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Friday, March 11, 2011

Credit card debt that outlives Mom

If you're an executor trying to handle an estate that has debts, you must read this new article from The New York Times. It talks about who is responsible for debts and what has to be paid before beneficiaries receive their inheritances. Although this article is American, the legal situation is the same here in Canada. Click here to read the article.

I'd like to draw your attention to the part of the article that talks about collection agencies trying to convince you that you're personally responsible for debts, even when you're not. I know of many cases where collection agencies have tried this. If it's happening to you, find out your legal rights and stand your ground.


  1. What an interesting article. Thank you for posting for all to see, and more importantly, learn from. People need to be careful not to be bullied by debt collectors, and know their rights when it comes to their money situation, whatever it may be. A great tip when dealing with overwhelming debt is to prioritize and assess where you spend. Keep a journal if you need to. But overall know that it’s not the end of the world.

  2. Hi YourMoney,
    Thanks for your comment. Dealing with estate debts is a huge challenge for many executors, as it is for family members left behind.


  3. Hi Lynn,
    My husband is executor on my MILs estate. There was a home which needed to be sold due to the mortgages on the home. There was a small amount of money from the sale of the home, but not enough to cover all her credit card debt. How does my husband determine who is getting paid what? It is all unsecured debt, ie retail credit cards, etc. Is there a formula he must follow when figuring this out. We just don't want to end up personally responsible for the debt,. He is being pressured by some and not by others.

    1. Whatever happens, your husband is not going to become personally responsible for his mother's debts. An executor is not required to use his own money to satisfy estate debts, so rest easy on that part of it.

      If all of the debts are unsecured, the best thing your husband could do is work out how much is available on the dollar to the creditors proportionately. He can make them (all at the same time) an offer to take that amount on the dollar. If necessary, he can back up his offer by showing what is in the estate and what is to be paid. Almost every creditor will take something rather than nothing, and nobody wants to sue an estate where there is just nothing to get. Assuming they agree to the offer, he should be sure to get releases from them so that they don't try to come back at him later.


  4. Hi, my mother in law died of cancer last winter. She had no assets but about thirteen thousand dollars in credit card debt that she had carried for years. When we discovered this we noticed that she had also been making the credit insurance payment for around ten years after it had actually become invalid for cancer due to her age. She never realized that she was no longer covered and the insurance company kept charging her. The bank claimed the issue was the insurance companies. We now have a collection agent ohoneing us, wanting us to sue, or at least provide him with paperwork so he can sue the insurance company (or possibly the bank, (who also claimed he was calling on behalf of) - it's been over a year, I don't really want to get into a tug of war between the three of them. She died in hospice car in out home, and I would kind of like to move on. The fine print was pretty clear that it was her responsibly to cancel the payment, which seems scummy, but legal. Can we just ignore this guy, it seems he's making a hail Mary to collect the debt, to throw a lawsuit at one of the companies involved and hope they pay out to make him go away. We'd just like the issue to go away and not be in the middle.


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