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What Happens to Someone's Debt After They Die?

Many people may wonder, “Am I responsible for the debt of a deceased parent or relative?” or “What will happen to my debt after I die?” In short, it depends.

Who is responsible for debt after someone dies?

In general, a person’s estate is responsible for paying off any debts after his or her death. The appointed executor of the estate is responsible for contacting and handling the closing of debts and financial accounts. If no one was appointed executor, or the decedent is considered intestate (they don't have a will), the state will assign an administrator. While debts may decrease the overall value of the estate (and therefore any inheritances), they are not directly passed on to family members by default. If there is no money in the estate to pay off debts, the estate will be considered insolvent. However, there are some exceptions, as debt can be under multiple names.

When could I be liable for the debts of a deceased relative?

There are a few cases in which family members may still be liable for the debts of a deceased relative. These include:

  • If you are a spouse of the deceased in a community property state. If you were married to the deceased in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), half of any community property could be eligible to pay off any debts that were incurred while the two of you were married.
  • If you were a joint account holder or a cosigner on a loan with the deceased. If the debt is also in your name, you will continue to be responsible for the debt even after the other person passes away.

What happens to someone’s mortgage after they die?

Similar to a credit account, if the mortgage was jointly held by a spouse or other individual, that individual will continue to be responsible for payments. If the mortgage was solely held by the deceased, the estate is responsible for continuing payments or must sell the property in order to pay off the debt. The executor of the estate is responsible for ensuring the mortgage is paid while they're handling the estate.

Can debts be deducted from life insurance payouts?

In general, neither life insurance nor retirement plans are considered to be part of an estate. Therefore any payouts are protected from being liable to pay back any debts of the deceased.

How should I respond to debt collectors if I’m not liable?

Even if you’re not liable for the debts of a deceased relative, you may find that eager debt collectors continue to reach out in the hope of getting paid back. In some cases, family members choose to pay back the debt of deceased loved ones that they aren’t liable for, but if you choose to do so, this is completely voluntary. If you decline to pay the debts and continue to be contacted by creditors, you may want to consider reaching out to a debtor attorney to learn more about your rights.

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Last updated June 15, 2022
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