In general, children are not responsible for their parents' debts. Debt is typically tied to the individual who incurred it, and creditors usually cannot pursue a child for a parent's debts after the parent passes away or if they are unable to pay. However, there are some exceptions and nuances to consider:
In the US no your debts are not transferable to your children. Unless your child has co-signed for a loan or credit card you have they cannot be held responsible for any debts that you have. You cannot just decide a debt is going to be paid for by your children either, it is your debt and you are responsible for it.
A creditor cannot go after a child to collect on a parent's debt if there is no contractual agreement between the child and their parents' creditors. However, a child may be personally liable if: They cosigned or agreed to be a guarantor on a parent's debt. They held a joint credit card with the deceased parent.
Your adult children cannot be held liable for your debts. If your minor children received money from you, and it was placed in a bank account, the account(s) could be attached. But their names cannot be added to any debt you incur, even if they are incurred on their behalf (school, medical).
When a loved one passes away, you'll have a lot to take care of, including their finances. It's important to remember that credit card debt does not automatically go away when someone dies. It must be paid by the estate or the co-signers on the account.
The FDCPA and Minors
Several of these establish guidelines that debt collectors must follow when dealing with minors. For example: A debt collector may not contact a minor unless the minor's name is listed on a debt along with his or her parent.
Your mother or father may have had substantial credit card debt, a mortgage, or cr loan. The short answer to the question is no, you will not be personally responsible for the debt, but failure to pay such a debt can affect the use and control of secured assets like real estate and vehicles.
The states that have such laws on the books are Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, ...
In most cases, the deceased person's estate is responsible for paying any debt left behind, including medical bills. If there's not enough money in the estate, family members still generally aren't responsible for covering a loved one's medical debt after death — although there are some exceptions.
There are still a few kinds of debt that may be inherited. These are generally shared debts, like co-signed loans, joint financial accounts, and spousal or parent debt in a community property state.
Medical debt and hospital bills don't simply go away after death. In most states, they take priority in the probate process, meaning they usually are paid first, by selling off assets if need be.
If your child left any debts or outstanding credit agreements, no one else should be liable for them unless the debt was taken on jointly or someone acted as a guarantor.
A debt collector can contact your spouse. A debt collector can contact your parents or guardian if you are under 18 years old or live with them. A debt collector can also contact your attorney and, if otherwise allowed by law, credit reporting companies (Equifax, Experian, and TransUnion) about your debt.
Create your own estate plan today
Many Baby Boomers plan to pass down inheritances to their loved ones, but some aren't so lucky. It may come as a relief to find out that, in general, you are not personally liable for your parents' debt. If they pass away with debt, it is repaid out of their estate.
Other states, such as California and Texas, prohibit Estate Recovery after the surviving spouse dies. The only exception is if the surviving spouse was also a Medicaid recipient.
In California, filial responsibility laws could obligate an adult child to financially support their infirm or indigent parent. Learn about how this duty of filial responsibility applies to estate and trust litigation by reading our in-depth analysis of California Family Code section 4400.
Should the children fail to provide adequately, they allow nursing homes and government agencies to bring legal action to recover the cost of caring for the parents. Adult children can even go to jail in some states if they fail to provide filial support.
All states provide laws holding parents responsible for children who engage in acts of vandalism or other property damage to another's property. Vandalism normally refers to public property owned by the government or schools. It may refer to private property when the value of the damage runs high.
You are not responsible for your parents' debt. This is true regardless of whether you inherit assets under their estate. However, a parent's estate must settle any debts before you can inherit. And children often share financial responsibilities with aging parents, often medical and housing costs.
Credit card debt doesn't follow you to the grave. Rather, after death, it lives on and is either paid off through estate assets or becomes the responsibility of a joint account holder or cosigner.
When a person dies, creditors can hold their estate and/or trust responsible for paying their outstanding debts. Similarly, creditors may be able to collect payment for the outstanding debts of beneficiaries from the distributions they receive from the trustee or executor/administrator.
The 7-in-7 rule, established by the Consumer Financial Protection Bureau (CFPB) in 2021, limits how often debt collectors can contact you by phone. Specifically, the rule states that a debt collector cannot: Make more than seven calls within a seven-day period to a consumer regarding a specific debt.
In most states, the statute of limitations for collecting on credit card debt is between three and 10 years, but a few states allow for longer periods, extending up to 15 years.
“Normally, if you're 18 or older, you're considered the responsible party, even if you're insured under your parents' policy,” Gundling said.