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Started By
Message
Legal / Debt Question: LA Debt after death
Posted on 7/21/23 at 11:45 am
Posted on 7/21/23 at 11:45 am
Friend of mine is dealing with this, and I don't have an answer, so I was hoping some of you might.
Louisiana residents. Friend's mom and dad did not have a seperate proeprty agreement, so everything was community property.
Dad had a business that was NOT in an LLC or other seperate legal entity. Appears he was operating as a DBA under his SSN. No employees. Filed Sch C for tax returns.
Dad dies. A few months after dad dies, letters and calls start showing up looking for dad. Supposedly unknownst to mom, dad was racking up pretty significant credit card bills in the name of the DBA business / dad's credit report history, using Dad's SSN I guess. Seems like Dad was making the min payments on them. It does appear that the business charges do have some business purpose to them.
There aren't really any assets in the business that can be sold to pay off this debt.
Two questions:
What is mom's legal exposure to the debt? Are DBA debts considered community debts and thus enforceable to mom?
Absent a lawsuit, is there any way mom's credit report can be damanged if she tells the CC companies she ain't paying?
I've told them that at some point they will probably need to hire an attorney, but I'm trying to help guide them to start off with.
This just seems like a really messed up situation.
Louisiana residents. Friend's mom and dad did not have a seperate proeprty agreement, so everything was community property.
Dad had a business that was NOT in an LLC or other seperate legal entity. Appears he was operating as a DBA under his SSN. No employees. Filed Sch C for tax returns.
Dad dies. A few months after dad dies, letters and calls start showing up looking for dad. Supposedly unknownst to mom, dad was racking up pretty significant credit card bills in the name of the DBA business / dad's credit report history, using Dad's SSN I guess. Seems like Dad was making the min payments on them. It does appear that the business charges do have some business purpose to them.
There aren't really any assets in the business that can be sold to pay off this debt.
Two questions:
What is mom's legal exposure to the debt? Are DBA debts considered community debts and thus enforceable to mom?
Absent a lawsuit, is there any way mom's credit report can be damanged if she tells the CC companies she ain't paying?
I've told them that at some point they will probably need to hire an attorney, but I'm trying to help guide them to start off with.
This just seems like a really messed up situation.
6
Posted on 7/21/23 at 12:02 pm to LSUFanHouston
Curious what the outcome is here. My dad has an LLC and has a loan on the LLC. I'm almost certain he signed a personal guarantee on it. So if that's the case, he is in the same boat your mom is in best I can tell.
My non-legal guess is that the debt comes out of the estate. Don't think they can go after the house or anything, but they can probably file a lien. Someone smarter than me will correct that if it's wrong though.
My non-legal guess is that the debt comes out of the estate. Don't think they can go after the house or anything, but they can probably file a lien. Someone smarter than me will correct that if it's wrong though.
Posted on 7/21/23 at 12:25 pm to LSUFanHouston
I am not going to give you legal advice, but I will give you some practical advice whether the credit card debt is owed out of your father's separate estate or the community assets. The credit card company will negotiate with you. I had to negotiate with the credit card company after my father's death. I sent them the list and value of the assets in his estate and gave them a figure we were willing to pay that was a little less than 20% of the total. They took it. When the time comes, try making them an offer. They don't really want to go after a widow's assets unless they think you are being unreasonable or duplicitous.
Posted on 7/21/23 at 1:58 pm to vistajay
quote:
hey took it. When the time comes, try making them an offer. They don't really want to go after a widow's assets unless they think you are being unreasonable or duplicitous
I do think a negotiated resolution here would be best, but the guy's mom seems hell bent against this. I'm guessing this is mostly emotional anger and maybe cooler heads would prevail at some point.
Posted on 7/21/23 at 4:14 pm to LSUFanHouston
quote:things like this definitely seem like an older generation thing. (Hiding stuff from the wife, hiding stuff from the husband ) I mean, my wife and I know everything about each other financially.
