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My late brother owed me a fair amount of money, mostly a mortgage currently valued over $400K. He said (in writing) that I would be paid by his widow out of his $500K life insurance. His widow is the beneficiary of that insurance.

His widow has paid me nothing. She says that almost all the life insurance money is gone because my brother allegedly opened up credit cards in her name without her knowledge, and she only discovered this after he died.

She's lied to me before. But I'm trying to see if she could conceivably have that much credit card debt. As far as I know, her sole asset is joint ownership (with my brother) of a $500K house (2021 estimate), and minimal savings. There is no second mortgage on the house. She will possibly inherit his 25% share of another property assessed at $200K, but my brother had so much debt that this property will likely go to creditors. She worked for 10 years at around $15-$20/hour, quit in 1998, resumed around 2016 at somewhat lower pay.

How much credit could someone with these financial assets get?

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    Probate attorney ASAP.
    – littleadv
    Apr 22 at 18:08
  • Did you officially file the paperwork with the county/city/town showing the mortgage on the property? Was the mortgage debt reported in a way that it would show on their credit report? If a credit card company didn't know about it, the mortgage wouldn't reduce their borrowing power. Apr 23 at 12:07
  • @mhoran_psprep Yes, the mortgage was filed with the county and can be found in the county's public records search system. I have no idea if it appears on credit reports.
    – Dev1
    Apr 24 at 17:46

3 Answers 3

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Bad news.

Even though your brother put it in writing, you have to determine if that life insurance is part of his estate. If it is not part of his estate, then you likely don't have any rights to it and none of this other conversation between you and his widow is relevant whatsoever.

Any debts against your brother's estate initially have to be dealt with in probate court if the widow isn't playing ball. There may be nothing left! Anything that isn't paid by the estate might be the responsibility of the widow, depending on what state they're from.

I am not an attorney.

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Ignoring the estate and will issue, and focusing on your actual question — credit is not based on income and can completely eclipse it. It’s not impossible to get credit that is 10’s or even 100’s of times your annual income.

With a excellent credit rating and an income of 25-35k, credit in the amount of 200 to 300k would not be impossible with various cards, particularly if they were all requested at basically the same time, so that the requests were processed before the cards were reported.

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With credit card debt, low-paid or stay-at-home spouses can be issued credit cards based on household income, i.e. on your late brother's income. The story could be true, or partially true.

That said, the mortgage needs either to be made current (caught up with payments) or to be paid off (to you). It may be time to start foreclosure proceedings.

https://www.alllaw.com/articles/nolo/foreclosure/nonjudicial-foreclosure.html

By the way, isn't it rather disloyal to her in-laws if she used insurance money to pay credit cards off, while stopping mortgage payments to you? Or does she expect you to take a $400k hit to say 'sorry' for your brother's alleged behavior?

She says that almost all the life insurance money is gone because my brother allegedly opened up credit cards in her name without her knowledge, and she only discovered this after he died.

If the widow files for bankruptcy in response to your foreclosure, you will then see the true state of her finances, in federal court. (And she has to pay for her own bankruptcy, not you!)

As commented above, you may find the need to consult a probate attorney. I think it may be cheapest to start with foreclosure, a routine proceeding for a real estate lawyer.

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