Credit card debt brings bad news for widow

Spendthrift husband dies, but someone must pay for charges
By: Ilyce R. Glink: Inman News
Q: A friend of mine, who is a resident of Illinois and Louisiana, was widowed after her husband's recent death. She now has discovered that he had an enormous credit card debt. Most of the credit cards are in her dead husband's name. She had nothing to do with the acquiring of these cards, nor did she spend any money on them. Is there any way she can be exempt from paying off the debt? Her name is on only one of the credit cards and she didn't even ask to be on it. The only thing they own together is a car dealership in Illinois, which hasn't sold as of this date.

The house that she left in Illinois is being sold and the closing is scheduled for the next few days. She is now living here in Ruston, La., and is about to begin making payments on the home here.

If you could advise me on this matter I shall dance at your next wedding, possibly bake you a grand cake and a Cajun etouffee. The magic words of "she does not have to pay" would set my heart a flutter and save this 78-year-old woman from a possible stroke.

A: First, it sounds as if your friend and her husband had some considerable assets. His share of those assets would have to be used to pay off the credit card debt before your friend could get what is left. The executor of the estate will have to find out what kinds of debts your friend's husband incurred and make a good faith effort to get them paid out of the estate monies.

Now, let's talk about your friend. If your friend was a co-signer to the credit card accounts, whether or not she had a card, then she is liable for the charges.

If your friend was not a co-signer, then she is not responsible. If she has a card in her name, it may be that her husband simply gave her a card, but remained the sole authorized signer on the account.

She needs to call the credit card companies and ask them to show her the authorizing documents. If she personally signed and put down her Social Security number, she probably is liable.

But she may also be liable for some of the debt if she benefited from anything that he bought with the cards, including a car, clothing, food, vacations, jewelry, etc.

Your friend needs some serious legal advice, preferably from a good estate attorney.

Thanks for your letter. I wish you and your friend a happy holiday season.

Q: I'm a 66-year-old man and former IBM employee (I still own every share I ever bought). I retired last year on disability, and have no dependents or heirs except for my 92-year-old mother, who is in fine health. I have tons of equity in my home, and I also own an investment property that is currently rented in Huntsville, Ala. What would be the downside or risks to my getting a reverse mortgage? Where would I find out about the costs and fees?

A: My first thought, after reading your letter, is why would this guy want to get a reverse mortgage? It sounds as though you have plenty of cash to live on. And if you want more money, you can start to sell your stock.

In general, a reverse mortgage is something you consider if you have no other alternative and want to stay in your property. They tend to be expensive, relatively inflexible, and they will eat up most of the equity in your property.

But perhaps that's what you're trying to do. You have no heirs or responsibilities, other than your mother, of course. So perhaps you're trying to follow the advice of some of the best-selling personal finance authors and the book "Die Broke."

If you are going to get a reverse mortgage, I urge you to do a little research. Try www.reverse.org, which is a Web site run by Ken Scholen, who originally helped formulate reverse mortgages. He has written an excellent book on the subject and now works for AARP, known as the American Association of Retired Persons. There is helpful information up on the Web sites of www.homepath.com (Fannie Mae's Web site, search for "reverse mortgage") and at www.HUD.gov.

You may also want to contact lenders in your area and request that they give you an itemization of costs that would be associated with a reverse mortgage.