Ask Terry Questions Figuring out our debt my spouse created and hid

Figuring out our debt my spouse created and hid

By Terry Savage on March 05, 2024 | Wild Card

Dear Terry this is going to be very long story. I need help. . I am 74 and my husband is 76. He became ill with cancer in 2022. He was a self employed attorney. When he got sick in 2021 and was unable to handle the finances I discovered major credit card debt along with irs debt. And to top it off he hasn’t done the taxes for a number of years. I was foolishly unaware as he is a bright man and managed our finances for the 39 years we have been married. He apparently was gambling. I thought he was going to the office working on Saturdays and often on Sundays too.
The accountant is working on our taxes and
My husband has called the IRS explaining he has stage 4 stomach cancer and not able to work. The agent said the irs takes that into consideration and to send the filings directly to him.
That he is in the process of doing.
Our assets are our home. Which is about 500k. We have a small amount due on our HELOC and a lien by the state of Illinois for taxes. We had been making payments until covid hit. Then the deductions from our Ss stopped. I think my husband had deductions from his ss too.
We have 2 autos with no payments due. We make 60k a year with ss and a stipend from a board my husband is on.
I don’t know what the first step I should take. I’ve heard that there is a way to lower the cc debt and consolidate
I have some jewelry I was going to sell and some coins my parents left me.
Please What should I do?
Could I get a reverse mortgage?
Thank you for any advice you can share.

Terry Says

I’m glad you have a good accountant working on this. It’s quite a mess. And a warning to other women to be involved completely in household finances!
You need some sophisticated financial counseling.

Your next steps all depend on how much you will owe in taxes, property taxes, etc. If you have $500,000 in EQUITY in your home (sales price minus loans, and liens), you would probably be best off selling the house and putting the money in the bank. And using it to have your accountant negotiate with the IRS.

You definitely cannot get a reverse mortgage or a home loan in this situation. And you’re probably better off without the home. Your ongoing income could let you pay rent in a senior community.

BUT, it’s likely that your husband will die soon, with stage 4 cancer. In that case, you might be better off letting at least his debts die with him. So it depends on how the house is titled — joint name? And for that you need some legal advice on the impact of what you owe still, if he predeceases you.

As I said, this is complex. I can think of two ways to go. First, to get a rough idea at no cost and with trusted advisors, call800-388-2227 –the National Foundation for Credit Counseling. That will connect you to the nearest local agency. They can refer you to attorneys who will understand your situation and advise you.

And remember, what’s in YOUR best interest may not necessarily be in your husband’s best interest. Your interests have diverged now that he financially cheated on you. And so you might ask your accountant if you should file “married filing separately” from now on, invoking the”innocent spouse” rule — though that is very hard to do. But you want to extricate yourself from this mess, even though he may not be able to do so!!

If you want to sell some jewelry and coins — your own money/assets — you might want to contact Attorney Kerry Peck in Chicago. Tell his assistant, I suggested you talk to him.
But that will be more expensive, if you engage him to represent you.
Peck Ritchey, LLC
321 S Plymouth Ct Fl 6, Chicago, IL 60604
(312) 201-0900

Please let me know what develops. I just hate to see this happen to women!



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