Dear Quentin,
I have a friend who lives in Virginia and has been a stay-at-home mom to three kids for the last nine years. Her husband passed away unexpectedly last month. He didn’t have any life insurance or savings. The mortgage was in his name only, but my friend is also on the deed of the house. Likewise, he had credit cards in his name only but had listed her as an authorized user on the accounts — and then cut up her cards. He left a balance of about $15,000.
She currently has no income and three kids between 5 and 10 years of age. They live in a rural area with no family or support system close by, so finding a job will be difficult, but she will be filing for Social Security benefits soon, so that’s something. She can’t pay the mortgage. She is planning to sell the house and should net between $75,000 and $100,000 on the sale of the property.
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Will she be responsible for repaying her husband’s credit-card debt? Given that she hasn’t worked for the last decade and has no income, even finding an apartment to rent will be difficult unless she pays the entire lease amount up front with the proceeds from the sale of the house. Do you have any advice to help get my friend and her children on their feet? Right now, she can’t even buy groceries or put gas in her car.
Trying to Help
Dear Trying,
Selling her house should be a last resort. Without it, she will be dealing with landlords and housing insecurity for years to come and will still have to qualify for tenancy, which will require references, a regular income and good credit score. Her mortgage may feel like a burden now, but it will be far worse if she ends up moving from apartment to apartment with her children. Generally, people should hold off on making any drastic changes after a loved one dies.
She is likely not liable for her husband’s credit-card debt, even as an authorized user on his accounts. Becoming an authorized user allows a person to build a credit score without having their own credit card. “Authorized users have no legal duty to pay for charges to the credit account,” according to Equifax, one of the big three credit bureaus, along with TransUnion and Experian. “The primary cardholder is the one ultimately responsible for making payments.”
However, her husband’s credit-card company could, in theory, claim the $15,000 debt from her husband’s estate. So if she did sell her house, those proceeds could be vulnerable to the reclaiming of that debt. It all depends on the company and its procedures. Your friend should consult with an attorney as she starts the probate process.
Make sure she applies for Social Security survivor benefits. She may be eligible regardless of her age, given that her husband left three minor children. The children may also be eligible for benefits, according to the Social Security Administration, if they’re 17 or younger; if they are age 18-19 and attending school (not college) full time; or if they are any age and developed a disability at age 21 or younger.
Healthcare and food assistance
Temporary Assistance for Needy Families also provides help paying for food, housing, home energy, child care and job training. She can find her local TANF office through the U.S. Department of Health and Human Services. Your friend should contact the mortgage company as soon as possible, and provide them with her husband’s death certificate, to explain what happened; her husband may have had life insurance on the mortgage, or the company may give her a grace period on her payments.
She can also apply for Obamacare, the healthcare program signed into law by President Barack Obama in 2010. “Under the Affordable Care Act, Medicaid coverage is extended to nearly all nonelderly adults with incomes at or below 138% of the federal poverty level (about $23,556 for a family of three in 2022) in the 42 states (including D.C.) that opted to expand as of March 2023,” according to the nonprofit KFF, formerly the Kaiser Family Foundation.
“Under rules in place before the ACA, all states extend public coverage to poor and low-income children, with a median income eligibility level of 255% of poverty in 2022,” KFF says. “The ACA also established health insurance marketplaces where individuals can purchase insurance and allowed for federal tax credits for such coverage for people with incomes from 100% to 400% [of the federal poverty level] (about $23,030 to $92,120 for a family of three in 2022).”
She should also look into the Family Access to Medical Insurance Security Plan, which is Virginia’s health-insurance program for children. “There are no monthly premiums, co-payments, deductibles or other costs for covered services to children enrolled in the FAMIS program,” according to Virginia’s Department of Medical Assistance Services. The program covers dental care, doctor visits, emergency care, prescription medicine, X-rays and vaccinations.
In the meantime, your friend could contact Viriginia Legal Aid, a free service, to get the ball rolling. It’s not going to be easy: Remote jobs are hard to find, particularly for someone who does not have any tech training — as the best paid work-from-home jobs involve some kind of STEM skill. There is a lot she can do to stay afloat financially, hopefully without giving up her only asset — her home.
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