by GarySpicuzza » Sun Oct 05, 2008 10:55 am
So I'm clicking through the 857 channels last night and I stumble upon Suze Orman.
The caller says she and her husband always kept their money separate and just split the bills. Caller says husband died and had a $250,000 life insurance policy naming her as beneficiary but to her surprise he had racked up about $100,000 in debt in HIS name only. Caller said she knew there was "some" debt but had no idea it was that much.
Caller asks Suze if she should pay off that debt or should she keep the life insurance money for her future financial needs?
Simple question and the simple answer should have been keep the life insurance benefit for yourself.
But Suze wanted to know the amounts of the outstanding loans and their respective interest rates, they were between 7% to 16%.
Then Suze asks her where she could get 7% interest guaranteed and told her to pay off the $100,000 worth of SOMEBODY ELSES DEBT!
That's bad advice.
If the debt is just in your husband or wife's name ALONE that's not your bill to pay. If the creditors were concerned about the repayment of their loan upon death they would have required a collateral assignment on his life insurance policy BEFORE extending credit.
They didn't, the debtor died, they're out the money, too bad. They didn't understand the importance of the beneficiary collateral assignment information in time. Make better business decisions next time.
It's not the morally "right thing" to do to pay off that debt with your life insurance proceeds. That money is for the exclusive benefit of the person named as the beneficiary in the life insurance policy. (Florida)
Don't think for one moment the "risk" of the debtor dying isn't built into the interest rate charged on unsecured debt.
It is.
Suze's advice was geared towards not hissing off bankers and credit card companies. The caller would be a fool to unload $100,000 in the absence of a legally enforceable obligation.
Natural person named beneficiaries should keep their money.
The caller is a very smart woman for NOT comingling her money and his money and his debt with her debt.
As Tina Turner would say:
What's Love Got To Do With It?
The caller says she and her husband always kept their money separate and just split the bills. Caller says husband died and had a $250,000 life insurance policy naming her as beneficiary but to her surprise he had racked up about $100,000 in debt in HIS name only. Caller said she knew there was "some" debt but had no idea it was that much.
Caller asks Suze if she should pay off that debt or should she keep the life insurance money for her future financial needs?
Simple question and the simple answer should have been keep the life insurance benefit for yourself.
But Suze wanted to know the amounts of the outstanding loans and their respective interest rates, they were between 7% to 16%.
Then Suze asks her where she could get 7% interest guaranteed and told her to pay off the $100,000 worth of SOMEBODY ELSES DEBT!
That's bad advice.
If the debt is just in your husband or wife's name ALONE that's not your bill to pay. If the creditors were concerned about the repayment of their loan upon death they would have required a collateral assignment on his life insurance policy BEFORE extending credit.
They didn't, the debtor died, they're out the money, too bad. They didn't understand the importance of the beneficiary collateral assignment information in time. Make better business decisions next time.
It's not the morally "right thing" to do to pay off that debt with your life insurance proceeds. That money is for the exclusive benefit of the person named as the beneficiary in the life insurance policy. (Florida)
Don't think for one moment the "risk" of the debtor dying isn't built into the interest rate charged on unsecured debt.
It is.
Suze's advice was geared towards not hissing off bankers and credit card companies. The caller would be a fool to unload $100,000 in the absence of a legally enforceable obligation.
Natural person named beneficiaries should keep their money.
The caller is a very smart woman for NOT comingling her money and his money and his debt with her debt.
As Tina Turner would say:
What's Love Got To Do With It?
Posted: Tue Oct 07, 2008 01:16 pm Post Subject:
"we split the bills" is what she put in the origianl statement. I am assumong they didn't combine their funds. I believe that all bills should just plain be paid and not split up. I guess I was raised old fashioned like that.
I see too many scenarios where one partner doesn't want to help the other and this is what the post sounded like to me. I was assuming this is how it was.
If it pertained to me and my life I would pay. My husband would do the same...we work equally. Now if it was some jack*** I wouldn't care what his name looked like.
