qbteachmt
Level 15

"In my mind, the creditor had two years (2018 & 2019) to collect the debt from the spouse if there were any grounds upon which they could enforce collection."

You can check on the statute of limitations for this State of residence:

https://wallethub.com/edu/cc/statute-of-limitations-for-credit-card-debt/25602

You might find that spouse is Lucky and is getting off easy.

"It seems unreasonable for the spouse to be responsible for tax on the sum forgiven. The client has very limited financial resources. Has anyone experience to share?"

Well, let's do one example:

She learns the husband had a hidden credit card account with a $10,000 balance, when he died.

"The debt was the husband's, in his name with his social security number."

Either that is or isn't considered hers, too, according to the laws that apply in their State and the card application and facts and circumstances. So, could she have paid it with funds at the time of death or not? If not, she would approach the card issuing company about settlement, often pennies on the dollar, at that time.

It's hard to believe she had no knowledge of this all this time. They attempt to locate and to get paid and they file notifications to addresses, as well.

Now she can't afford to pay it, and has to pay taxes on the total forgiven. But that is, once again, pennies on the dollar. I would consider this lucky.

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