When your parents die broke

Blogger John Schmoll’s father left a financial mess when he died: a house that was worth far less than the mortgage, credit card bills in excess of $20,000_and debt collector s who insisted the son was legally obligated to pay what his father owed.

Fortunately, Schmoll knew better.

“I’ve been working in financial services for two decades,” says Schmoll, an Omaha, Nebraska, resident who was a stockbroker before starting his site, Frugal Rules. “I knew that I wasn’t responsible.”

Baby boomers are expected to transfer trillions to their heirs in coming years. But many people will inherit little more than a pile of bills. In my latest for the Associated Press, what to do when your parents leave behind debt.

Q&A: The reasons behind falling credit score

Dear Liz: Please explain to me how one’s credit depreciates. After paying off my home, my credit score went from mid-700 to mid-600. There were no changes or inquiries. I built it back up to 734, got into a tight spot and took a loan from my bank. I just checked the score again and now it’s 687. I have not been late or missed a payment. I thought keeping current on all payments and in some cases paying more would help, but it’s not. I need some help and direction.

Answer: We’ll assume that you’ve been monitoring the same type of score from the same credit bureau. (You don’t have just one credit score, you have many, and they can vary quite a bit depending on the credit bureau report on which they’re based and the formula used.)

Paying off a mortgage could have a minor negative impact on your credit scores if that was your only installment loan. Credit score formulas typically reward you for having a mix of installment loans and revolving accounts, such as credit cards.

But the drop shouldn’t have been that big. Something else probably triggered the decline, such as an unusually large balance on one of your credit cards.

Scoring formulas are sensitive to how much of your available credit you’re using, so you may be able to restore points by paying down your debt if you carry a balance or charging less if you pay in full each month. There’s no advantage to carrying a balance, by the way, so it’s better to pay off your cards every month.

Q&A: Can creditors get your IRA funds?

Dear Liz: You recently wrote that workplace retirement plans offer unlimited protection from creditors but that IRAs are protected only up to $1,283,025. When I transferred my 401(k) to a rollover IRA, the advisors at the brokerage assured me that the rolled-over money also enjoys the unlimited protection. Your article seems to imply otherwise. Can you clarify what is the correct rule?

Answer: Two sets of rules apply, which causes a fair amount of confusion.

In bankruptcy court, your transferred money would be protected. Money rolled into an IRA from a workplace plan such as a 401(k) enjoys unlimited protection from creditors in bankruptcy filings. Outside of bankruptcy court, however, creditor protection is determined by your state’s laws, which may not be as generous. If someone successfully sues you and wins a judgment, for example, your IRA could be at risk.

Wednesday’s need-to-know money news

Today’s top story: How debt settlement can make a bad money situation worse. Also in the news: Using an IRA as a legal, last-minute way to lower your taxes, 4 reasons why it’s smart to buy a used cell phone, and how to budget as a freelancer.

Debt Settlement Can Make a Bad Money Situation Worse
Not the perfect solution.

An IRA Is a Legal, Last-Minute Way to Lower Your Taxes
There’s still time for 2017 taxes.

4 Reasons It’s Smart to Buy a Used Cell Phone
Saving on new-to-you tech.

How to Budget as a Freelancer
Budgeting when income isn’t reliable.

Wednesday’s need-to-know money news

Today’s top story: What a travel agent can do for you that a search engine can’t. Also in the news: How one couple paid off over $200,000 in debt, 6 ways to weed out shady schools, and why your credit score may not be as good as you think it is.

What a Travel Agent Can Do for You That a Search Engine Can’t
More than just booking a ticket.

How I Ditched Debt: Setting Pride Aside and Asking for Help
One couple’s story.

6 Ways to Weed Out Shady Schools
Just because it has “university” in the name doesn’t mean it’s legit.

Why Your Credit Score May Not Be As Good As You Think It Is
So many scores.

Thursday’s need-to-know money news

Today’s top story: 3 ways debt settlement may not be the fix you expect. Also in the news: NFL great Eric Dickerson shares money and life lessons, where to find low-cost checking and the reason why most people get rejected for a personal loan.

3 Ways Debt Settlement May Not Be the Fix You Expect
What debt settlement companies won’t tell you.

NFL Great Eric Dickerson Shares Money and Life Lessons
Tips from the Hall of Famer.

Consumers Can Find Low-Cost Checking, Despite Bank of America Move
Alternatives to BoA.

The reason why most people get rejected for a personal loan
Know the score.

Friday’s need-to-know money news

Today’s top story: Cryptocurrency for beginners. Also in the news: How credit card rewards made a couple’s dreams come true, when to tell your partner that you’re in serious debt, and why you should get a new bank if you’re paying fees.

Cryptocurrency for Beginners: 7 Questions to Ask
Understanding the hottest money trend.

How Credit Card Rewards Made Their Dreams Come True
Building rewards with an ultimate goal in mind.

Ask Brianna: Should I Tell My Partner I’m in Serious Debt?
When it’s time to confess.

If You’re Paying Fees of Any Kind, Get a New Bank
Don’t pay for your banking.

Thursday’s need-to-know money news

Today’s top story: Whittle down your debt while having bad credit. Also in the news: 6 secrets from flight crews to stave off jet lag, what to buy every month of the year in 2018, and 3 ways you can better save for retirement.

Bad Credit? You Still Have Tools to Whittle Down Debt
You must be proactive.

6 Secrets From Flight Crews to Stave Off Travel Exhaustion
Keeping jet lag away.

What to Buy Every Month of the Year in 2018
Plan your shopping accordingly.

3 ways you can save better for retirement
Every penny counts.

Thursday’s need-to-know money news

Today’s top story: What to do about the Fed rate hike. Also in the news: How to deal with credit card fraud, driverless cars, and how your credit card debt is costing you nearly $1000 a year.

Fed Rate Hike: Here’s What to Do
Don’t panic.

First Time Dealing With Credit Card Fraud? You Got This
Important steps to take.

Are Fully Self-Driving Cars Just Around the Corner?
Should we fear the driverless car?

Credit card debt is costing you nearly $1,000 per year
Interest piles up.

Wednesday’s need-to-know money news

Today’s top story: 3 steps to tame your debt in an hour or less. Also in the news: 10 housing and mortgage trends to watch for in 2018, how one woman ditched over 50K in debt, and why to be wary of instaloans in stores.

3 Steps to Tame Your Debt in an Hour or Less
Concrete steps.

10 Housing and Mortgage Trends to Watch for in 2018
What to keep an eye on.

How I Ditched Debt: A Wish List Kept Her Going
Read a success story.

Retailers now offers Instaloans to pay for purchasesBuyer beware,