Cancel credit card, pay a price

Q: If I cancel one of my credit cards, will it affect my credit score?

A: It depends on how long you've had the card. If you've had it for only a short period of time, and you have other pieces of credit that have been open and active for much longer, then no, it shouldn't affect it too much.

But if you carry a balance on a card and close the account before you've paid it off, or if you've had the card for 10 or 20 years, closing it will dramatically affect your credit score.

Q: My dad died in March and has credit-card debt. He has no real estate or vehicles. He was married, and lived with his wife in Illinois. We do not live there. Who is responsible for the debt? They acquired most of it when they were together.

A: My condolences on your loss.

When someone dies, their assets and debts fall into their estate. It's the job of the executor of the estate to tally up all of the assets (including ownership in real estate, cars, boats, personal property, brokerage and retirement accounts, etc.) and gather together all of the debts (mortgages, loans, credit-card debt, etc.). The assets of the estate are used to pay off any debts that were still owed.

If your father had credit-card debt at the time of his death and was single when he died, and in addition had no assets, his debts would effectively die with him. The creditors would be notified that the borrower had passed away without any assets. While they might try to get someone else to pay those debts (like his children), you most likely wouldn't owe anything on them. (If you had benefitted from the debts in some way, you might have to pay something.)

But because your father was married, if he and his wife incurred these debts together, then she would be responsible for paying them off now that he has died. The question is whether she was a cosigner to these debts or simply an authorized user of the accounts. If she was a cosigner to the credit cards, then she would be primarily responsible for paying them off. If she was simply an authorized user, it's possible that she would not be liable. She should speak to an estate attorney to go over your dad's affairs and figure out whether she has liability for those credit-card debts.

If you have other questions about these issues, and any responsibility you may have for them, you should also consider consulting with an estate attorney.

Q: My sister-in-law lives in a condo and pays a $150 monthly maintenance fee. Her roof is leaking and she has reported it to the office. This has been on going for several months. What are her options?

I say she should stop paying her maintenance fee and place the money into escrow until the repair is made. She reported it in writing so she has a record of her complaint.

A: Whoa! The last thing your sister-in-law should do is stop paying her monthly assessments. If she does that, she will have late fees and other charges added to what she owes. She'll also make her neighbors mad, which might make them less willing to help her out.

But she's smart to have made her complaint in writing. She now has a written record of the complaint. The first thing she must determine is whether her association is responsible for roof leaks or whether she is. Some condominium associations place the responsibility for roof maintenance on each homeowner. But it just depends on the association and the documents.

If she knows that the roof is the association's responsibility, her next letter to the association should indicate whether the leak has gotten worse and whether other problems are occurring. If the leak is causing other damage to the building or, even worse, mold is starting to grow, the cost to make repairs to the building will grow exponentially.

The question she should be asking is why the management company isn't being more responsive to the problem. The leak could pose legal risks to the association. If she determines that the association is in the process of hiring a company to make repairs, she might have to wait until bids come in and the work gets done. If the association has done nothing, she will have to do more to get the association's attention to the problem.

She should be raising the alarm with everyone who sits on the condo board, and making a complete pest of herself (in the nicest way possible, of course) with the management company until she gets a date when someone will come out to inspect and repair the problem.

She should point out to the association that repairing the leak sooner rather than later will avoid additional expenses as the damage gets worse, including structural problems, as water damages the roof and its other components and, worse, mold starts to grow, which the costs in cleaning up the problem.

If no one takes action, she should consult with a real estate attorney who can advise her of her legal options, which might include suing the condominium association. That would be an unfortunate move, because it's likely to damage her relationship with her neighbors and cause money to be spent in legal fees that could otherwise have been used to repair the problem.

Depending on how the condo declaration, rules and regulations of the building are written, the condo building is likely responsible for fixing the exterior of the condo building, and may even be responsible for repairing up to or including the drywall in her unit. Wherever their financial responsibility stops, your sister-in-law will have to pick up the tab.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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