My father in law just died, credit cards maxed out , equity loan on condo. Who's responsible for debt?

Question

Will shows ex wife-also dead and children 1 dead, 2 living as heirs to estate.

Answer 1

There may be life insurance on some of the loans, especially the equity loan. Check.

Otherwise if there is any equity left in the condo, the creditors will almost certainly have to be paid (by the estate, assuming the condo goes into probate -- if it was in trust then various different outcomes are possible).

You have to check whether in your state/country a will is voided upon divorce. Also check for a later will. The likely scenarios are:

-- assuming dead child left no issue, 2 surviving children take everything, after debts are paid. If dead child left issue, they take dead child's share

-- if ex-wife had children with another man, then (and only then) you have to find out whether your state/country voids the will upon divorce. Otherwise the result is the same as in scenario #1 because intestacy (no will) would have the same outcome.

Answer 2

In California, and I think the general rule, is that the estate is responsible to pay the debts. In other words, you, or whoever the executor is, will have the responsibility to collect the assets of the estate, pay the debts out of those assets, and then distribute what is left to the heirs. If there are more debts than assets, then the creditors go without. Generally the probate court will determine ahead of distribution that there are insufficient funds and give the creditors a pro-rata distribution so that all get a percentage instead of some being paid and some not. As indicated in the other answers, if there are other names on the debts besides the decedent, then that joint account owner will still have responsibility for that particular debt. Usually the house has enough value to pay off the debts.
Good luck on your probate experience.

Answer 3

His estate is responsible for any debts. However, it is up to the creditors to collect from the estate themselves unless the heirs just voluntarily pay off everything. Secured creditors can take back their collateral--condo, cars, etc. but unsecured could be left out if there is no estate and/or if they don't file a claim with the estate.

Answer 4

The Estate is responsible. All dept gets paid out of the Estate first and then anything that is left over gets distributed amongst the heirs in accordance with the Will.

Answer 5

If the heirs accept the will, they also accept the debts and will have to pay up. The heirs can deny the will legally by going via their lawyer. That means they wont get anything. If there is a lot of debt, make sure the children of the heirs also deny the will (if the heirs themselves did) as the debt will then fall onto them. Good luck!

Answer 6

First the estate will have to pay for the debts. If there is no estate or will, it will have to be dealt with case by case. On the credit cards send back a letter stating person is deceased.

Answer 7

That depends. If the children accept the condo, they accept the equity loan on it and the credit card debts as well.

Answer 8

His estate - and anyone else co-signed onto any of the loans, including those jointly responsible for the credit card(s).

Suggestion: Don't come HERE for legal advice - call a lawyer!

Answer 9

the person holding his estate is responsonsible. what typically happens is his estate is held by probate court for any debt owed, typically 6 mos. Creditors will have to file papers for payment. If no on files for payment his estae is released to whom ever is in charge. Hopefully he has a will naming an executor.

Answer 10

I would think he is unless there's more than one name on the accounts. You might want to see if he had any sort of insurance on ihs accounts. He might have been paying a little extra so that if he died without having paid off certain debts, the debt was cancelled.

All the best to you.