When a person dies in debt is it wiped out?
by admin ~ December 24th, 2007 . Filed under: Credit .
pamela f asked:
When a person dies with debt - like credit card debt, is the debt wiped out or does the responsibility fall on family members and if so how is it determined what family members are responsible for paying the debt. I’m not talking about funeral expenses, but personal debt.
Tim Curtis
When a person dies with debt - like credit card debt, is the debt wiped out or does the responsibility fall on family members and if so how is it determined what family members are responsible for paying the debt. I’m not talking about funeral expenses, but personal debt.
Tim Curtis
December 27th, 2007 at 11:59 am
If the debt was solely in the individual’s name, the debt will be repaid from the deceased individual’s estate. If there is not enough assets in the estate to repay the debt, the debt is erased.
December 30th, 2007 at 2:55 pm
It falls as far as the decedent’s estate. The assests the person has when they die. If the debt is in a spouse’s name or some other responsible party’s name, then the debt becomes their sole responsiblity and they must pay off the debt. If you remove account holders before the person dies it is seen as fraud if it is within a reasonable time, like a few months or after the person is diagnosed with a terminal illness. Now you have the financial problem along with a felony charge of fraud. If the debt is a mortgage then that debt goes to whoever gains the house after it goes thru the estate process, to pay off other debts within the estate. If there is debt then any asset worth anything is sold to pay the debt. So there is a long line of events before any debt is wiped off the slate.
December 30th, 2007 at 7:40 pm
They take it out of the estate. After that, it is forgiven. Family members are not liable.
January 2nd, 2008 at 11:46 am
If they have nothing, then its wipe out
—————————-