you are in no way responsible for the balances on the accounts.
- It does not even matter whether or not you are the authorized user of the account because as per law authorized users are not liable for making payments.
- If the creditors contact you and if you are the executor of the estate you must notify the creditors about your mother’s death and even offer to send a copy of the death certificate to the creditor as most creditors will demand for a certified copy of the same. Make sure that you have a lot more than a single copy of your mother’s death certificate as you may need it in different places and for several creditors that may come up later.
- Next up, if the debt collectors come to your house asking for payments then there is nothing to panic as well. The debt collectors will actually look for payment from your mother’s estate and not from you directly. If your mother had a will that goes through the probate courts then the collector can seek payment for your mother’s debt through her estate.
- In case your mother has very limited assets left behind the creditor may however choose to file a claim against the estate. In such situations the creditor will be at the bottom of the list of priorities when it comes to paying from your mother’s estate.
However, each state will have a specific time period within which such claims must be filed. Once this statute of limitation expires, there will be no claims to be paid by you for your mother’s debt.
Do not wait to be contacted
Ideally, after you mother’s death and realizing that she has left behind a considerable debt it is prudent not to wait to be contacted by the creditors. Instead, you should contact the customer service number on the account and make an offer to provide a certified copy of the death certificate.
- When you send the copy of the death certificate you must include a covering letter stating that the owner of the account is deceased. It must also be stated that the deceased has left behind no asset to pay the remaining balance of the account. If the balance amount is not much then the creditor may charge off the debt and not offer for debt settlement as debt settlement ratings in such cases is zero.
- Apart from that, you must also inform the credit reporting agencies about the death immediately. These agencies will update their records eventually using the Social Security information on their own. However, if you delay then there is a high chance of identity theft in the meantime. Therefore, be smart to notify the credit reporter which is perhaps the easiest thing to do to avoid troubles in the future.
Moreover, if you are an authorized user you must make sure that these charge offs does not wind up on your credit records. Pay close attention to this and if you find that such an error exists then you should immediately report it to the credit bureau and get it erased.
Steps to make the good use of it
To deal with debt calls for your deceased mother there are a few steps to follow to make the best use of the law that states that if you are not listed anywhere on her credit agreement you have no personal liability.
However, if you are a joint account user and want to settle the debt then you will need it to fall 90 days behind before you can get a reasonable deal. You will have to pay a significant amount as a lump sum for settlement and this settlement will result in a bad credit for your mother.
However, the entire scenario will change if you have a surviving father who owns a joint account with your mother. According to the law, if and only if there is a husband having a joint account and if your mother is a secondary user then your mother’s debt will fall on your father as common property law. Even in such situations there may be complicacies due to the nuances of the law.
Therefore, the best way to deal with debt whether it is your own debt or that of your mother is to contact an experienced debt adviser or a credit counseling agency. They will come up with suitable suggestions and advice you from their knowledge and expertise as to what you should do to deal with debts. Having extensive knowledge about the law, you will be prevented from taking any wrong step while dealing with the debt collectors.