Dad dies. A few months after dad dies, letters and calls start showing up looking for dad. Supposedly unknownst to mom, dad was racking up pretty significant credit card bills
Posted on 7/25/23 at 1:04 am to LSUFanHouston
These folks need a lawyer. If dad is dead, a succession needs to be opened. That is the best way to handle resolution of the dad’s debts. If mom doesn’t open it, the creditors will eventually once they learn that dad is dead.
The problem for mom is CC art. 2345. The creditors have a right to satisfy a spouse’s separate debts from the community assets.
Anyway, sounds like a real mess that the succession attorney will need to clean up.
The problem for mom is CC art. 2345. The creditors have a right to satisfy a spouse’s separate debts from the community assets.
Anyway, sounds like a real mess that the succession attorney will need to clean up.
Posted on 7/25/23 at 8:12 am to evil cockroach
quote:
things like this definitely seem like an older generation thing. (Hiding stuff from the wife, hiding stuff from the husband ) I mean, my wife and I know everything about each other financially.
You hit the nail on the head with my parents for sure. Wife and I have the same bank accounts and don't keep money from each other. Mom and Dad, my lord there are some discrepancies.
Posted on 7/25/23 at 9:34 am to WhiskeyThrottle
Just happened to my mom a year or so ago (Louisiana). Dad had no assets in his estate, they had a house with very little equity etc etc. Dad ran up some credit card debt we didn’t know about. Told my mom to basically tell the credit card companies to pound sand. They’re not going to spend the money to come after a dead persons estate with no assets and poor credit. The calls eventually stopped when I told her what to say.
Posted on 7/25/23 at 10:55 am to evil cockroach
quote:
my wife and I know everything about each other financially.
Maybe you do, maybe you don't.
Posted on 7/26/23 at 6:47 am to LSUFanHouston
I’m gonna guess the debts were related to toys and truck stuff the business owned and he used?
How much are we talking in relation to her net worth? As said you can almost always do a serious negotiation and offer.
Even in an LLC, with a small business you will almost always have to have a personal guarantee. In single owner operated businesses LLC’s really do a lot less legally than people think.
How much are we talking in relation to her net worth? As said you can almost always do a serious negotiation and offer.
Even in an LLC, with a small business you will almost always have to have a personal guarantee. In single owner operated businesses LLC’s really do a lot less legally than people think.
Posted on 7/26/23 at 10:11 am to evil cockroach
quote:lol
my wife and I know everything about each other financially.
Everyone thinks like this until they find all of their spouses hidden money after death
Posted on 7/26/23 at 11:25 am to baldona
quote:
How much are we talking in relation to her net worth? As said you can almost always do a serious negotiation and offer.
I don't know enough about their wealth to know this. I'm sure it would not wipe her out, but it's probably not peanuts either.
I do believe at this moment the wife is being more emotional than rational.
Posted on 7/26/23 at 11:26 am to Riverside
quote:
These folks need a lawyer. If dad is dead, a succession needs to be opened. That is the best way to handle resolution of the dad’s debts. If mom doesn’t open it, the creditors will eventually once they learn that dad is dead.
The problem for mom is CC art. 2345. The creditors have a right to satisfy a spouse’s separate debts from the community assets.
Which could mean a judgement, right?
Wife seems like she doesn't want to pay unless it would show up on her credit report. But if a judgement is entered against the wife (via the community) then that would show up on her record, right?
Posted on 7/26/23 at 12:46 pm to LSUFanHouston
I’m not an attorney but this post is correct. Mom has to open succession up in LA.
I would bet $25 that none of the creditors will go to the extent of filing a judgement against your mom. It would hit credit though.
As mentioned, my mom opened and closed succession, sent letters to dads (unsecured) creditors telling them to pound sand and two years later it’s been crickets. Her credit is still at 790.
I would bet $25 that none of the creditors will go to the extent of filing a judgement against your mom. It would hit credit though.
As mentioned, my mom opened and closed succession, sent letters to dads (unsecured) creditors telling them to pound sand and two years later it’s been crickets. Her credit is still at 790.
This post was edited on 7/27/23 at 11:57 am
Posted on 7/27/23 at 11:46 am to LSUFanHouston
If she had no part of the financial irresponsibility and the card was tied only to deceased husband’s SSN, tell them to pound sand.
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