Many people pass away with credit accounts still open. These may be credit cards, automobile loans, mortgages, medical bills and a host of other types. Those debts typically don’t go away when the account holder passes away.
Decedent’s debts are handled during the probate process, but there are a few exceptions to this. If the estate has the money or assets to pay the debts, the administrator will handle those payments. The creditors may have to file a claim with the estate to make this happen.
If there isn’t enough funds within the estate to pay the debts, the estate can pay what it can in a specific order. Once funds are depleted, the estate won’t be able to pay any other bills and the beneficiaries won’t receive anything. This can create issues for beneficiaries. Here is what you should know:
Are loved ones ever responsible for paying a decedent’s debts?
A decedent’s loved ones may be responsible for paying debts if they are named as a joint account holder or co-signer on the account. Some debt collectors may attempt to get loved ones to pay off the debts. However, those loved ones may need to direct the debt collector to the administrator of the estate. Loved ones shouldn’t ever provide personal or financial information.
Administering an estate requires the individual to understand how to handle all expenses and debts. It may help them to receive assistance from someone who’s familiar with legal matters. Any missteps could be costly to the beneficiaries and may lead to a prolonged probate process.
