Spousal Debt - How Best to Get Out From Under...

[StephenJon]

Recently, a relative passed away and left her spouse with a mountain of credit card debt.  It's basically about $700+/month just to pay the minimum payment across 13-15 cards.

They did have two houses, but relatives stay in one of them.  This house is owned outright.  The other carries a $200K mortgage that will also be due monthly.   I would think the best thing to do is sell one of the houses and get out from under the credit card debt immediately.

Does anyone have any advice on where to turn or if selling one of the houses is the way to go?  We think we've gotten all of the accounts rounded up, but we're looking for a way to work out of this debt.

Any help would be Greatly Appreciated!!

[FireMedic1]

@StephenJonWelcome. Were they all joint accounts or were they just AU's.

[SouthJamaica]

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@StephenJon wrote:

Recently, a relative passed away and left her spouse with a mountain of credit card debt.  It's basically about $700+/month just to pay the minimum payment across 13-15 cards.

They did have two houses, but relatives stay in one of them.  This house is owned outright.  The other carries a $200K mortgage that will also be due monthly.   I would think the best thing to do is sell one of the houses and get out from under the credit card debt immediately.

Does anyone have any advice on where to turn or if selling one of the houses is the way to go?  We think we've gotten all of the accounts rounded up, but we're looking for a way to work out of this debt.

Any help would be Greatly Appreciated!!

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He should consult with a lawyer. Normally he wouldn't be liable for his wife's credit cards.

[StephenJon]

There was a bunch just in the wife's name and those have been canceled and the debts forgiven, I believe.

Then the other bunch, still with quite a bit of debt were either joint or just in his name.

[SouthJamaica]

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@StephenJon wrote:

There was a bunch just in the wife's name and those have been canceled and the debts forgiven, I believe.

Then the other bunch, still with quite a bit of debt were either joint or just in his name.

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OK. So those aren't spousal debts, those are his debts.  As to those I would need to know more about his finances and credit profile. But of course if he owns 2 houses and doesn't live in both of them, selling the one he doesn't live in, and using the proceeds to pay off his debts, is certainly one valid way to go.

[OmarR]

I would also speak to a lawyer, and the sooner, the better.

For example, the deceased person's capital gain exemption on a main residence ($250K) still exists for 2 years after their passing. Depending on certain circumstances, state laws, and how much total debt is involved, the clock is ticking on making wiser, informed decisions sooner than later.

[Shooting-For-800]

Quit paying if the debt is assigned to the one passed away.

Then do the research for your state.

Joint accounts are a different story.

Even if the survivor has to pay out of the estate, there is still time to research and possibly negotiate.

[CLabuser]

a good clean method would be to probably open balance transfer cards to lower the interest charges throughout all the accounts.

it's a lot of legwork and stupid customer service calls but if you could transfer balances to new cards that offer 0% for atleast 12-18 months, you could shave down 150-200$ a month of interest and put that towards principal payments and pay stuff down. 

[NoMoreE46]

Are the houses in both the deceased's and surviving spouse's names or just the deceased's etc?  If both, then the capital gain exemption goes up to $500,000 on the primary residence  if all requirements are met. 

Paying An Estate or Probate attorney/Tax advisor is really the best course. 

I would not open any cards right now until getting professional advice.