# Creditor problems, need advice!



## 'CuseGal (Feb 5, 2015)

My sister and I share a home and have 5 kids between us. I am divorced, she was in the middle of a divorce, but her husband died suddenly. They had not been living together for several years or even in contact with each other. He rarely even saw his kids.

She is starting to get hounded by creditors. Apparently her late husband was running up TONS of debt while they were separated - most of which was expensive gifts to a girlfriend that my sister didn't even know about. In fact he was actually engaged to the other woman even though the divorce was not final. Sister and the "fiance" only found out about each other at the funeral - it wasn't very pretty, especially for the kids. He had told the other woman that he was divorced and that he didn't see his kids because his horrible ex wouldn't let him. She utterly freaked out when she found out that he was still legally married and so did a lot of other people who showed up at his funeral - people who were a part of his "other" life that he had told all sorts of lies to.

Well, it would appear that he was THOUSANDS of dollars in debt that my sister had ZERO knowledge of. He certainly wasn't giving her much, the reason we moved in together was because he stopped making mortgage payments on their home and she got foreclosed on last year. The so-called fiance has all the stuff that he bought and is refusing to give it up, but the creditors are coming after our family for the money. This includes a $2000 diamond engagement ring the other woman refuses to hand over.

We've already decided we're going to let his SUV, boat, and RV get repossessed. He's already destroyed my sister's credit rating with the mortgage foreclosure and she's at a point of not caring if it gets destroyed even worse. But, we're wondering if she has any recourse against the creditors other than bankruptcy, and can she legally force the other woman to hand over the gifts that my late brother-in-law really had no right to give her with money that should have been going to his wife and kids?

There won't be any money from his estate. They've managed to locate one life insurance policy and it's going to be about enough to cover the funeral costs. He lived in a rental, owed more on his vehicles than they were worth, and so far they've found at LEAST $30,000 worth of credit card debt. My sister and I are supporting ourselves and 5 kids on her income ($600/mo), my income ($800/mo), and combined child support ($800/mo) between us so if she is responsible for these debts we are going to be in a lot of trouble financially. I know she'll be getting social security for herself and her kids but that's going to take a while and the creditors are already starting to get nasty. And if the estate settlement drags on like the ones I've seen in the past, it could take 1 to 2 years to get settled. Can she just tell his creditors they'll have to wait, or is she legally responsible for the bills because their divorce hadn't yet finalized? What could they possibly take away from her if she doesn't pay up? Our parents own the house we live in, and so that can't be touched, but what about her minivan? And can they come after her social security when she's going to need it so desperately just to get by without any future child support?


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## PBear (Nov 16, 2010)

She needs to talk to a lawyer. Or a financial bankruptcy advisor.

C


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## Happilymarried25 (Mar 19, 2014)

If she didn't sign for the credit cards then she shouldn't be liable for them. His estate is so if there is any money then they should be paid from that money. If there is no money in the estate then I would send the creditors a copy of his death certificate explaining that he died and left no money so they won't be getting paid. Odds are they will still try to contact her but just tell them he passes and hang up on them.


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## Yeswecan (Jul 25, 2014)

I suggest she find a credit counselor. The counselor can contact the creditors and explain the situation. Get on a re-payment for some. Others they might be able to relieve her of the debt in total. In other words, there was separation of marriage and finances. This is provable with paperwork. Therefore she is not responsible for his credit card bills.


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## Yeswecan (Jul 25, 2014)

Happilymarried25 said:


> If she didn't sign for the credit cards then she shouldn't be liable for them. His estate is so if there is any money then they should be paid from that money. If there is no money in the estate then I would send the creditors a copy of his death certificate explaining that he died and left no money so they won't be getting paid. Odds are they will still try to contact her but just tell them he passes and hang up on them.


Only issue is her H might have been using her SS number to get cards. However, without positive proof that the creditors need to come up with they do not have a leg to stand on. 

A buddy of mines dad passed away. The IRS called as his father W as he owed back taxes. My buddies mom gave the IRS caller the new address where her H could be located. It was the cemetery. The IRS never called again. 

