Charlotte, NC asked in Collections for North Carolina

Q: My husband died a few weeks ago leaving me 50,000 debt on 2 credit cards. Am I liable in NC?

There isn't much in the way of assets. We are jointly named on a mortgage and any money in the bank will only be from a life insurance policy that hasn't paid out yet. Which isn't much by the way as this was his third time around with cancer and therefore considered uninsurable. There are still medical bills, car loans and college education to pay for as well as living expenses. At the time of his death there was only 34,000 combined in checking and savings. At 53 I have no marketable skills as I was a stay at home mother. I have not contacted the credit card companies out of fear yet. One of the cards is a 30,000 balance with a credit union in another state. I am not listed jointly on the credit cards.

Can the cc companies come after me and anything I have left?

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1 Lawyer Answer
Catherine E Bruce
Catherine E Bruce
  • Chapel Hill, NC

A: I am sorry to hear about your husband's passing. Although your husband’s estate will be responsible for paying his credit card bills and his other debts, you may be able to get most of his assets out of his estate before the creditors receive anything.

First, did your husband name you or your children as beneficiaries on his life insurance policy? If so, you can receive all of that money free of his creditors. North Carolina protects life insurance where the decedent named his spouse and/or children as beneficiaries, and allows you to take that free of any creditors he may have had.

Secondly, did you own your house as “tenants by the entireties”? (You can tell that from the language of the deed: if the deed addressed you as a married couple, NC presumes that you took title as tenants by the entireties.) If you did, you now own your house free of the claims of any of your husband’s individual creditors. Your house will still be subject to the mortgage that you both signed, and to any other joint creditors of both yourself and your husband.

Finally, you can claim some more of your husband’s assets through the “year’s allowance.” North Carolina allows a surviving spouse to claim up to $30,000 of her husband’s assets free of creditors. It also allows dependent children to claim up to $5,000 each, also free of creditors. This can be useful to obtain cars, personal property, bank accounts, etc. (You can petition the court to grant you more than the statutory amount, if your husband’s estate ends up exceeding these limits. However, you cannot get an additional allowance if the total would be more than one-half of your husband’s average income over the last three years.)

So, hopefully you were the beneficiary on the life insurance, and you owned your house as tenants by the entireties. After that, you can claim your family allowances to get some more assets out of the estate free of creditors. That should leave very little for creditors. You can either open an estate at that point and pay out what is left to the creditors, or you can leave it and see whether a creditor comes forward to open the estate and claim whatever is left. If an estate is opened, your husband’s remaining assets will be divvied up among the creditors and their claims will be wiped out. You will not be held responsible for debts that were solely your husband’s.

Unfortunately, you may still be held liable for your husband’s medical bills. In North Carolina, the Doctrine of Necessaries holds one spouse responsible for the necessary living expenses of the other spouse. This includes medical bills, among other things. So, it is possible that the medical providers could come after you for payment on any outstanding medical debts under this doctrine. Hopefully your husband had medical insurance that would cover most of these costs.

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