‘I want the calls and letters to stop’: My mother died owing $17,000 in credit-card debt. The creditors want their money. Will I have to sell her house?
Dear Quentin,
Can you please assist me? I can’t afford a lawyer. My mom passed away in May from Alzheimer’s. I was her primary caretaker. In 2015, my mom created a power of attorney, healthcare directive and a trust. She left me her house in Fresno, Calif., which was not paid off.
She had six credit cards that she was paying off; however, they still owed $17,000 when she died. The creditors are calling, asking if I have a probate court date. I told them no. I don’t even know what that means. Can they make me sell my mom’s house to pay the creditors?
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Who initiates the probate court date? Am I responsible for paying her credit cards? I want the calls and letters to stop. I also want to avoid having to go to court. I would appreciate your much needed advice.
The Daughter
Dear Daughter,
Don’t tell your mother’s creditors anything.
It’s unlikely that these credit-card companies will attempt to put a lien on your mother’s house for a few thousand dollars, given that this $17,000 debt is split among several companies. These creditors may be doing their best to overwhelm you with phone calls and letters, hoping that you will pay them what your mother owed them, given your vulnerable state. It’s unclear whether there is even enough money in your mother’s estate to pay them off.
If your mother does have significant assets — that is, money in her bank and retirement accounts etc. — you should be able to pay a lawyer out of the estate. A trusts and estates lawyer will be able to tell you whether you have to file a probate case. In California, you will likely have to file probate if the estate is worth more than $184,500. That includes all assets that are not held in trust or passed directly to you upon your mother’s death.
“A money judgment is no longer enforceable after the death of the debtor except through probate and the creditor’s claim process,” says the Law Offices of Ronald P. Slates. An exception is a judgment lien secured against specific real property, which does not require a creditor’s claim if the creditor waives recourse against all other estate property. In other words? This is pretty much all you’ve got left before that judgment becomes a worthless piece of paper.”
Your mother clearly made preparations for her estate upon her death. She set up a trust; if that trust became irrevocable upon her death, it should be out of reach of the creditors. The same is true for assets — like bank accounts and life-insurance policies that were transferred to you upon her death. If the estate is large enough for probate and there was no will, the court will appoint an administrator if you are unwilling or unable to administer the estate.
The clock is ticking for these creditors, and they know it. “When a delinquent homeowner dies, there is a strict one-year statute of limitations to sue them or to continue a lawsuit against their estate,” according to Tinnelly Law Group in San Juan Capistrano, Calif. “This is true even if the statute of limitations would have been longer had the person survived.” You should focus on wrapping up your mother’s estate, and pay her property taxes and utilities.
The Federal Trade Commission also has strict rules on debt collectors. Among those rules: They can’t contact you before 8 a.m. or after 9 p.m. (unless you agree to it). You can also tell them not to contact you by email or text. “By law, family members usually don’t have to pay the debts of a deceased relative from their own money,” the FTC says. “If there isn’t enough money in the estate to cover the debt, it usually goes unpaid.”
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