Tell the creditors that the H has passed. Can forward a cert of death if needed. There is no estate. Harassing calls will not be tolerated.


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## PBear (Nov 16, 2010)

Happilymarried25 said:


> If she didn't sign for the credit cards then she shouldn't be liable for them. His estate is so if there is any money then they should be paid from that money. If there is no money in the estate then I would send the creditors a copy of his death certificate explaining that he died and left no money so they won't be getting paid. Odds are they will still try to contact her but just tell them he passes and hang up on them.


Imho, there's too many variables to make blanket statements like this. Like whether they legally filed for separation (or if that's even an option, in her location), in particular. 

C


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## 'CuseGal (Feb 5, 2015)

This is New York so it's a communal property state.

There was no legal separation. She got an order of child support when he first moved out, through the family court system. Then she made the mistake of letting him be the one to file for divorce, and he took his sweet time about doing that. I'm guessing he only did file finally because he wanted to marry this other woman.

Am I correct in thinking she's going to have to take the "fiance" to court in order to get anything out of her? Part of me feels sorry for the other woman, she at least says she had no idea he was married, but at the same time, now that she knows, seems like she would want to do the right thing and make sure my sister doesn't end up with bills for things that she (the fiance) owns. Although she's obviously NOT a nice person, she was quick enough to tell my sister that if she was still his wife legally, she could handle the funeral expenses on her own and not to expect her to contribute to them.


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## PBear (Nov 16, 2010)

'CuseGal said:


> This is New York so it's a communal property state.
> 
> There was no legal separation. She got an order of child support when he first moved out, through the family court system. Then she made the mistake of letting him be the one to file for divorce, and he took his sweet time about doing that. I'm guessing he only did file finally because he wanted to marry this other woman.
> 
> Am I correct in thinking she's going to have to take the "fiance" to court in order to get anything out of her? Part of me feels sorry for the other woman, she at least says she had no idea he was married, but at the same time, now that she knows, seems like she would want to do the right thing and make sure my sister doesn't end up with bills for things that she (the fiance) owns. Although she's obviously NOT a nice person, she was quick enough to tell my sister that if she was still his wife legally, she could handle the funeral expenses on her own and not to expect her to contribute to them.


I doubt the fiancé will owe anything. And I doubt a legal battle will do anything other than make the lawyers rich. But your sister should talk to someone asap. 

C


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## Yeswecan (Jul 25, 2014)

'CuseGal said:


> This is New York so it's a communal property state.
> 
> There was no legal separation. She got an order of child support when he first moved out, through the family court system. Then she made the mistake of letting him be the one to file for divorce, and he took his sweet time about doing that. I'm guessing he only did file finally because he wanted to marry this other woman. * But the case is she was separated, different living address and receiving child support. IMO, this is enough to relieve her of any financial burden imposed by the creditors. Again, a credit counselor would be best to seek out. *
> 
> Am I correct in thinking she's going to have to take the "fiance" to court in order to get anything out of her? *Nah...OW will bolt.* Part of me feels sorry for the other woman, she at least says she had no idea he was married, but at the same time, now that she knows, seems like she would want to do the right thing and make sure my sister doesn't end up with bills for things that she (the fiance) owns. *Ha...OW will dump and run. She does not care one bit about the financial situation.* Although she's obviously NOT a nice person, she was quick enough to tell my sister that if she was still his wife legally, she could handle the funeral expenses on her own and not to expect her to contribute to them. *Yep, throw you under the bus when it comes to shelling out cash. *


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## arbitrator (Feb 13, 2012)

*A credit counselor or lawyer can stop the harassing phone calls and threatening letters for good! Additionally, a lawyer can file contingency countersuits against the creditor as they are on a very short leash, federally speaking! Creditors legal departments generally do not like putting up with those pesky countersuits!*


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## FormerSelf (Apr 21, 2013)

As for items to be repossessed (SUV and stuff)...there is chance that your sister will still be responsible for some of the remaining balance of repo'd stuff depending on what dealer decides to do keep it, auction, etc. If she is financially responsible for them, she may do better by selling them on her own to pay off the loans. Get more info from dealers.

