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.

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  1. Another thing to keep in mind is credit card debt. When my father died, his card carried a large balance, due to medical costs and the fact that he had been unable to work due to his illness. We discovered that he had credit life insurance, and the card debt was marked paid in full with the presentation of a death certificate.

  2. Ted Mittelstaedt says

    I really do not understand why a credit card company would extend credit to someone who is very old and has no income or assets. When these people die and the card companies get “stiffed” we all end up paying for it with higher prices. I suppose financial responsibility has gone out the window these days, so many are following the example set by the President.

    • Liz Weston says

      Mr. Schmoll’s dad was not very old when he died, unless you consider 66 to be ancient. In any case, issuers typically don’t approve people who have “no income or assets” at the time they apply. And age discrimination probably wouldn’t help issuers make more money than they already do, but bad debts are a cost of business they can easily absorb.