My Greatest Buddy Died. Is Her Husband Chargeable for Her Secret Debt?

Expensive Penny,

My greatest pal was just lately killed by a drunk driver. I’m serving to her husband type all the things out, and we’ve found she was hiding bank card debt. She additionally had a number of pupil loans he didn’t find out about. 

His identify wasn’t on any of it. Is he accountable for these money owed?

-Selecting Up the Items

Expensive Selecting Up,

What a mindless and heartbreaking loss. I’m glad the 2 of you’re supporting one another at this terrible time.

In all probability, your pal’s husband gained’t be liable for the cash she owed. When somebody dies with debt, the debt turns into a part of their property. Members of the family aren’t liable for paying it off, although there are just a few exceptions I’ll focus on in a second. If the property doesn’t have sufficient property to repay the debt — and I’m guessing your pal died with out a lot cash if she was carrying secret debt — collectors sometimes gained’t receives a commission.

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All that will get sorted out in probate courtroom. Nevertheless, some property keep away from probate altogether and go on to the individual listed as a beneficiary. For instance, in case your pal had a life insurance coverage coverage or a retirement account and named her husband as a beneficiary, the cash would go on to him. Collectors wouldn’t have an opportunity to assert these property throughout probate.

Now for these exceptions I discussed: Anybody who was a joint proprietor on an account or who co-signed can nonetheless be on the hook for a cherished one’s debt once they die. Clearly that’s not the case right here.

The opposite state of affairs the place your pal’s husband could possibly be accountable for this debt is that if they lived in one of many 9 states that observe group property regulation — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In group property states, collectors can go after somebody for his or her partner’s debt if it was acquired whereas they have been married.

This is applicable even when the partner was unaware of the debt. Nevertheless, collectors can’t sue somebody for debt their partner racked up previous to the wedding.

In case your pal’s husband has questions on whether or not he’s liable for any of this debt, he actually must seek the advice of with an legal professional. Remember that even when he isn’t obligated to repay it, he should get calls from debt collectors. If that occurs, he can ship them an authorized letter requesting that they stop contact. Collectors might nonetheless pursue claims in opposition to the property (or probably her husband if he’s in a group property state), however no less than that can squelch the flood of cellphone calls.

Her husband can also wish to notify the credit score bureaus of her loss of life. That manner, the credit score bureaus will flag her accounts and observe that she is deceased. He can report her loss of life to only one of many three bureaus, that are Equifax, Experian and TransUnion. He can accomplish that on one bureau’s web site. The bureaus will share this data with one another, so he solely wants to do that as soon as. Taking this step can stop id thieves from taking out further debt in his spouse’s identify.

My coronary heart goes out to you and your greatest pal’s husband. Hopefully, the monetary fallout gained’t be too sophisticated to resolve in order that her husband can deal with his grief.

Robin Hartill is an authorized monetary planner and a senior author at The Penny Hoarder. Ship your difficult cash inquiries to [email protected].

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