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Inheriting Debt: What Happens When Your Parents Die with Significant Debt?

January 25, 2023

Diane S. Kotkin

Q:  My father passed away last month with a very large mortgage and substantial credit card bills.  The credit card companies call me multiple times a day.  Am I personally responsible for these debts?

A:  In general, children are not personally liable for a deceased parent’s debt.  A person’s debts, however, do not disappear when they die. The debts are still valid and owed.  If your father owned sufficient assets, the Personal Representative/Executor/Trustee will pay creditors as part of the estate or trust administration.  If there are not sufficient assets in the estate or trust, any unsecured debt will go unpaid.  If the debt is secured (such as a mortgage secured by real property or a car loan), the bank has the right to foreclose on the home or repossess the vehicle if payments are not made.  

As expected, there are a few exceptions to the above where you are indeed responsible for the debt.  If you are named as a joint owner on a credit card account (not an “authorized user”), you are responsible for the debt. If you co-signed or agreed to be a guarantor on the deceased parent’s debt, you must pay the debt. Finally, if you are serving as a Personal Representative/Executor/Trustee and did not follow the laws regarding notice to creditors and other probate rules, you can become personally responsible for the debt.

If your parents had significant debt when they died, you should seek competent legal counsel from an experienced estate and trust lawyer.  They can assist you with settling the estate and negotiating with creditors so that you are protected. If you have questions or concerns about who is responsible for a deceased parent’s debt, please contact us.

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