It is a common occurrence that creditors start contacting grieving relatives to nudge them into paying their deceased loved one’s lingering debts. If you ever find yourself in this situation, here is what you need to know.
You do not need to worry about inheriting debt. In most situations, debt does not get passed down to heirs. However, creditors typically won’t tell you that. In fact, they are oftentimes depending on your sense of duty to pay off those debts. They may seem kind and sympathetic, but their ultimate goal is to persuade you into paying.
There are exceptions to the rule. Below are four instances in which you might still be on the hook for a debt after your loved one dies:
- You co-signed on the debt.
- You live in a community property state.
- You are the spouse, and state law requires you to pay certain debts such as medical bills.
- You were responsible for resolving the estate and did not follow state laws.
Estates may be liable. Although you are not personally responsible for your loved one’s debts, the estate may be. The estate is made up of your loved one’s remaining assets and may be required to cover the costs of outstanding debts left by your loved one. Creditors may file a claim in probate court. In which case, the money from the estate is used to pay those claims. What is left is what gets distributed to heirs.
If the estate does not have enough money to pay off creditors, it is considered insolvent. In that case, the unpaid debt should disappear. However, that might not stop some companies from calling you for payment.
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If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.