Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com.
Dear To Her Credit,
I just found out that I have six to nine months to live. I
have pancreatic cancer. I have about $11,000 dollars in credit card debt. I
have paid a large sum off, but I still have a balance. The card is in my name
only. The only thing my name is on is the deed to my husband's and my home.
Will my husband be responsible for the balance if I die
before it is paid off? We live in New York. -- Nicole
Dear Nichole,
I am so sorry to hear about your illness. In fact, it seems
harsh to even have to think about money when your life is on the line. The fact
that you are worrying about the debt your husband may be left with, however,
shows that you are a caring, considerate person. And taking care of financial
matters -- like it or not -- is one of the ways we take care of our families.
New York is not a community property state; it is an
equitable distribution state. That means debts run up during the marriage are
not presumed to belong to both of you. However, creditors could argue otherwise
if the debts were used for the benefit of both of you; for instance, if you
used the card for vacations you both went on, or to remodel your kitchen.
Most likely, your husband will not be responsible for your
credit card debt. However, when an estate is settled, assets belonging to the
estate are used to satisfy creditors, so the net effect can be much the same as
if he had been on the account. Only an estate planning professional can look at
your total financial picture and tell you how it's likely to play out in your
situation and in your state.
The best way to make sure your husband remains in good
financial shape is to manage your finances well during cancer treatment. Here
are six ways to make it a little easier:
Find out where you stand financially. Make a list of your
assets and a list of your debts. Then, using receipts and bank statements from
the most recent months, create a budget at current levels of income and
spending.
Create what-if budgets. Make another column to show how
your budget changes with reduced work hours, time off work and increased
expenses.
Get financial help. Where there's a need, there are caring
individuals and organizations who want to help. Ask your doctor, medical social
worker or hospital accounts representative what help you may qualify for. Also,
check out resources at the National Cancer
Institute website.
File a new Form W-4. Time off work and unreimbursed
medical expenses, including any medical travel expenses, can make a difference
in your tax bill. You and your husband probably need to change your income tax
withholding so you get more money in your paychecks now,
when you need it.
Consider getting a life insurance advance. If you have
life insurance, your doctor can sign a letter stating you qualify for an
advance, viatical or life
settlement.
Don't be shy about accepting help from friends and family.
There is an element of giving and receiving graciously. People want to help
you. Let them bring you food, take you to appointments or babysit. When they
say, "Let me know if I can do anything to help," they mean it!
There really are no words adequate to express sympathy at a
time like this, but you should know that we are thinking of you. Take care!
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: November 11, 2011
Three most recent To Her Credit stories:
Should one spouse take on full debt load? – A married couple with joint card debt wants to transfer the balance to a lower rate card. Should the better credit score spouse take on the burden alone? ...
Can you use dad's credit card when he's ill? – An adult child is taking care of her dying father and wonders about the legality of using his plastic to pay for bills and medical expenses ...
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