Unfortunately, when someone dies, their debt does not die with them. The debt is still owed and is often paid from the value of the deceased person’s assets. Such assets include, but are not limited to: life insurance policies, vehicles, houses, land, and any other types of property. The executor of the estate typically sells property in an attempt to cover the debts owed.

Family members, spouses, and children are not automatically responsible for the debts unless there is a co-signed loan or inherited property. In such cases, the co-signer or receiver of the inheritance could then be responsible for any associated debts. If inherited property has any equity left, other creditors will be able to apply a lien to the property in order to repay the debt.

For example, if Jane Doe’s mother passed away and Jane Doe cosigned with her mother on a loan for a car then Jane Doe would be fully responsible for that car loan. However, if Jane Doe had not cosigned with her mother and her mother passed away and Jane Doe inherited the vehicle, the lienholder can go after her mother’s estate or repossess the vehicle but they cannot go after Jane Doe personally for the debt. A creditor can only go after someone who has their name on the debt or after that person’s estate but not other individuals if they have not cosigned on the debts.

We will occasionally have someone call our office and they are the administrator or administratrix of an estate and are concerned a creditor will be able to go after them personally. If they did not cosign on any of the debt then they are personally free from any liability.

If a person filed bankruptcy and received a discharge before they die, the debts are wiped out.