Shirley B. Whitenack was quoted in the November 13, 2011 Star-Ledger’s Biz Brain column:
Question: When my father dies, I will be the sole heir of his modest estate. I am trying to determine if I will have any financial liability when he passes, specifically with respect to my parents’ marital home. The original mortgage and deed was in both parents’ names. They defaulted in 1998, and the loan was "charged off" on credit reports several years ago. Is there still potential for the title holder to seek out restitution? If so, what’s my financial exposure if my father dies, but my mother is still alive?
Answer
*** When a debt is "charged off" on a credit report, it means that the account was not paid for at least 120 to 180 days. After that point, the creditor — the entity to whom the money was owed — decided that the debt would not be collected and wrote it off.

The creditor takes a federal tax deduction and often sells the debt to a debt collector, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

"A charge-off does not relieve the debtor from a legal obligation to pay the debt," she said. "When a lender forecloses on residential property, that lender can file a separate deficiency action on the mortgage note for the difference between the sale price and the fair market value of the property."

Such an action, however, must be filed with the court within three months of the sale, Whitenack said.

"Assuming that there was a foreclosure against the property resulting in a default judgment in 1998 and the lender did not pursue a separate deficiency action, the heir should not be held liable for the deficiency," Whitenack said. To view the entire article click
Question: When my father dies, I will be the sole heir of his modest estate. I am trying to determine if I will have any financial liability when he passes, specifically with respect to my parents’ marital home. The original mortgage and deed was in both parents’ names. They defaulted in 1998, and the loan was "charged off" on credit reports several years ago. Is there still potential for the title holder to seek out restitution? If so, what’s my financial exposure if my father dies, but my mother is still alive?
— Wary mother of two
Answer
Talk about planning ahead.

When a debt is "charged off" on a credit report, it means that the account was not paid for at least 120 to 180 days. After that point, the creditor — the entity to whom the money was owed — decided that the debt would not be collected and wrote it off.

The creditor takes a federal tax deduction and often sells the debt to a debt collector, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

"A charge-off does not relieve the debtor from a legal obligation to pay the debt," she said. "When a lender forecloses on residential property, that lender can file a separate deficiency action on the mortgage note for the difference between the sale price and the fair market value of the property."

Such an action, however, must be filed with the court within three months of the sale, Whitenack said.

"Assuming that there was a foreclosure against the property resulting in a default judgment in 1998 and the lender did not pursue a separate deficiency action, the heir should not be held liable for the deficiency," Whitenack said.

To view the entire column click nj.com.