Q. I'm concerned that my bank may be having problems. If it fails what happens to my CDs? Do they get redeemed immediately or will they be bought by a new owner?
Denny Eden Prarie, MN.
A. The new owner of the bank will determine if they will continue to pay the same rate of interest until the original maturity date. If the new bank does not pay the original rate of interest you are allowed to redeem the CD without any penalty. The new bank should notify you in writing that they are changing the terms of your CD.
Q. Is identity theft possible after someone has died? What problems could this cause for you if you're already dead?
Peter Newark, NJ.
A. Yes, identity theft can occur after you die. In fact it's a growing business in this economy. It's imperative that once someone has died that their family, close friend, or executor contact all known creditors and the social security administration (SSA) to notify them of the person's death. You' can call them and they'll close the account pending receipt of the death certificate. You should contact the SSA even if they are not receiving benefits because their social security number status will then be changed to deceased and anyone trying to get new credit in the decedents name & number will be prevented from doing so. Identity theft of a deceased person can cause problems for their estate, especially if the will must go thru probate. While it should be easy to document that the person died on a certain date and that any new accounts or debts created after that date would not be legitimate, it could still take a lot of time & effort to resolve these issues.
Q. Now that my house has dropped 30% in value when can I expect a refund on the premium I've paid for my homeowners insurance? I'm paying for a higher replacement value than it would cost today to re-build.
Kathy Orlando, FL.
A. Don't hold your breath on getting a refund check. You can & probably should get a certified appraisal or possibly an estimate from a builder if your 30% is equal to $ 100,000 or more. You may be able to get your insurance company to re-write the coverage limits within the current policy period and then you'll benefit from a lower premium going forward.
Q. If I'm unable to re-pay a loan I took last year from my 401k plan, what will happen? If I lose my job with this employer is the loan forgiven?
Michael Phoenix, AZ.
A. No, the loan is not forgiven if you leave your employer. You normally have 60 days to repay the loan, check your 401k plan documents. If you are unable to re-pay the loan it will be treated as an early withdrawal and you'll have to pay income tax & a 10% penalty. The penalty will be waived if you are 55 years or older & your default is due to loss of employment.
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