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TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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My father passed away latye last month. Both my parents are

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My father passed away latye last month. Both my parents are retired and would travel accross the country 6 months out of the year. I'm the oldest son and my Mother an I are executors of the estate per his will. My father and mother do not have much of assets. They live in a primary residence in Bakersfield, CA, which is under a reverse mortgage, some savings and no life insurance. My dad has a truck not paid off, mother has a car not paid off, a camper not paid off. Mother will have to sell the truck and camper because she cannot afford the $1000 per month payments. Because they traveled and I went through a divorce, they helped me and have a home in Tennesee. I pay all the expesnes but it's in their names. My question is Dad had several credit cards that I paid for him from the Tennesse address and everything is current but totaling approx $40K. Without income from Dad my Mother cannot afford to pay these debts. What are options are there to get these reduced or written off?
Is there a way for me to assume the debt but reduce the amounts?

You are in a difficult situation. Your father's passing means that your father's estate becomes responsible for the payment of the debts. Since they were domiciled in California, California law will apply. Under California law, your mother will become responsible for the credit card debts if they were made while your parents were married. In short, California Probate Law does not relieve these debts.

Short of selling assets to pay off the debts, you could also 1) try to negotiate a reduction of the debts with the credit card company directly and ask whether they will allow you to assume the debt (this is their option); 2) you can take the estate through probate and claim that the credit card debts are not valid and force them to prove their claims (this would require a probate attorney to accomplish, which can be expensive); 3) your mother can declare bankruptcy and have the court reduce the debts to a manageable payment plan, or write them off completely.

Please let me know if you need further information.

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Customer: replied 4 years ago.

Okay, so there's no way to get the debt relieved without bankruptcy route?

If so, how does the Tennessee home come into play?

What if I Buy the house from her for what is owed, will that fly?

Also, what about the small savings and her fixed income, will that be taken from her?

1. Getting the debt relieved without a bankruptcy route

- You can attempt to enter into negotiations with the credit card companies to reduce the debt owed or write it off. The fact that the debtor is no longer alive and there are arguably no assets (except for the Tennessee house) which are subject to judgment, you have a good chance to get them to agree to a reduction.

2. The Tennessee house

- As I understand it, this house is in your father's name. To be able to buy the house, you would first need to actually transfer the title of the house to your mother. As they are domiciled in California, the court in California will be the able to issue an order that you can then take to Tennessee and file in the court's to show that the house now belongs to your mother. Then you can purchase the house from her. As it stands now, the Tennessee house is actually a asset which is subject to judgment, as it is not the owners' homestead. Thus, if the credit card companies go get a judgment on the debt owed (say, because you stopped paying them), you could potentially lose the house.

I think you should really try the negotiation route to see if they will work with you on the amount of the debt. I also recommend your mother transferring the title of the house to her name and then setting up some sort of sell to you to get the asset out of her name. In the end, if she sales all the assets which are liable to a judgment, then she can simply stop paying the credit cards. If there is nothing they can seize with a judgment, then all they can do is affect her credit score. This may or may not matter to her, and further she can challenge it.

The first thing though is to go ahead and file a small estate administration with the California Courts to get the property and bank accounts transferred to your mothers name. The bank accounts are subject to seizure upon judgment by a credit card company, so you want to be careful and do things quickly.
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Customer: replied 4 years ago.
forgot to say that the house is in both their names so does Ca cumminty property still take presidence even though the house is in Tennessee?
If the house is in both their names, you would still need a quit claim from the estate to release your father's interest.

This is where it becomes interesting. Technically, an estate can be administered in different locations. As a base location, California would be where you could apply for the administration because they are domiciled there. However, because a major asset of the estate is in Tennessee you could potentially file the administration in Tennessee. There's a procedure in Tenn. Code Ann. § 30-5-103, which allows the the quick administration of an "insolvent estate", i.e., an estate which owes more than it owns. In California, upon death half of the community property is immediately vested in your mother, while the other half becomes part of the estate. So only half of the total assets are liable to judgment by a creditor. On the other hand, a surviving spouse in Tennessee has similar rights and the property can be dealt with directly there.

After comparing both statutes and looking at the complications involved, I really do advice you to go sit down with a Tennessee Probate attorney and see if they recommend attempting to file the estate in Tennessee. If not, then your mother can initiate the small estate administration in California in Part 4 of the California Probate Code.

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