my mothers debt outways her assets. She has about 125,000 in debt (credit cards, Medical bills) included is a mortgage of $97,000. Her house wont sell for more that $125,000 so wouldnt that mean its insolvent? And do I really need to file probate for that? Could I get in trouble for just walking away? I am the ONLY heir.
Estate Planning Attorney
Let me first say that I am sorry for your loss. The probate procedure is no fun, so I can easily understand your reluctance to go through the hassle only to have it satisfy your mother's creditors. Not knowing what other debt she might have had, if the mortgage is her only debt and you think you might actually emerge from probate with a small but solvent estate then I think you could approach the mortgage holder, explain why the mortgage has not been paid and see if they are willing to work with you to get the house sold. Remember that a foreclosure is not without a cost for the lender so you might be surprised at their willingness to help. Good Luck
2 lawyers agree
The answer provided above is in all respects correct. I just want to add two quick points.
First, you could also approach the other creditors and explore whether they are willing to reduce the outstanding balance in exchange for receiving something, rather than nothing.
Having said that, you may find that the amount of work involved is simply not worth it. Even if you got all creditors to agree to accept 50 cents on the dollar (a pretty ambitious plan), you are still left with an estate that is worth roughly $25,000 before you deduct for attorneys' fees, real estate broker's commission, and any applicable transfer taxes.
Good luck to you.
Generally, you are not required to probate a will. If the estate's liabilities exceed the assets, then by all means you should not file. Also, do not pay the mortgage if the property was owned only by your mom and you did not personally guarantee the loan.
Hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below and/or designate my answer as best answer. Thanks.
Mr. Fromm is licensed to practice law in PA with offices in Philadelphia and Montgomery Counties. His phone number is 215-735-2336 or his email address is listed below.
Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question.
Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
1 found this helpful