Concerning the credit cards, you _could_ go after the items that sister's ex bought for himself and his home...as it would be considered a part of his estate which fiancee has no right to claim (although she may try. Did they live together?). HOWEVER I think the fiancee's ring (and all other gifts to her) would be considered a _gift_ and I don't think you would have a legal right to it, even though you are responsible for the balance. 

I would do a worksheet and list assets and what you think sister could get for them versus actual money that is owed, compare total of asset worth to how much she owes. It is a huge difference?? Enough to keep her in debt for years? Or do you think you could scrape enough cash after selling everything to start paying back collectors within a reasonable amount of time?

If she is way over her head, then I would suggest Chapter 13 bankruptcy. Being a single mom with kids (with no surviving father for child support) and poverty income keeps her well within the means test for bankruptcy. They will probably take whatever may be left of ex's estate plus anything of significant worth that belong to sister. They won't take her only car or other things that are necessary for daily life. But if she owns a 52 inch tv, it probably is getting loaded on the truck!

Once she includes all collectors and creditors on the bankruptcy list, the lawyer will contact them all...and they will no longer be able to contact her at all during bankruptcy process. Once court says okay, all requested items are surrendered and the court discharges any further responsibility to creditors. It would be pointless your sister to NOT list money she actually owed on her own...because the damage is done already.


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## DTO (Dec 18, 2011)

PBear said:


> Imho, there's too many variables to make blanket statements like this. Like whether they legally filed for separation (or if that's even an option, in her location), in particular.
> 
> C


Here in CA, I believe that separation is effective as soon as one spouse moves out.

To the OP:

Has your sister applied for SSI survivor's benefits? Presumably her ex was working somewhere and paying into Social Security. Now that he has passed, his kids are entitled to benefits based on the amount he paid in but now (obviously) cannot collect.


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## EleGirl (Dec 3, 2011)

I agree that your sister's best bet is probably bankruptcy at this point. If she does not go for the bankruptcy, that unpaid debt and collections will show up on her credit report and do as much damage as a bankruptcy would. The bankruptcy is a cleaner way to get all this taken care of.

I also agree that she should put into the bankruptcy anything outstanding that she might owe so that she is left with a clean slate going forward. 

She should pull his credit reports from at least the 3 major credit reporting agencies to make sure that she knows everything that is on it and include all of that in a bankruptcy. 

After she pulls the credit reports, she will want to contact the credit agencies to find out how to report his death to them. Usually it's something like sending in a copy of his death certificate. I know we did this when my mother passed away. The reason for this is that some criminals steal the identity of dead people. So someone could use his social security number, run up more debt. If his happened, then she'd be stuck having to prove that the debt was made after his death by some identity theft. So make sure that she reports his death to the agencies.

She could also talk to the bankruptcy attorney about the engagement ring. Since it's a big money item, there might be a way to get it back. I'm not sure but wroth a try.


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## 'CuseGal (Feb 5, 2015)

Thank you, some useful info here.

As far as assets, it looks like we're going to need a lawyer/police to get into the apartment he was sharing with his fiance and see what might be there. It will probably be difficult to prove what was his and what is hers so I doubt we will be able to get much other than the vehicles. I don't know if we can take stuff just based on a credit card bill which obviously shows the place of purchase but not what the item was. However we do know about a large collection of NASCAR memorabilia he had while they were still living together and she would really like to get that because 
it should be worth quite a bit, he had a lot of signed items in the collection as he spent several years a while back working fire crew at our local racetrack and got to know a lot of the drivers.

My sister and I share pretty much everything in our house and a lot of it (like appliances and furniture) technically belong to our parents since they are letting us use this house fully furnished. We do have a couple of TVs, computers, video game systems, but it was almost all gifted to the KIDS by either MY ex or their grandparents. There's really not much else of any value at all. There is no credit card debt (we can't even qualify for the most basic credit cards) so the only debt is her minivan, which is actually in the name of an uncle who cosigned the loan for her.

