Author Topic: My father and his debts... should I freak out?  (Read 4532 times)

SethBahookey

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My father and his debts... should I freak out?
« on: September 04, 2013, 07:31:39 AM »
Hello All,

I thought I'd ask this forum for some advice in regards to family issues with money. My father is seriously terrible with handling money. The man has made 6 figure for the past 20 years. Yet, last time I spoke with him, we talked about finance and he mentioned that he is over 200K dollars in debt from back taxes IRS and a million other things. Hell, he owes me 17K still from when I pulled out a student loan to help him with keeping his house (he ended up losing the house either way about 6 months ago...).

It's just sad and frustrating, but my SO and I were talking about him and what the future will hold for us when he passes away. Granted he is 61 so he still has plenty of time left here, but I don't think he will get any closer to paying off debts. BAH for Christ sake, he just sold his SUV that he almost had paid off and just got a new one, and by new one I actually mean an older SUV than the one he just sold. BUT in his justification he went from a Toyota to a Lexus and it has fancier features *SMH* what a dummy /rant...

Ok so anyways, when he does end up passing away. Will all those debts die with him or will I be completely fucked and end up having to take care of his mess up? If that's the case I might as well throw everything away and just start picking up his habits because I don't think I'd have a snowballs chance in hell trying to pay back all his debt. I don't know if this makes a difference but I live in Wisconsin and he lives in Illinois.

Any info is appreciated! Thanks

p.s. - oh yeah! i forgot.. when he got that new/older car. he took out a loan at 19% interest for it too. are you fucking kidding me?

GuitarStv

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Re: My father and his debts... should I freak out?
« Reply #1 on: September 04, 2013, 07:45:11 AM »
Your father won't leave you his debts if you haven't cosigned any loans and aren't on any legal documents related to those debts.  However, his reckless spending may well effect you.  As he gets older and more infirm he will need more and more expensive medical care.  This may end up being your problem, because let's face it, if your dad is sick and needs help . . . you're going to help him.

I'd consider paying for medical insurance for him as a hedge against future needs.

Mr.Macinstache

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Re: My father and his debts... should I freak out?
« Reply #2 on: September 04, 2013, 07:47:16 AM »
I don't see how his debt is your responsibility?

Frankies Girl

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Re: My father and his debts... should I freak out?
« Reply #3 on: September 04, 2013, 12:40:19 PM »
If there is anything at all left in his estate, then the creditors he owes can come after every last penny...  but you personally will not be responsible for paying off anything. I believe that they can even take property (house, car, antiques, etc), but you'd have to check into the laws in your state, since they can vary widely. But in all cases (unless you cosigned or the like) when whatever is left is gone, then they're SOL.

http://money.howstuffworks.com/personal-finance/debt-management/debt-when-you-die.htm

CNM

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Re: My father and his debts... should I freak out?
« Reply #4 on: September 04, 2013, 12:48:47 PM »
You shouldn't freak out unless you have co-signed on these loans, like other posters have mentioned. 

Are you really asking who is going to pay for your father's living expenses when he becomes too ill to live by himself?  That is a frequently-asked question on the forums and the answer boils down to, "It's up to you."

No Name Guy

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Re: My father and his debts... should I freak out?
« Reply #5 on: September 04, 2013, 01:43:12 PM »
This isn't legal advice - speak with a competent estate attorney in your (and / or your Fathers) state, laws and experiences vary greatly from state to state (with the NE states being particularly archaic in their estate laws and probate processes versus the western states).......

Having worked a long time ago in title insurance, I got to see quite a few probates.  I've also dealt with one as an executor.  The debts of the deceased are borne by the estate, to be paid out of the estates assets - the don't pass on (unless you were fool enough to take them on by co-signing - never, EVER cosign a debt unless you're willing to pay it off 100% yourself). 

If the assets of the deceased are insufficient to pay the debts, the estate will be declared insolvent (or what ever is the exact lawyer term) fairly early in the probate process.  Those that are the beneficiaries of the will / estate (kids, grandkids, etc, either named in a Will or per law if there was no Will) would get zilch, nadda, nothing in that case - everything would be sold to pay the debts first.  Oh, and if you're the executor, be sure you do your job by the book, especially if the estate is insolvent.  In my state, an executor can be held personally liable if they fail to notify creditors or try and shaft them - the attorney was crystal clear on this point.

yahui168

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Re: My father and his debts... should I freak out?
« Reply #6 on: September 04, 2013, 06:59:25 PM »

DocCyane

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Re: My father and his debts... should I freak out?
« Reply #7 on: September 04, 2013, 07:49:01 PM »
One thing you may have to watch out for is timeshares

http://www.inman.com/2013/02/19/inherited-time-share-can-be-nightmare-in-disguise/

Just because something is left to you in a will, that doesn't mean you have to accept ownership.

Disclaiming an inheritance is not as easy as just saying you donít want it. To be valid:

The disclaimer must be in writing, notarized and properly filed within 9 months of the decedentís death.

The person making the disclaimer cannot accept any benefits of the disclaimed property.

Finally, the disclaimed property must pass to another party without any direction of person disclaiming the interest.

jrhampt

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Re: My father and his debts... should I freak out?
« Reply #8 on: September 05, 2013, 11:28:41 AM »
Are you really asking who is going to pay for your father's living expenses when he becomes too ill to live by himself? 

This is the real issue, as far as I'm concerned.  I haven't yet decided how we're going to deal with this. 

For some reason my parents also have a time share (?!) which they are planning to pass on to us.  I'm not even sure it's paid off yet.