Managing Debt Following the Death of a Spouse

The last thing anyone wants to think about after the death of a spouse is dealing with their financial matters—but the reality is, it has to be done. Managing debt and other financial obligations can be a daunting task, especially if financial records are disorganized or unavailable. Taking proactive steps now to avoid an unnecessarily difficult situation from occurring can save you from experiencing added stress down the line. And if you need help with debt management, consumer credit counseling services agencies, commonly known as CCCS are available to guide you through the process of repaying debt owed to creditors, and learn ways of coping with living on one income.

Where Do I Begin?

Perhaps the most difficult part of this process is determining what to do first. Consumer Credit Counseling Services (CCCS) agencies like ours advise that good organizational skills are a key part of effective debt management for any situation.

Begin by making a list of all financial obligations and concerns. It is probably a good idea to separate the list by which financial matters are solely your spouse's, and to which you have a joint obligation. Having a list will help you to get a handle on the scope of the debt management and financial issues you will have to address. Your list may include the following items:

Documents to Gather:

• Copies of Will and Trust
• Insurance policies
• Birth and Death Certificates
• Retirement plan documentation (pensions, social security benefits)
• Tax documentation (related to income or property tax)
• Funeral arrangements (service and burial costs)

Financial Obligations to Consider:

• Mortgage/rent payments
• Utilities
• Property Insurance
• Health Insurance
• Credit card payments
• Miscellaneous expenses

When you have completed your list, you will have to prioritize which items will need to be dealt with first, and from which third-party professionals you will need assistance. For example, you may need the assistance of an attorney to arrange the will and trust, or an investment advisor to address your long-term investments. When it comes to debt management, a Consumer Credit Counseling Services agency like ours can help you with ways to keep up your payments to creditors and learning how to budget effectively.

Our CCCS Agency Says Know Your Rights and Obligations

To manage debt most effectively, you need to be educated about your legal rights and obligations as a consumer. It is important to understand what your financial obligations are beforehand so that you know what you could encounter should your spouse pass away. An attorney can advise you on the legal details and a consumer credit counseling service can assist with debt management concerns. Some questions to consider are:

1. Have I co-signed on any outstanding loans or credit cards?
   If your deceased spouse carried a credit card solely in his/her name, many creditors will write-off the debt owed then. On the other hand, if you have co-signed on a credit card that has outstanding debt, you will be responsible for managing and paying back that debt.
2. Is my state of residence considered a community property state?
   If you live in any of the following states, your property and assets are considered to be jointly owned.
   • Arizona
   • California
   • Idaho
   • Louisiana
   • Nevada
   • New Mexico
   • Texas
   • Washington
   • Wisconsin
   Credit accounts opened by a married couple are also considered to be joint accounts in community property states.
3. Did my spouse have assets that could be subject to probate?
   The term "probate" refers to the legal process of determining the validity of a will and estate. Creditors have the right to submit claims on debt that is probated. This process varies from state to state so it is important to have an attorney explain the process since it could affect the value of assets a surviving spouse is entitled to.

CCCS Suggests Steps for Wise Debt Management

It is very important to make wise financial decisions now that can save you from a potentially messy situation in the future. Be proactive when it comes to debt management and your credit. Start by establishing credit in your name only. This way, you can build a stronger credit record, as well as avoid potentially complicated debt management issues should your spouse pass away.

Another important step to take now is to establish a savings account for emergency situations because you never know when you may have to take on extra expenses such as funeral costs and legal fees.

Debt Management with CCCS

If you find yourself in a debt management crisis following the death of a spouse, rest assured that help is available. Reputable consumer credit counseling services such as our CCCS agency are experienced in all aspects of debt management from budgeting basics to debt management programs designed to repay unsecured debt to creditors.