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Debts & Probate

What are the options to consolidate debt and when my father passes. How will probate help?

My father has a terminal illness and I have started going through their debts to help my mother. Unfortunately they have alot of credit card debt and with the medical bills they are having a hard time paying all the bills. What are their options to consolidate this debt and when my father passes will the debt on those cards be forgiven if my mother is not on the cards?

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Bill's Answer
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If your mother does not live in a community property state, the unpaid debts would come out of the remainder of his estate if any in the probate process. (Follow the link I just mentioned to learn more about the probate process.) Because your mother is not on any of the cards with your father, she is not liable for repaying the debt. If the estate is not large enough to pay off the debt, the credit card companies must write off the debt. This may later create a tax liability with the state of residence and the IRS. In a hardship situation, many times relief can be obtained by waiving the payment of any tax on the amount of unpaid debt (considered as income). There are forms available to fill out for the IRS and the various state taxing authorities.

If she lives in a community property state, the debt may be considered her responsibility in the event that his estate cannot pay off the debt. Here is a list of community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If she lives in one of these states, she has four options:

  1. She may be able to negotiate directly with the credit card companies herself by claiming a hardship. This can be time consuming and tricky. The benefit is that she would not have to pay anyone to negotiate this for her.
  2. She may be able to claim bankruptcy, but the rules are much tougher now and the procedure is quite expensive. She may also have to repay the entire debt.
  3. She can consider credit counseling but she will end up repaying the entire amount.
  4. She may want to consider settling her debt through the use of experienced debt negotiators. Many times the payment and the debt size can be reduced dramatically. Find a service provider that offers a free consultation and will review all the options for you. makes it easy for you to apply for debt resolution help.

Thank you for your question.

Good Luck!

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(7 Votes)

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