There IS a trust fund/inheritance thing that her husband's father left for her kids. It's quite a bit of money but they can't touch it until the oldest is 21 and she's only 14. Can the creditors go after that? I'd hate to see them lose it, it's the only chance they'll ever have of going to college without ending up in massive student loan debt.

There's was also talk at the funeral that the fire department he worked for (and no, he did NOT die in the line of duty, he died from complications of uncontrolled diabetes) may do a fund raiser to help pay his bills/funeral expenses. But the fiance is sayng that money should go to her because she was the one who was part of his life while he was working there and the only one his co-workers even knew about. I'd rather see them not even do it than see the money go to her rather than his kids who have been living in poverty ever since he abandoned them!


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## Yeswecan (Jul 25, 2014)

'CuseGal said:


> There IS a trust fund/inheritance thing that her husband's father left for her kids. It's quite a bit of money but they can't touch it until the oldest is 21 and she's only 14. Can the creditors go after that? I'd hate to see them lose it, it's the only chance they'll ever have of going to college without ending up in massive student loan debt.


I do not believe creditors can go after a trust. I know in the state of MD a trust from inheritance is not taxable. Trusts are the one best vehicle to assure it is safe from taxes upon transfer to the beneficiary after death. It changes hands via getting this set up through is administering the trust. A few forms. Cert of death.


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## thefam (Sep 9, 2014)

Cusegirl, I pm'D you but could not tell if it went through.


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## FormerSelf (Apr 21, 2013)

Anything put on a credit card is basically an unsecured loan...card companies aren't going to be interested in the items...they are more interested in just getting paid. 

However, in a bankruptcy setting, the court probably would want to get their hands on items you didn't sell...or if you got money selling something, where is it? 

I don't know if sister has a working knowledge of the sports memorabilia and other valuable items in question, but I would prepare a list, so you can see if fiancee tried to stash some of it.

By the sounds of it, she has very little or no personal assets and not much for an income with dependents...I doubt, other than the vehicles and a few things that belonged to husband...there isn't much to surrender if you go bankrupt. 

When I had to go bankrupt last year after my cancer business, my lawyer told me to not pay them, don't bother talking to them, but if I do, give them lawyer number to contact. We got a few letters (keep them all!) and some collections calls that rang the phone sporadically between 8am and 8PM (the legal time that they are allowed to call), but once you file and lawyer sends out letters it gets real quiet.

The only hassle is all the paperwork. They will ask her to get credit reports from all three agencies TransUnion, Equifax, & Experian, thoroughly list every creditor (including all collection agencies) with amount owed and their contact info, all bills from creditors and collectors, present last 3 years' tax returns, breakdown of all income and all expenses, bank statements covering last six months from date of filing, and of course first and foremost, the fee which will include lawyer's fee and court filing fee. 

I think I paid my lawyer close to $1k, so you'll have to save that up. You can still meet with lawyer initially without them charging right away. A good bankruptcy lawyer will provide lots of education materials and complete list of what you need to provide before charging you. Once you get the stuff together, you say your ready to start filing and then they'll want the $$$ to proceed.

They will subtract expenses (your monthly bills plus your estimated living expenses, food, clothing, utilities, phone, etc) and see how much you have left over during the month...if anything. If it is just a few hundred bucks the court will usually greenstamp it, but if there is a lot of surplus cash, lawyer may suggest Chapter 7 (take assets plus pay monthly amount for 3 OR 5 years. I doubt this in your case.). 

You usually file (then stay in contact with lawyer on occasion to answer questions they might have or update file which is free UNLESS you add a creditor to discharge list, then they may charge $100), then wait 30 days for court date (and take a couple mandatory online courses...they are only a few hours each), then in court, the Trustee asks if everything that you filed is true and accurate and that you understand the process, you say yes and then you wait (can't remember if it was 2 or 3 months) until your lawyers says debt have been discharged. You get a document that you keep forever...and chap 13 bankruptcy stays on credit report for 7 years.

