Bankruptcy

Debtor Loads Debt On Dead Mother's Credit Card Before Bankruptcy

By Jonathan Alper

I think all bankruptcy attorneys encounter strange questions and fact situations in the lives of their bankrupt clients. Here?s one my secretary heard last week from a client who was completing our bankruptcy questionnaire. The client asked my secretary if he should include his deceased mother?s credit card. My secretary told him "no" because children are not liable for their parents? debts. But, the client asked, what happens to all the debt he charged for his own benefit on his mother?s credit card after his mother died?

This guy hijacked his death mother?s credit card in order to pay his own living expenses. Leaving aside the moral issues, it is unclear whether he lists these charges on his bankruptcy petition. Legally, the debts are not yet his legal obligation. Its not his credit card. If his mother?s credit card companies ever figure out what happened they may sue the son for the money. At that point, the credit card companies will be creditors. The credit card lenders could sue the son on many counts including fraud. It may even be criminal fraud.

If the son lists the credit cards as contingent debts he is alerting these credit card companies of the problem and their potential cause of action against the son. Its not in the son?s best interest to list the debts on his bankruptcy petition. I?m not sure what a bankruptcy attorney (me, in this case) should advise or require the client to do in the bankruptcy. Putting these debts on the son?s petition is against the client?s interest. Filing the petition without the mother?s credit cards may further the client?s fraud. It may make a difference if the client is willing to reaffirm these post-death charges. The client has not disclosed his intentions, and I have not addressed the issues with him. If I send him to another attorney I assume the client will not disclose to the next bankruptcy attorney anything about the debt on the mother?s cards, and I cannot divulge this information to the next attorney or the credit card companies.

Its an interesting situation- some people just keep digging deeper holes for themselves.

Full post as published by Florida Bankruptcy Law on December 03, 2009 (boomark / email).