Posted: Tue Oct 07, 2008 02:15 pm Post Subject:
...hmmm..split the bills. So...when he died, did she get "his" checking account? If so, there probably isn't a question to if she benefited.
Posted: Tue Oct 07, 2008 09:15 pm Post Subject:
Could have only been a few bucks in there too??/ Maybe thats why he had all the credit bills...he didn't know how to save. Just an idea.
Posted: Wed Oct 08, 2008 09:53 am Post Subject:
Lori, your line of thinking is in tune with mine, now whether that's actually the right way to think is just a matter of opinion.
I know, 20 or 30 years ago wouldn't have been any question :roll:
As far as the credit card companies, yes, they are some of the biggest con artists in our economy today, but normally it is the individual who makes application for the credit card and agrees to abide by the terms and conditions of the card. Most people don't complain when they swipe the numbers off the card at the mall, but only when they get the bill.
thank you..bravoPosted: Wed Oct 08, 2008 01:28 pm Post Subject:
My biggest thing about credit card companies is how they try to lure teenagers into their trap. As soon as my son turned 18 all we got was applications in the mail. I don't even know if that is legal. I was afraid he would fall for it so I went and signed his name (without his knowing) on the opt out place here on the web.
I know it may sound like I took his decision away from him but I took int consideration his train of thought and how he was always taking easy ways out.
Posted: Wed Oct 08, 2008 04:47 pm Post Subject:
Others may disagree, but I think you did the exact right thing...our kids are now 30 and 27, we raised them to think pretty much the sky would fall in if they got a credit card...NEITHER ONE ever got into the trap in fact the 30 year old has NEVER owned a credit card in her life...and the son has one that he intentionally requested that it never be allowed to exceed a 500 limit...for emergencys only....it's sick and sad what happens when these are in the hands of immature 'grown ups' ... I know people my age and older that have several maxed out...
Posted: Wed Oct 08, 2008 10:36 pm Post Subject:
I feel it was good. I think I told you his record and actions so I don't feel bad. I get caught in the credit trap long ago when my first hubby got kidney cancer. He was fighting for SS and we all know how long that can take. We needed something to help with the gas to and from the hospitol and bills. I will never fall into the trap again. We only have two that we had to take out after my accident and we paid faithfully and more than the monthly payment. We only have the one left to go and so we transferred it to a bank loan and then cancelled the card. I am not a credit card fan at all.
Posted: Thu Feb 26, 2009 10:38 pm Post Subject: repayment of late husband credit card
My husband and i were only married nines day before he died and he had a credit card in his name only before we were married with a outstanding balance of around $18,000.00 am i responsible for it? We have no estate and I live from pay check to pay check. they are calling me and say i am responsible for it. Sandra
Posted: Fri Feb 27, 2009 02:53 am Post Subject:
It's definitely a moral issue. When my mom passed; I paid her bills bcause I knew that was something that was important to her. I wouldn't have felt comfortable not paying them even though they were significant.
I knew I wasn't legally obligated to pay them but I did it out of respect for her.
Posted: Fri Feb 27, 2009 08:26 am Post Subject:
Setting ALL emotion aside and PLEASE no hate mail....I'm just saying.....
Paying a dead person's debt in which you as an Individual Natural Person Legal Entity DID NOT create and you have absolutely no legal responsibility for or any legal liability is INSANE.
The major credit card companies have lawyers and they know they cannot collect debt from a dead person who doesn't have any money in their Estate.
The RISK of that happening and occurring is built into the interest rates they charge when they issued the UNSECURED credit card in the first place.
If they were out of their mind worried about it they would have either DEMANDED a co-signer OR they would have DEMANDED a collateral assignment on your life insurance.
Further, just exactly who would you be paying this money to? A computer data entry clerk working in the payment processing center.
@ Sandra in my best Italian voice...forgetaboutit!
This post is not intended to be harsh or critical of anyone.
Our Gubment will bailout Citibank,.... but go try and get a loan from a bank because you lost your job and NEED the money....it will never happen.
You need to keep your money.
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