Hope this was informative.


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## EleGirl (Dec 3, 2011)

'CuseGal said:


> As far as assets, it looks like we're going to need a lawyer/police to get into the apartment he was sharing with his fiance and see what might be there. It will probably be difficult to prove what was his and what is hers so I doubt we will be able to get much other than the vehicles. I don't know if we can take stuff just based on a credit card bill which obviously shows the place of purchase but not what the item was. However we do know about a large collection of NASCAR memorabilia he had while they were still living together and she would really like to get that because
> it should be worth quite a bit, he had a lot of signed items in the collection as he spent several years a while back working fire crew at our local racetrack and got to know a lot of the drivers.


I wonder if you can find a stash of receipts with his credit card number on them. That would be pretty good proof of what he’s bought.

Does she have any pictures of items that he now has in the girlfriend’s place? That might help to identify them.



'CuseGal said:


> My sister and I share pretty much everything in our house and a lot of it (like appliances and furniture) technically belong to our parents since they are letting us use this house fully furnished. We do have a couple of TVs, computers, video game systems, but it was almost all gifted to the KIDS by either MY ex or their grandparents. There's really not much else of any value at all. There is no credit card debt (we can't even qualify for the most basic credit cards) so the only debt is her minivan, which is actually in the name of an uncle who cosigned the loan for her.


Do you and your sister have a lease signed with your parents that state that the place is leased to you furnished with an inventory of what belongs to your parents? That might not be a bad thing to do. Make one up and then get it notarized with all of you signing.

I actually doubt that any creditors are going to want the furniture and stuff in the house or that the court would order you to sell anything. In bankruptcy a person is allowed to keep a vehicle, a house of reasonable value (like not worth millions), and a reasonable amount of personal property. There is no reason that she should lose a vehicle or have to sell anything.



'CuseGal said:


> There IS a trust fund/inheritance thing that her husband's father left for her kids. It's quite a bit of money but they can't touch it until the oldest is 21 and she's only 14. Can the creditors go after that? I'd hate to see them lose it, it's the only chance they'll ever have of going to college without ending up in massive student loan debt.


IT his father left it to their children, then no the creditors cannot tough it. His father and his children are not responsible to pay his debt.



'CuseGal said:


> There's was also talk at the funeral that the fire department he worked for (and no, he did NOT die in the line of duty, he died from complications of uncontrolled diabetes) may do a fund raiser to help pay his bills/funeral expenses. But the fiance is sayng that money should go to her because she was the one who was part of his life while he was working there and the only one his co-workers even knew about. I'd rather see them not even do it than see the money go to her rather than his kids who have been living in poverty ever since he abandoned them!


Your sister need to go to where he worked and explain that he was married with children. That she is paying the funeral expenses, not the woman he was having an affair with. That he was not helping her financially. He left her to raise his children on her own. If they do a fund raiser than she needs the money because she is paying for the funeral.. they can pay it directly to the funeral home, graveyard, etc. And any funds left over could be put towards his children. The guys at the fire department will probably drop the whole fund raiser thing once they find out what a creep he was, but at least the girl friend/affair partner will not get the money.

Seriously, your sister has to get some gumption here.


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## Ynot (Aug 26, 2014)

The foreclosure already ruined your sister's credit. Filing bankruptcy will only help. Include everything that is owed to everyone - doctor's, loans, CCs, collections, past due utility bills what ever your sister owes to anyone. Creditors can not go after the kids' trust since it is the kids and not your sisters. As someone else said CC debt is basically unsecured debt, the court may ask about the stuff, just tell them the truth - she doesn't have it! 
As for his fiancée I don't know why there should be any hard feeling for her. She was being played every bit as much as your sister was. If anything just be glad that she is only his fiancée. At least your sister can place a legal claim on his SS and pension due to the fact that her marriage to him had never been legally dissolved. The fiancée has no claims to anything, let her keep the crap he bought her.
The hard feelings should be for the POS who died and left this mess in the first place. Hopefully his remains ended up in the city dump and he was consumed by wild dogs. He totally screwed your sister, his kids and his new fiancée.


