The death of a loved one is always traumatic. The trauma can be compounded when you are faced with a reduction in the income needed to pay your bills and those incurred by your late spouse. Knowing which bills you are obligated to pay, and which debts should be forgiven by creditors, is important.
If you live in one of the nine states governed by community property laws you are equally responsible for any of your deceased spouse’s debts incurred after you were married. The nine community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.1
Debts that your spouse solely incurred prior to your marriage, such as student loan debt, are not considered as joint debt or community property. If your spouse owned property or received an inheritance before you were married, but didn’t keep that property or inheritance separate during your marriage, then those items are also considered community property.2
If you live in one of the 41 states governed by common law, generally speaking only the signatory-spouse (the spouse who legally agreed to pay back the debt) on the loan contract is liable for a particular debt.3 However, a living spouse may be liable for certain debts of a deceased spouse that are considered family necessities, (food, shelter, tuition payment for children), even if the living spouse did not sign for the debt.4 Be aware that if you co-signed a loan with your spouse, you would be responsible for the debt.
Also, if you are a joint account holder on a credit card, you would be responsible for the credit card debt. However, if you are listed on the credit card account as an authorized user you would not be held accountable for your spouse’s debt. State laws can vary and may require the person responsible for your spouse’s estate, the executor or administrator, to pay an outstanding bill out of property that was jointly owned by the surviving and deceased spouse.5
It is advisable to consult with a bankruptcy lawyer to determine the rules that apply in your particular situation, as some states have subtle variations in the way joint and separate debts are treated. There are also exceptions to community property laws that are individual to those nine states governed by community property laws. A bankruptcy lawyer that has experience in debt collection defense or Fair Debt Collection Practices Act is a good choice, especially if your spouse incurred a sizable amount of debt or an amount of debt which you don’t believe you can realistically repay.
Personal bankruptcy needs the skill of an experienced, knowledgeable, and compassionate attorney and Hines Law Bankruptcy Firm in Massachusetts has the services you need. We offer a FREE initial consultation so that we can better understand your circumstances and develop a solid plan of action beginning with whether filing for bankruptcy is the right choice and which form of bankruptcy best suits your needs.
Many personal bankruptcies are triggered by life events well outside an individual’s control and our lawyers provide clear and practical advice so that our clients navigate the realities of obtaining debt relief. Questions? Contact us for a Free Consultation.
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1 Am I Responsible for Paying Off My Deceased Husband’s Debt? by Stacy Francis, 11/28/2021
Link: https://www.msn.com/en-us/money/personalfinance/am-i-responsible-for-paying-off-my-deceased-husband-s-debt/ar-AARdHfA?ocid=msedgdhp&pc=U531
2, 4 Debt and Marriage: When Do I Owe My Souse’s Debts? by Bethany K. Laurence
5 Can I Be Responsible to Pay Off the Debts of my Deceased Spouse?, 8/28/2020
Link: https://www.consumerfinance.gov/ask-cfpb/am-i-responsible-to-pay-off-the-debts-of-my-deceased-spouse-en-1467/