Dealing with Debts After Death

When a decedent passes away, his or her administrators and beneficiaries may be held responsible to cover any debts that need to be paid. Settling the debts of a loved one can prove to be very difficult. Family members can sometimes be required to make important financial decisions on behalf of their deceased relatives during this emotional time, especially about outstanding debts.

Despite the tragedy of a death in the family, creditors will still call and demand that they are repaid for any expenses that have not yet been satisfied. Family members may be required to pay for a deceased relative's credit card debt, student loan debt, mortgage loans, and other financial obligations. Relatives are not generally responsible for paying the debts of the deceased, and creditors can sometimes be required to cover the costs of the debt on their own.

To determine whether or not you are responsible for a deceased relative's debts, you will want to determine whether or not there is money in the state to cover the costs. Also, you will need to determine whether or not there was a will. It is important to note that relatives are never responsible for paying off debts that were not jointly owned at the time of the debtor's death.

In some cases, when an individual dies, his or her debts die along with that person. You will probably be held responsible for repaying the debts of a deceased person at the time of the debtor's death if you owned a part of the debt at the time, or if you received substantial benefits from the de bt. For example, if your parent took out a loan to pay for your personal living spaces, and then passed away with the loan unpaid, you may be required to satisfy this debt since it directly affected you.

Credit card debt is a very common outstanding debt that individuals leave behind. This debt belongs tot the credit card account holder and relatives should not be required to pay for their deceased family member's debts. The only time that they may be responsible is if they cosigned a loan with the debtor, or if the debt is listed on a joint account. Those who live in community property states may be liable for debt if they are married to an individual that has collected expenses.

While creditors will typically exercise their right to contact relatives for credit card debt, all payments are voluntary. It is important to keep this in mind as you work through your loved one's debts. Also, similar to credit card debt after death, mortgage debt belongs only to the borrower of the mortgage loan. The only time that another person has to take on this cost is if the survivor was married to the mortgage holder and obtained the debt because he or she plans to remain in the house.

If you have to pay a decedent's debt, you have permission to do so by using the finances from the individual's estate. One exception is life insurance policies. These are not a part of an estate, and the proceeds will go directly to the named beneficiary. Beneficiaries are not obligated to use the proceeds to pay for any remaining debts for this reason.

This is essentially secured money that cannot be taken by any creditors for any reason. If you have been contacted by creditors and are being compelled to pay debts of a decedent, then you need to talk to contact an estate planning lawyer for legal advice. With the right attorney there to help you, you may be able to make sense of all of the complications.