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Two Perspectives of Mother’s Debt And Ways To Deal With It

Parents often incur debts to raise their child or even for a proper living which ideally is the responsibility of the parent to repay. There are two different and distinct perspectives to look at and deal with your parent’s debt. One situation may be when your parents are struggling with their debts and the other is when your mother or father passes away with debts left unpaid.

Life being uncertain can raise situations that are unexpected and unwanted. Well, when parents pass away you are in a unique position being second in line behind the surviving spouse. It may seem beneficial at times when it comes to the distribution of assets and accumulated funds. However, just like the assets the liabilities may be shared as well. So what do you do when your mother’s credit card debt still lies unpaid?

Check with the estate


If a mother passes away leaving a huge credit card debt behind for the children, there are several different ways in which the debt can be taken care of.

  • The first this to do is to check the estate. This is ideally the first entity to be considered responsible for your mother’s credit card debt. Therefore, check out with the estate created by the probate court after her death. According to the law, the probate court will instruct the estate administrator that all debts must be paid in full before distributing any assets to the beneficiaries. Therefore, you will get relief from your mother’s debt. However, if the assets available is not enough to pay off all the creditors a few may fall out of luck just as you as a beneficiary.
  • If you live in one of those states that follow community property laws, you can make the best use of it when your mother passes away with unpaid debts to deal with. These laws will vary from one state to another but most commonly it entrusts the responsibility of unpaid debt of a mother on the surviving spouse. However, if your dad is forced to declare bankruptcythen the credit card company will not get paid anything. Hence check these laws to save yourself from your mother’s debts.
  • The status of the co-owner will also play a significant role in your deceased mother’s credit card debt. If she was a co-owner of a credit card account with your dad then it is the responsibility of the dad to pay off the bills being the second party legally available for payment. Once again, if your dad declares bankrupt then the credit card company may fall out of luck.

All of the above situations will save you as a child having to deal with your mother’s debt.It is the estate that will deal with it or the assets of the surviving spouse will be used if the community property la ws are in effect. That means in nearly every case, the children does not have to worry about mother’s credit card debt after she passes away.

Helping mother with debt


On the other hand just like any other person your mother may also struggle with her finance while being in debt and knowing little or doing little to learn debt reliefoptions, especially if she is the single. In such a situation there are a few things you must know and do as well.

Right at the outset you must know that it is not your responsibility to share the debt burden of your mother unless you co-sign on any loan instrument. However, even though your mother’s money is none of your business, there are a few instances when you may find yourself on the hook simply due to her bad habits. Here are a few things that you can do when things become problematic.

No nest egg


In most of the times it is seen that single mothers do not have anything saved for their retirement. To prevent you from having to support her later encourage her to save now. Since it is her sole responsibilitybreak the ice this way:

  • Let her know about your finances so that she feels more comfortable sharing her details with you.
  • Ask about her futureplans and lifestyle and discuss how practically it can be achieved.
  • Suggest meeting with an advisor to help bridge the gap and provide tips and ideas about better money management.

Once you set the dice rolling look after and manage her finance to save yours and keep it intact.Follow a specific guideline for this.

  • Lay everything out and review every aspect such as budget, debt, assistance, and savings.
  • Get others involved in the discussion to keep all on the same page. You may even need to talk to a third-party financial advisor as well.
  • Get all wills and trusts in order and make sure that these are up-to-date. Consider consulting a lawyer for this matter as you may have to pick a power of attorney.
  • Check if there are any unnecessary expenses or overpayments in the budget and cut these short.
  • Ensure that there is a life insurance policy taken out and also check the portfolio if there are any investments made. Rebalance anything that is not appropriate for her age.

Make sure that you do not force these but suggest it as a plan of action as she might not be ready completely to take over her finances.

More than encouragement


Sometimes, your mother may need something more than encouragement to save. You may have to support her to stay away from debt. In such situations you must be prudent enough to save your finances.

If you lend then do so very carefully and ‘give’ it not expecting it back. If you give a considerable amount, know your tax obligation. You will also have to:

  • Set up an agreement
  • Come up with a schedule
  • Keep track of any payments made
  • Make sure it is not an ongoing thing
  • Prepare yourself for medical emergency expenses.

Lastly, if you have to settle anything then make sure that you do so outside of the system to get your mother out of debt.

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