Do Your Debts Die With You?


To start with your debts don’t die with you. They survive your death. If you have a Will the obligation to deal with your debts falls upon your executor after the Will is probated. If you have no Will an administration proceeding can be brought by the next of kin to appoint someone to handle your affairs.

Most Americans Die with Debts

If after you die your debts aren’t paid it will have a negative impact on your credit rating. But of course you won’t care about that because you will be dead! If you have assets your creditors can file a claim in your estate proceedings against the assets. In estate proceedings debts are paid before there is distribution of the assets to beneficiaries in a Will or next of kin in an administration proceeding.

Credit Card Debts

There is a statute called the Credit Card Act of 2009. This requires credit card companies to notify the estate quickly with regard to any debts of the deceased. The statute also prevents credit card companies from assessing additional fees of penalties while the estate proceedings are pending. There are situations where there are not enough liquid assets to pay the credit cards. In these cases the credit card companies may contact family members and request they pay the balance of the credit card debt. Be advised unless a family member has co-signed for the credit card, there is no obligation to pay these debts and family members will not be held liable by the credit card companies for these debts.

Unpaid Loans

If you have student loans which are pursuant to a federally backed student loan program these loans will be discharged upon your death. Private loans do not become discharged in the event of your death. Banks and other financial institutions will request payment from your estate. If there are no liquid assets to pay these debts from your estate and there is a co-signer on the loan they will go after the co-signer to pay the debt.

Mortgages and Car Loans

Mortgages and car loans are considered secured debts. The mortgage is secured by the home and the car loan is secured by the vehicle. In the event these types of loans are not paid the creditor can take legal action to repossess the car and foreclose on the house.

Doctors and Hospital Debts

Money owed to hospitals and/or medical providers are not discharged at the time of your death. These unpaid bills may become a lien against your estate. If there is a co-signer for these debts, the co-signer will be obligated to pay these debts upon your death.

Family Members Pressured to Pay Debts

Attorney Elliot Schlissel

Sometimes collection agencies and their telephone collectors seek to put pressure on family members to pay deceased relatives debts. Be advised, unless you co-sign for a loan you are not responsible to pay the debt of a deceased family member.,

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