- Lemberg Law
- FDCPA – Debt & Credit Complaints
- Debt Law: What Happens to Debt When You Die?
Deceased Debt & Debt Law
When a person passes away, their estate is obligated to pay any outstanding debts. The person’s estate consists of the assets they owned (money, real estate, vehicles, and so forth) when they died. However, there are wide variations in state and local debt law regarding estates and probate (the process by which a will is implemented), and the issues can get murky depending upon individual circumstances.
If there isn’t enough money in a person’s estate to cover their outstanding debts, then – more often than not – debt law says the debts remain unpaid and the creditors write debt off as a loss. There are times, however, when a friend or family member may be obligated to pay all or part of the outstanding debt. For example, if you co-signed a loan with the person who passed away, according to debt law you may be liable for the debt. Again, depending on the state in which you reside, you may have further obligations to pay. Rules differ, for example, in community property states, where the surviving spouse might be liable under debt law for the debt of the spouse who passed away. In addition, some states have a debt law that says that the surviving spouse is required to pay a particular type of debt; more often than not, it’s something like the deceased’s healthcare-related expenses, rather than the deceased’s credit card debt.
When someone dies, there’s a person who is appointed to tie up the deceased’s financial affairs. This person is called the executor. Even if the person who passed away didn’t leave a will, someone will be appointed (perhaps by a court or by other means, depending on the state) or assume the responsibility of handling the deceased’s finances.
If a Debt collector is harassing you about a deceased loved one’s debt, Lemberg Law can help. To speak with a representative directly and immediately call 844-685-9200 for a free, no obligation case evaluation. Let us help you get the justice you deserve.