Most debt isn't inherited by someone else — instead, it passes to the estate. During probate, the executor of the estate typically pays off debts using the estate's assets first, and then they distribute leftover funds according to the deceased's will. However, some states may require that survivors be paid first.
Typically the answer is no. Debt collectors may try to convince you otherwise, or manipulate your sense of personal responsibility, but by and large, relatives are not responsible for the debt of the deceased. There are, however, exceptions.
Debt collectors cannot demand payment from family or friends
It is illegal for a debt collector to try and collect a debt from a family member or friend that does not owe the debt. For example, if a spouse incurs a credit card debt, the other spouse is generally not responsible unless they were a co-signer on the debt.
Individual Liability: Debts are usually tied to the person who incurred them. If one sibling takes out a loan or credit card in their name, the other siblings are not legally obligated to pay that debt. Co-Signing: If a sibling co-signs a loan or credit agreement, they become legally responsible for that debt.
In some states, you are always responsible for your spouse's debt after death, but only if the debt was accumulated while you were married. These are called “community property states”; they include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (as of 2022).
Do not promise to pay out of your own pocket, as it is not your responsibility unless you signed your name on the loan or account. Since a high debt load can cut into the inheritance, it is vital that senior citizens review their financial portfolios, retirement savings and obligations and avoid co-signers if possible.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
The debt collector cannot legally make any phone calls to people other than you and your spouse. If they do so, you may have a cause of action against them under federal or state law. Contact a consumer protection attorney today if you are experiencing aggressive debt collection practices.
Generally, family members are not responsible for debts incurred by other family members. So, for example, you would not be responsible for the debts incurred by your parents or adult children.
Debt collectors can contact you to try and locate the executor or administrator of the estate, but they should not discuss or mention the debt to you. You might want to tell the debt collector who the executor is.
If your mom or dad passed away with credit card debt the good news is that you are not personally responsible for their debt. After all, you never signed an agreement to be liable for paying their credit card bill. The responsibility was on your parent.
The family of the deceased aren't accountable for the unpaid debts unless there's shared legal responsibility. For instance, you might be responsible for someone else's debt after they've passed if you've co-signed on a joint loan that hasn't been paid off yet, or you have a joint account on a credit card.
If you contact the bank before consulting an attorney, you risk account freezes, which could severely delay auto-payments and direct deposits and most importantly mortgage payments. You should call Social Security right away to tell them about the death of your loved one.
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.
Even though your card issuer "writes off" the account, you're still responsible for paying the debt. Whether you repay the amount or not, the missed payments and the charge-off will appear on your credit reports for seven years and likely cause severe credit score damage.
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
Old (Time-Barred) Debts
In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement.
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. Call a consumer within seven days after having a telephone conversation about that debt.
Yes—but only if you co-signed on the debt or are a co-owner based on California's community property laws, as detailed above. Another example: An adult child can inherit debt if their name is on a loan or credit cards that their parent had when they died.
This is one of the duties that you have, and debts often need to be paid before the remaining assets can be passed on to the beneficiaries. But debt is not inherited like assets are, so you and the other beneficiaries do not have to pay personally.
Community property states: Spouses usually are held responsible for each other's debts in community property states. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.