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Ray
Ray, Lawyer
Category: Legal
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Experience:  30 years in civil, probate, real estate, elder law
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My brother -in-law had a plumbing business - DBA: Plumbing

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My brother -in-law had a plumbing business - DBA: Plumbing and Heating. He took out a business loan for operating costs from a bank in Massachusetts. August 29, 2012 he passed away from brain cancer. Is my sister responsible for paying back that loan each month? Her name is XXXXX XXXXX the loan. My brother in-law signed it.

RayAnswers :

Thanks for your question and good evening.

RayAnswers :

If the sister here is not on the loan she would not be liable for the debt in Massachusetts.

RayAnswers :

Massachusetts is not a community property/debt state so she has no liability.

RayAnswers :

The husband's estate if probate is opened would be liable for it.

RayAnswers :

The creditor can pursue the estate or any assets in the estate but that's it.

Customer:

Two questions:

RayAnswers :

If the estate is insolvent here then the creditor has to write this off.

RayAnswers :

Sorry take your tiome.

Customer:

What about if she is now running the business

Customer:

and could they go after her life insurance

RayAnswers :

Again only the estate is liable.They cannot hold her liable.

RayAnswers :

They would have to open probate here and the business is part of the probate.His share of it anyway.

RayAnswers :

And in probate the family has some exemptions.

RayAnswers :

Here is you look at item 4 it goes over those.

Customer:

She did sign as personal voluntary representative in september 2012

Customer:

so she could accept his payments - does that make her responsible for his loan debt

RayAnswers :

Well only the estate and any share of his assets are liable and only then after the personal and family exemptions are granted tot he family.

Customer:

can she get paid back for all the months she's been paying it

RayAnswers :

If the estate here has an ownership interest--here it is likely 50% if it is marital property then the creditor can make claim and sue the estate fro his share.They could force her to sell the business and then any profit is divided here.

RayAnswers :

It is very possible here they do nothing.

RayAnswers :

It is very possible they write off the note and do not pursue it.If she wants to keep the business going she is likely going to have to resolve the debt.

RayAnswers :

And that is as personal representative ..

RayAnswers :

She would be entitled to a reduction in the debt thats about it here credit for her payments.

RayAnswers :

It reduces the debt owed by the estate.

RayAnswers :

It is very possible here that she can negotiate and reduce the debt and pay it off as personal representative.The lawyer for the estate should help her negotiate this if possible.

Customer:

There is no estate. My sister is now single with four children. The company had very little assests

RayAnswers :

So then she may let the business go.

RayAnswers :

The estate then is insolvent and creditor would write off the note.She should not make any more payments.

Customer:

Thank you very much! You were awesome:)

RayAnswers :

She should write the creditor and advise them that the deceased is insolvent and ask them to close their files.

RayAnswers :

And you are so welcome.

RayAnswers :

If you can leave a positive rating it is always appreciated.

Customer:

I will let her know!

RayAnswers :

Take care .

Customer:

you too.

RayAnswers :

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Thanks for the positive rating.I appreciate the chance to help you tonight.

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