Losing a spouse is something you would not want to experience. But then it happens to you, and you discover that you also need to deal with their unpaid debts, which can add to your stress. You begin to consider filing for bankruptcy to help you manage these financial obligations. While bankruptcy can offer relief in some cases, it’s crucial to understand which debts you can discharge and which you cannot.
Can you discharge your late spouse’s debts in bankruptcy?
In Maryland, you usually don’t have to pay your deceased spouse’s debts unless you shared or co-signed them. If bankruptcy seems like a solution, here’s what to know:
- Chapter 7 bankruptcy can wipe out most unsecured debts, like credit card balances and medical bills.
- You can’t usually erase secured debts, like mortgages or car loans unless you give up the property.
- Some debts, like student loans and certain taxes, are hard to erase.
Creditors have limited time to claim against the deceased’s estate under Maryland Commercial Law. This might influence your choice to file for bankruptcy.
What happens to joint debts after your spouse’s death?
Joint debts don’t disappear when your spouse passes away. You remain liable for:
- Joint credit card accounts
- Mortgages in both names
- Loans you co-signed
You may be responsible for your spouse’s medical debts, even if you didn’t sign for them, as there is no clear rule in the doctrine of necessaries in Maryland. Seeking legal advice can provide clarity and help you make an appeal.
How can you manage these changes?
Dealing with debt after losing a spouse can turn your world upside down. An attorney can help you understand the process and find the best option. They can review your financial situation, explain how bankruptcy might affect your assets, and help you create a plan to manage your debts. However, each situation is unique, and what works for one person might not be your best solution. The right guidance will lead you to make informed decisions that benefit your financial future.
