I am a new member, and have a question for a close friend of mine. Here is his story.
He lives in a townhouse, which he paid about 300k for, that is now probably sellable at 200k based on recent sales.
He has no problem making payments on it, and he rents out one of the rooms to a tenant. No problems there financially for him.
However my friend has very little money in general at the end of a month because he accumulated a lot of debt from a medcial condition when he had no healthcare (was unemployed) and he used his credit cards to keep himself from going homeless so most of his earnings go to paying the townhosue and his debt each month.
His father died last month. There was no will. Right now I think the estate is in probate (?). The estate includes a house that could probably sell for 400k, a car that could sell for probably $500, and a van that could probably sell for about $4500. I believe this all goes to my friend since he is the only child and the mother was previoulsy passed. But as of now its all in probate and he cant touch anything to try to sell.
It turns out that his dad owes about $80k to creditors (house, credit cards, other debt, etc.)
Now my friend had very little money to begin with, and had to pay out of pocket for his dads funeral ($6k and now is assuming his dads debt).
Dad had no life insurace (self employed).
I understand that there is probably no way for my friend to get out of paying the mortgage on the house, but I thought I have heard that credit card companies dont always wont pursue debt in the event of a death? Is that true, and if so, what is the procedure? I am not sure the amount owed to credit, but obviously if its small to the cc company maybe they will not try to collect it from my friend?
My friend cant touch anything from the estate because its in probate, but the mortgage company is only giving him I think 1 month off before they expect payments.
Is there anyway that my friend can somehow get an extension on all these debts that he has inheirited from his fathers death?
I mean he is in a difficult situation in that he doenst have any excess money to begin with, and his fathers collectors are expecting payment (house and credit card).
Even if he wanted to sell off his dads assets right now he doesnt have ownership yet.
Is there anway he can get an extension or possibly even have some of the debts absolved (I thought I have heard this happening when a death is involved).
Eventually he has to sell the house, but its in disrepair somewhat, needs to be fixed, and then cleaned out and all his dads belongs nad stuff removed, so it will take some time, but they want their money very soon!
thanks for any advice, and please save the flaming!
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*forum tip* : You don't need to obfuscate your identity by referring to yourself as "my friend" when you are a new member. You have no past threads or posts for us to dig up or mock
From what I understand, the credit card companies can pursue getting their cut of your "friend's" estate after everything is settled if there's any equity in that house. It seems there may not be though.
First off, don't pay a dime to the mortgage company if the title is held soley by the father. It won't affect your friends credit either way, and will give you time to consider all option.
In general, if the title of the property wasn't setup to pass automatically (via Lady Bird Deed, trust, etc.), the estate will need to be probated. Through the probate process, letters will be sent to all known creditors and an article run in the local business paper. At that point, the creditor (CC company) must make a formal claim against the estate. The time probably varies per jurisdiction, but something like 4 months. If a claim isn't filed against the estate during that time, it is forever barred. The CC may or may not, depending on the prowess, file a claim. If they don't, they're out of the picture. Since the value of the property is something like $400k, and the total debt is only $80k...it doesn't seem to be a huge problem to pay off the outstanding debt anyways, but, your state might allow for exemptions that will supersede paying the CC debt ($10k or more).
I would talk to a probate attorney familiar with your local laws (or read them thoroughly yourself). And most importantly, don't pay a dime of money to anyone until everything is sorted out and you determine that you're legally bound to pay that creditor. Time and the law is on your side.
Oh, and you don't "inherit" debt. The inheritance you might have otherwise received might possible pay off creditors first, and you're left with what's remaining.
Also, likely the funeral expenses being paid are higher in priority than paying unsecured creditors, as they are essentially last in line...so you could get reimbursed sooner in this instance.
hatoraide said:*forum tip* : You don't need to obfuscate your identity by referring to yourself as "my friend" when you are a new member. You have no past threads or posts for us to dig up or mock
Who cares? For all that we care, whether it is himself, his friend, his alter ego, or his 4th personality, we don't care.
It's the internetz, boyz. No one knows you are a dog, or a bear on skates.
BetterBrainBureau said:hatoraide said:*forum tip* : You don't need to obfuscate your identity by referring to yourself as "my friend" when you are a new member. You have no past threads or posts for us to dig up or mock
Who cares? For all that we care, whether it is himself, his friend, his alter ego, or his 4th personality, we don't care.
It's the internetz, boyz. No one knows you are a dog, or a bear on skates.
Read up on the probate laws in the state where the father died and get an attorney. Porquin's post is great, and what he outlined for you is a very likely scenario. It will be required to put the ads in the paper, but it is also the responsibility of the executor (who seems to also be the sole beneficiary) to pay debts for the estate and pay out beneficiaries (himself). If it were proven that the executor knew of debts and still didn't pay, there could be legal challenges after the estate was closed. If you stand to have $300K after debts are paid, it only makes sense to pay them, and then never have to worry about it again. A good probate attorney will make this process go more smoothly, and in some states the fee is fixed (ex. $1500).
Thanks for the replies and the advice, esp Porquins. I will pass the info on to him...
Its rather negative/depressing that people assume that its my father who died, but maybe thats a fatwallet thing or some inside joke or common thing to say?
Since I am a newb here I will chalk it up to an inexperienced post on my part ;0
I just posted to try to get some info to pass onto a friend I have had for over 20 years, thanks to those who posted useful responses.
bahboy20 said:Thanks for the replies and the advice, esp Porquins. I will pass the info on to him...
Its rather negative/depressing that people assume that its my father who died, but maybe thats a fatwallet thing or some inside joke or common thing to say?
Since I am a newb here I will chalk it up to an inexperienced post on my part ;0
I just posted to try to get some info to pass onto a friend I have had for over 20 years, thanks to those who posted useful responses.Nah, don't worry about it. Most people here don't believe anything anyone says; but, of course, we're to believe that every one of them makes WAY over six figures...
bahboy20 said:Thanks for the replies and the advice, esp Porquins. I will pass the info on to him...
Its rather negative/depressing that people assume that its my father who died, but maybe thats a fatwallet thing or some inside joke or common thing to say?
Since I am a newb here I will chalk it up to an inexperienced post on my part ;0
I just posted to try to get some info to pass onto a friend I have had for over 20 years, thanks to those who posted useful responses.
Some of the people who lurk here in the Finance Forum are simply here to stroke their own egos. This is a guess, but I'd bet a dollar or two that some of them found out that when they began a subscription to fatandfurryXXXchicks.com, a day later their checking accounts got cleaned out by some industrious entrepreneur from Uzbekistan and they come here to mock others to compensate. Good advice from Porquin - just remember that probate law varies from state to state so your friend should be sure to hire a probate attorney. In some, maybe most, states, the fee for probating an estate is established, either by statute or by custom, as a percentage of the estate, so your friend probably won't need to come up with a retainer fee upfront to hire the probate lawyer since his/her fee will be the first thing paid when the estate is probated and liquidated.
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