By JACK SIRARD
THE SACRAMENTO BEE

Q: I am a recent widow and have been told by another widow that I am not responsible for my late husband’s credit card bills if his name appears first on the account. I maintain that if my name is on the account at all, I am equally responsible for the debt. Will you please let me know who is correct. — Valerie A., Sacramento

A: It’s never easy and always unfortunate when a major event in our lives ends up in a crash course in personal money management.

Well-meaning friends offer advice that worked for them but may not fit your circumstances.

The real question in your case, says Donald Rehorn, community liaison of the Consumer Credit Counseling Service of the Sacramento region, is: “What effect does the fact that California is a community property state have to do with this situation?”

In community property states, property acquired and debts incurred during the marriage (called community property and community debts) are joint, he says.

“Even if one of the spouses objects to the purchase, the objecting spouse is out of luck because the debt belongs to both,” Rehorn says. “Very much like the partnership it is, one spouse can encumber the other.”

Both spouses are generally liable for all debts incurred during marriage — unless the creditor was looking to only one spouse for the repayment, Rehorn explains.

“For example,” he says, “if the husband put financial information only about himself, such as a bank account with funds containing money owned before the marriage on a credit card application, the wife would not be liable to pay.”

Spouses are not generally liable for the separate debts of their mate incurred before marriage or after permanent separation, he adds.

“The widow is correct in her belief that she owes the debt because her name is on the credit card,” Rehorn says.

However, when the law is involved, he adds, it’s always a good idea to consult with a professional who works in the field.

Q: Can you tell me when opening a line of credit would be a smarter move than a loan consolidation? We were looking into a loan for consolidation purposes, and our mortgage lender said it would be better to open a line of credit. — Cheryl P., Sacramento

A: Is the mortgage lender talking about a home equity line of credit or a personal line of credit?

While a lot depends on a person’s circumstances, a home equity line of credit usually works best, according to Dennis Sill of Sill and Associates, a company that specializes in debt management.

He says that a personal line of credit comes in second, followed by credit based on a loan consolidation.

“The reasons center on cost and tax deductibility, with the home equity line being the best,” Sill says. “A loan consolidation would have the highest costs, a personal line generally less costly and a home equity line could have the lowest costs.”

In addition, a home equity loan is the only one that can allow the interest paid to be tax deductible.

Whenever an individual is looking at a loan, Sill advises paying careful attention not only to the interest rate but also to the repayment terms and any fees associated with the loan.

“Many people utilize a home equity line to resolve unsecured debt issues such as credit card debt,” Sill notes. “As a home equity loan, the debt becomes secured by their home. If they use their home as collateral and default on paying that line, they risk losing their home.”

Q: I’m having a terrible time finding out which of the stocks we hold in our investment club are considered small-, mid- or large-cap. How do I find that out?

The stocks are: Agilent, Advanced Micro Devices, Amazon, Cisco Systems, Dell, Disney, Dollar Tree Stores, General Electric, Home Depot, Hewlett-Packard, j2 Global Communications, Lockheed Martin, Tootsie Roll, Waste Connections and Washington Mutual. — Sandra V., Sacramento

A: There is no real hard and fast rule on what constitutes a large-cap stock or a small-cap stock. But these are the general guidelines:

Large-cap stocks are those with a stock market capitalization (price of the shares multiplied by the number of shares) of more than $5 billion.

Mid-cap stocks fall in the $1 billion to $5 billion range and small-cap stocks are those from $300 million to $1 billion. Anything less than $300 million is a micro-cap stock.

In your case, all your holdings fit in the large-cap category except Advanced Micro Devices, Dollar Tree, Tootsie Roll and Waste Connections, which are mid-cap stocks, and j2, which is a small-cap stock.

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