Allendale, NJ asked in Bankruptcy, Foreclosure and Probate for New Jersey

Q: What can I do to stop foreclosure on the house and settle parents' estates w/o taking on responsibility for their debts

that could potentially affect my credit. Both parents died in 2017 with NO wills. They both have massive amounts of medical debt and there is a mortgage on the home. I'd prefer not to move from the home and am named as an heir by the mortgage company (and named resident) and am contemplating becoming the administrator of the estate. Would I be able to take over the mortgage and remain in the house? Would I have to file bankruptcy to prevent them from coming after me for their medical bills? How long would I have to settle their estates after(if) I became the administrator and what should I expect during that process?

4 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • Bankruptcy Lawyer
  • New York, NY
  • Licensed in New Jersey

A: You can just pay the mortgage. The bank does not care where the cash come from. As to the debts, you are not liable personally. If the debt exceeds the asset value of the estate, there is no benefit to an estate.

Brian Winters agrees with this answer

Brian Winters
Brian Winters
Answered
  • Bankruptcy Lawyer
  • Bradley Beach, NJ
  • Licensed in New Jersey

A: That’s very complicated. Provided there’s no appreciable equity in the home, your parents can bankrupt out of the debt. If you inherit the house, it comes with the mortgage. So long as it gets paid, you’re fine

Clark Dray
Clark Dray
Answered
  • Bankruptcy Lawyer
  • Broomfield, CO

A: I strongly suggest you speak with an experienced probate lawyer in your area. While you can pay the mortgage and get it caught up to avoid the foreclosure, the bigger issue is the question of how you get this home in your name. You'll have to administer your parents' estates to make this happen, and part of that process will be resolving their debts. If there's equity in the home, you may be required to sell in order to pay their debts before making any distribution to yourself. As such, it may not make much sense to throw a bunch of money at the home in an effort to keep it, if you can't actually keep it. While you're not currently liable for their debts, if you fail to properly administer their estates you may create liability for yourself.

On the bankruptcy side of things, because your parents are deceased, they're not eligible to be Debtors under the bankruptcy code.

Lazaro Cardenas agrees with this answer

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Pay the mortgage. You are not personally liable for any of your parents debts.

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