Saturday, October 12, 2013
Coping with death is difficult enough without the decedent’s creditors calling you for collection. Here are nine things you should know about debt after death:
- In most cases, heirs are not responsible for a decedent’s debts unless they are jointly liable on the debt. This doesn’t mean creditors won’t still try and collect from them.
- The obligation to pay a decedent’s debts transfers to the estate. Therefore, debt collection requests should be directed to the executor or administrator.
- To prevent identity theft of the dead, the executor should notify creditors as soon as possible as well as the big three credit reporting agencies.
- Co-signers will be liable for debts while authorized signers or additional cardholders on credit card accounts are not. Authorized users should discontinue use of the card after the death of the main cardholder.
- Wait to distribute assets until after the estate has settled all debts.
- If you are a joint account holder on the credit card of a decedent and having trouble paying bills, ask the creditors about available options. This could give you more time to get organized.
- Creditors can be forced to write off debt if the estate has more debts than assets.
- Surviving spouses in community property states may be liable for debts even if they didn’t agree or know about them.
- Contact a consumer law or probate attorney if you have any doubts.
See Trisha Sherven, Debt After Death: 10 Things You Need to Know, Money Talks News, Oct. 7, 2013.