What Do You Do if Your Wife Dies & Leaves You a Lot of Debt?

The death of a spouse is a devastating event. In addition to grieving, the surviving spouse must also deal with the financial affairs of the deceased spouse. If your wife died and left you a great deal of debt, it's wise to understand what options you have concerning that debt and what steps you can take to deal with it.

  1. Executors

    • When a wife passes away, the husband is often the executor or administrator of her estate. As an executor or administrator, you will contact her creditors and inform them of her passing. The proceeds from her estate are used to pay creditors. As a general rule, a surviving spouse isn't responsible for payment of a spouse's debt if those debts were only in the name of the deceased spouse. This is referred to as the "common law" property rule. If your wife died without sufficient funds to pay creditors, you will have to inform them of this. The creditor will write the noncollectable debt off as a loss against its taxes. Keep in mind that the common law property rule may have an exception in certain jurisdictions. This exception states that you could be responsible for your wife's debts if those debts were for family necessities, such as tuition for the kids, or food and shelter for the family. State law will vary on this point, however, so the best course of action is to consult with an attorney to see how your state's laws apply in your specific case.

    Other Exceptions

    • If you are a cosigner or joint borrower on the debt left by your wife, then you are responsible for payment of the debt and the death of your wife does not remove your contractual obligation to pay it. Furthermore, although the common law property rule applies in many states, that rule does not apply in community property states. In a community property state, a husband and wife are equally responsible for the debts accumulated during the marriage regardless of whose name the debt is in. Therefore, if you live in a community property state, you are responsible for the debts accumulated by your wife during the marriage even if the debts are solely in your wife's name. This means the creditors may be able to pursue you for payment of those bills. If you live in a community property state but your wife's debts were incurred prior to the marriage and are solely in her name, those debts are considered separate from the marriage and you are not responsible for them. Simply call the creditor, inform them of her passing and they will write it off as a loss.

    Solutions

    • If you have debt and are experiencing financial difficulties, it's a good idea to contact creditors directly and inform them of your financial situation. You may be able to work out payment arrangements that allow you to pay the debt off in a series of smaller payments if you can't afford to pay the total bill all at once. But the Federal Trade Commission cautions consumers to think twice before using a debt settlement company to handle their debt. The fees associated with this type of service may simply increase the amount of debt you owe and there's no guarantee the creditor will work with the settlement company. Contacting the creditors directly may be more efficient and cost-effective.

    Warning

    • Do not ignore the debt. Creditors often turn unpaid debt over to a collection agency and the agency will pursue you for payment. Under the Fair Debt Collection Practices Act, collectors can call you between the hours of 8 a.m. and 9 p.m. and can also call your job unless you tell them not to. The creditor or agency can decide to sue you for the unpaid bills and receive a judgment against you. Depending upon the laws in your state, the judgment owner may be able to garnish your wages, seize funds in your account or place a lien on property you own.

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