Tying up card debt when death's near

To Her Credit columnist Sally Herigstad
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, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

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

Answer for the CreditCards.com expert

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:

  1. 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.
  2. Create what-if budgets. Make another column to show how your budget changes with reduced work hours, time off work and increased expenses.
  3. 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.
  4. 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.
  5. 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.
  6. 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!

See related: Does it pay to reduce card debt before death?, What happens to credit card debt after death?

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Updated: 01-19-2018