When a family member or parent dies is credit debt transferred to a living child or relative?

Answer 1

Unless someone else is a cosigner or coapplicant on the account, no one else will be responsible for the debt.

The assets of the estate will be used to pay any outstanding debts before any of the heirs can be given anything. This is true even if the person left a will leaving money to anyone. If there are not enough assets to pay all the debts, those debts will be written off by the creditors.

Simply send a certified copy of the death certificate to the creditors with a letter saying there were no assets to be distributed to the creditors or heirs.

If the debt is for a secured loan, such as a house or vehicle or other loan that used collateral, the debt must be paid or the property must be given to the creditor.

Answer 2

The debt is only transferred if the relative asks it to be transferred or if the relative signed for the account.

They can be on the card and not be responsible for the card.

What happens is the creditor attaches the debt to the decedent's estate. If he/she is married, this may mean putting a lean on the community property shared by the spouses. If they are single then there should be no problem.

Normally the debt collectors will agree to settle if you are willing to pay a portion of the debt in lew of the lean. If you chose to do this they will still report the loss to the IRS and it will have to be included on the decedants final return. Been there done that.

The key thing here is that the debt can be transferred but you have to assume the debt for the creditor to do so. Meanwhile, it will slow down finalizing the estate if there is one.

Answer 3

Credit debt is transferred to The Estate of----whoever died. If there is not enough money in the estate to pay the debt, then the Executor of the Estate or the Administrator of the Estate is responsible for the remainder of the debt.

Usually, if there is remainder debt, the children of the family pool together equally to pay off the debt.

WARNING: No one is the same person you believed they were when an estate is being administered. The brothers and sisters you thought you had will, more than likely, turn into sharks. Sorry, but that's the way it is.

Answer 4

Debt is the obligation to repay money loaned to the decedent. Unless the living child is somehow also obligated, (is a co-signer on the credit card, mortgage, etc) then the debt is not the living child's responsibility.

HOWEVER, that does not mean that the living child will not pay, indirectly. When they die, the assets they leave behind are called their estate. If they had a will, the will will (usually) direct that all debts, taxes, fees, etc be paid from the estate. Therefore, any assets of the estate will be liquidated to pay debts and taxes first. After that, the remainder of the estate will be distributed according to either the will, or the laws of intestacy of your state.

Without more infomation it is impossible to guide you further. You should contact a probate attorney in your state for specific guidance on this situation. If you need an attorney and don't know one, contact your local or state bar association for a referral.

Answer 5

Good question. Credit debt, like any other debt, becomes
a possible claim against the ESTATE of the decedent.

The creditor must generally file a CLAIM against the estate, within some
specified time period (like a "Statute of Limitations").

No debt is assigned specifically to any particular
relative, heir, spouse, or legatee.

If the creditor gets paid, it comes out of the
general funds of the estate (excluding Life
Insurance proceeds, which are a contractual benefit
and not part of the estate.)

There may be other creditors, such as the hospital
where the decedent may have been in, automobile
car payments, Internet Service Providers, the government
for income taxes, etc.....

Answer 6

If you mean would a living child or relative be responsible for a deceased parents debts the answer is no. When my mom passed away I took care of all the arrangements(she had insurance), paper work, and everything she left behind. What I was not responsible were her doctor bills, credit cards etc. The IRS sent me notices of money owed by her for six years until I got smart and sent them a copy of her death certificate. Companies will always try to make someone else pay but legally you don't have to unless you signed something that said you would.

Answer 7

So far you have some good answers some bad

In general your answer is NO! The estate is responsible.

However, the administrator or executor of the estate should provide copies of the death certificate to creditors or their agents.

The attorney or executor of the estate will post a legal notice in an appropriate publication. This is part of the probate of an estate and a complete answer depends upon the laws of your state, is their a will, and if family members were somehow jointly and severely liable for any accounts. That means a party on the account.

An attorney needs to be consulted.

Answer 8

As far as I know, the credit debt is only between the husband and wife. So it would neither be transferred to a living child nor the relatives.

Answer 9

Every state has it own set of rules about what someone inherits. But I found this site below for you and it seems to fit over the whole USA. In short, no you don't inherit your parents debt. The estate pays it and then the kids can have what's left after all debt is paid. If iin doubt, most attorneys will let you have a 30 minutes free counseling session and you could ask that question as it pertains to your state.

http://www.bcsalliance.com/y_debt_parentsdebt.html

Answer 10

It certainly is. Any debts are taken out of the estate, if there is not enough money in the estate to cover the debts, then yes it is passed on to next of kin. There is certain insurance you can buy, like when buying a car you can pay extra for insurance that if you die the car is paid off. There are certain things you can buy that carries this kind of insurance. You can file a bankruptcy on the estate. Best thing to do is like my father has done. He has all his property in a savivorship. Mine and my brothers names are on all his property. So when he dies, it is automatically ours. No taxes and does not go into estate. So cant be sold to pay off bills. But the property has to be on the surivorship for at least 3 yrs before it is legal. Some states may do this differently.