Debt Collection: Being held liable for another’s debt

Debt Collection: Being held liable for another’s debt
A spouse can be held liable for the other’s medical bills if the following factors apply:
1) the patient spouse is unable to pay
2) the non-patient spouse is able to pay
If the above factors are shown, the non-patient spouse may be held liable for the patient spouse’s medical bills unless the non-patient spouse has been abandoned by the other spouse without cause.
I usually get asked about this subject in an estate planning context.  Once one spouse passes away,  it is rare for the creditor to collect and here is why:  In Ohio, the creditor’s claim must be made against the decedent’s estate within 6 months of the death.  If the creditor does not assert its claim within 6 months, the creditor’s claim is barred.  Once the claim is barred, the above rule applies.
If you are a surviving spouse finding yourself in the above situation, you should speak to an attorney.  You have a few options.  1) You can claim that you cannot pay, especially now that you have to pay for the cost of burying your spouse.  2) You could also claim that the patient spouse abandoned you without cause.  To determine if either of these arguments might work for you, you should seek the help of counsel to build your case.
Even with the above caviat, it is safe to tell clients that as a general rule, they will not be held liable for the debt’s of their spouse.  It is always important to seek the advice of an attorney if you find yourself in a situation where people are claiming that you are liable for another’s debt.  Creditors (and others) like to tell family members that they will be held liable, in an effort to collect.  Just because a creditor tells you this, it does not make it true.  Always seek the advice of a local attorney to address your specific situation.

Credit Repair

If you have ever made a large purchase with a boyfriend or girlfriend, you probably know what a nightmare it can turn out to be.  It is an even bigger hassle if the big purchase is a house and the other party doesn’t contribute to the payments after the breakup.  If you would like to get married some day, I would not recommend making any large purchases with someone you are not related to or married to; however, just like a lot of advice coming from an attorney: this may be too little too late.
If you purchased a home with someone who is no longer contributing to the payments, there are a few options.  Do not consider foreclosure just because you want closure with the person (believe it or not, clients have suggested this option).  Do not panic.  It is understandable that you want this person to be removed from the loan and title; however, it is not imperative that you act (irrationally) today.  You should not be too concerned about getting them removed from the loan (since this is an obligation and not necessarily a right) unless the person is insisting that they be removed from the loan in exchange for being removed from the title.  You may be able to get the person removed from the loan by refinancing.  If you are unable to refinance due to a low credit score, you should call Credit Smart Solutions owned and operated by Joe Frey, a credit specialilst.  Joe can evaluate your situation in a free consultation and tell you whether he can help and by how much.  Once your credit score has improved and reached the goal score, Joe can put you in contact with a mortgage company that he does business with that should be able to help you refinance.
If you are unable to refinance, you should not panic.  If you sell the home, or otherwise pay off the home, an attorney should be able to prepare a quit claim deed for around $100-$150 to send to your significant other.  If the other party refuses too sign the quit claim deed, the attorney can explain your other options.