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## 'CuseGal (Feb 5, 2015)

"Seriously, your sister has to get some gumption here."

He hasn't even been gone for a month yet. His death was totally unexpected. She and the kids are in absolute shock especially from the discovery that he apparently intended to remarry before the ink was dry on the divorce papers. To a woman he hadn't even bothered to introduce his kids to. Not to mention the discovery that he pretty much had a whole second life with people (co-workers, friends, fiance's family) that didn't even know he WAS married with children. This on top of the fact that our entire family is still reeling from my 27 year old brother's death in a car accident last summer. We aren't dealing with things too well right now.

We've got an estate attorney already and he is working on discovery of assets/credit. He said its probably going to take a while because my sister doesn't have any of the paperwork that would make it easier to start the process - bank statements, bills, credit cards, etc. This same estate attorney is already working on my brother's estate and 8 months later there are still creditors coming out of the woodwork. And when my uncle died in December of 2012, it was summer 2014 before the estate settlement closed! It's a much longer process than I ever would have thought, quite honestly.


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## Honda750 (Feb 12, 2015)

If they were still legally married at time of the husband death , she is responsible for the debts due to Marietal debts ........... I concur that she needs to see an attorney quickly


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## OLDERMARRIEDCOUPLE (Mar 13, 2015)

She needs to consult with an attorney.
Depending on the state EVEN IF SHE WAS MARRIED AND NOT SEPERATED she may not be liable.


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## Thor (Oct 31, 2011)

She needs an attorney before she talks to anyone else.


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## turnera (Jan 22, 2010)

Have her go to CCC. They will chart out the best path for her.


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## RClawson (Sep 19, 2011)

She can talk to an attorney but honestly the creditors are up a creek. When I lost my business during the last recession I was eyeballs deep in debt. I looked at every angle, spoke with attorney's investigated bankruptcy and in the end I negotiated my own debt. Some of the creditors can be real aholes but so can I. I ended up paying about 33 cents on the dollar and on my negotiated terms. Some of the companies would not negotiate which was stupid because in the end they got nothing other than the opportunity to write off their debt. 

I do believe your sister has more of an upper hand than you both may believe. I would go very dark. They cannot contact her at work. And if they do get a hold of her just be a smart ass. She can explain the circumstances and say there is nothing to take (and it sounds like there really is not). 

Sorry if I do not sound real sympathetic with the banks but I am not. If you have any direct questions feel free to PM me.


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## OLDERMARRIEDCOUPLE (Mar 13, 2015)

Again contact an attorney.
Only an attorney will know the laws for your state.
You want an attorney that specializes in bankruptcy.
What I know from personal experience is that 
1 - Not all debt incurred in a marriage is carried over to the spouse. For instance did you know a check is a promissory note and that even on a joint account the person who signs the check is the only one liable BUT THIS DEPENDS ON THE STATE LAWS.
2 - Bankruptcy does not mean you will loose everything. There are exemptions.
3 - Not all debts can be cleared in a bankruptcy.

I could write and use up a lot of space with this, but only a qualified attorney will be able to really help.


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## ExiledBayStater (Feb 16, 2013)

If the loans aren't secured with property (car, boat, house, etc) and your sister didn't sign them, she doesn't need to take money from her pocket to make a payment. They may go after any assets owned by the deceased, and probably have a higher priority than funeral expenses.

Other than that, you and she really need to get some advice. I would bet a beer that she can throw out at least some of these bills without a second thought. Community property just means debts can be assigned in a divorce. Even then, the creditor does not get to come after the non-signing spouse directly. It would be up to the spouse whose name is on the loan to hold the other accountable for a breach of the divorce order.


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## Thor (Oct 31, 2011)

If your sister isn't aware of it yet, collectors are vultures. Don't believe a thing they say. They'll try to claim she owes debts even when they know full well legally she is not responsible. They don't care about anything other than collecting some $ from somebody.


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