Frequently Asked Questions (FAQs) About Debt After Death

Generally, you're not liable for the debts of your deceased relatives. So, if a family member dies, you aren't personally responsible for paying that person's debts in most cases. But the estate is. And, if you leave in a community property state, you would typically be responsible for paying your deceased spouse's debts.

Below, you'll learn the answers to common questions about debt after death.

What Happens to Debt When You Die?

Can You Inherit Debt From Your Parents?

Again, you usually won't inherit someone else's debt, with a few exceptions. For example, if you cosigned for any of your parent's debts or credit accounts, then you have a personal, legal responsibility to pay off those debts.

When you "cosign" on a credit contract with someone else, you each agree to be responsible for the debt. You promise to pay the debt if the other person doesn't, regardless of whether it's due to death or some other reason. Simply put, if you're a cosigner on any account with your deceased parent, your responsibility to pay the debt survives that parent's death.

How Community Property States Handle Debt After Death

Death doesn't wipe out debts. But in most situations, friends and relatives aren't responsible for a decedent's bills if the estate doesn't have enough money to pay them. In fact, it's illegal for creditors to try to collect the deceased person's debts from anyone who didn't sign the contract creating the debt—unless the decedent was your spouse and you live in a community property state.

In community property states, both spouses share equally in each other's income, assets, and liabilities. So, in these states, spouses are each equally responsible for paying each other's debts as long as one spouse acquired the bill during the marriage. It doesn't matter whose name is on the bill. If one spouse owes money to someone else, that creditor can sue and get a judgment against both spouses. For example, if one spouse racks up a $50,000 debt, the other spouse is also responsible for paying the debt.

What Are the Community Property States?

The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (Alaska allows married couples to opt into a community property system. In Florida, Kentucky, South Dakota, and Tennessee, spouses have the option of identifying property held in trust as community property.)

In these states, spouses are generally responsible for the other's debts, subject to a few exceptions. So, a surviving spouse is usually responsible for paying the bills of a deceased spouse.

Are You Responsible for Your Deceased Spouse's Debt?

Spouses are only responsible for each other's community property debts, which are bills incurred during the marriage. However, spouses aren't liable for each other's separate debts. These are the bills that the spouse already had before the marriage.

Also, only one spouse is usually liable if the debt didn't benefit the "community." For example, if one spouse put on a credit application that the other spouse's income wouldn't be used to pay the debt or charged the expenses of a vacation while the other spouse stayed home, the nonborrowing spouse probably wouldn't be responsible for paying the debt of the borrowing spouse.

Other Options for Dealing With Your Deceased Spouse's Debts

If your deceased spouse's debts are significant and you don't have the money to pay them, you have other options available.

• Getting rid of the debts in bankruptcy. If you don't have the money to repay your deceased spouse's debts, you might consider consulting with a bankruptcy attorney. If you qualify for a Chapter 7 bankruptcy, you can likely get rid of many, if not all, of the bills. Debts such as credit card debts, medical bills, and personal loans are often discharged (eliminated) in bankruptcy.
• Some people are judgment proof. A creditor won't be able to collect from you if you're judgment proof. You might be judgment proof if your income is protected from garnishment and you don't have many (or any) assets like a house, personal property, or savings to pay off debts. However, being judgment proof is sometimes temporary. Your financial situation could improve.

What Happens to Credit Card Debt When You Die?

When a person dies, their credit card debt isn't automatically wiped out. Whether a credit card company can recover its debt depends on state law, the amount of property in the decedent's estate, and if anyone else cosigned the obligation.

Do I Have to Use Insurance Proceeds to Pay My Parent's Debts After Death?

If you receive life insurance proceeds payable directly to you, you don't have to use them to pay your parent's debts. As the named beneficiary on a life insurance policy, that money is yours to use. You're not responsible for the debts of others, including your parents, spouse, or children, unless the debt is also in your name or you cosigned for the debt. (Again, an exception to this general rule is in community property states. In those states, you're likely liable for your deceased spouse's debts if they were "community" debts.)

That money belongs to you if you're a life insurance policy beneficiary. Your parent's creditors can't force you to use it to pay that parent's debts.

What Are the Consequences of Not Paying Debts After the Death of a Family Member?

The consequences depend on whether the deceased owned property that must transfer through probate or whether the property had existing liens against it.

Claims Against Probate Property

If the deceased person had assets that have to transfer through probate, their creditors will be able to file claims in the probate court. Typically, property that has to transfer through probate is property where the deceased person held legal title in their name alone, such as real estate, bank accounts, or automobiles. The probate court won't transfer the property to the heirs until the administrator or executor pays all the debts.

If you expect any of the estate's property to go through probate, you should decide whether it will cost you less to settle with the creditors now or have the administrator or executor pay them through probate. An attorney can help you figure this out.

Liens Against Property

If the creditor had a lien against the deceased person's real estate, that lien must be paid before the property can be sold or transferred. If the deceased person's mortgage, for example, goes unpaid, the lender may foreclose on the house.

Similarly, if the deceased person owned a car and was making payments, the lender may repossess the car after the payments stop. If you want to keep these kinds of assets or sell them yourself, it might make sense to work with these creditors.

Other Debts

If the deceased person doesn't have assets that must be transferred through probate, other creditors, like credit card companies and medical providers, are out of luck. These creditors can't force you or other relatives to pay the debt and can't collect it through other means.

Can a Debt Collector Contact Me to Get Information About a Deceased Person's Representative?

The federal Fair Debt Collection Practices Act (FDCPA) protects debtors from abusive, unfair, and deceptive debt collection practices. This law regulates who debt collectors can contact and how often.

Generally, a debt collector can't contact third parties, such as your employer, about your debt, subject to a few exceptions. For example, the collector can communicate with your lawyer if you have one. Collectors can also contact your spouse, parents (only if you're a minor), guardian, executor, administrator, personal representative, and your codebtors. (15 U.S.C. § 1692c (2024).) They can also talk to a confirmed successor in interest, which is someone who inherits mortgaged real estate. (To learn more about debts and deceased relatives and the FDCPA, visit the Federal Trade Commission's website.)

Collectors can contact third parties, like family members or other people connected to a deceased person, to get contact information for the deceased person's representative, such as the executor or personal representative. (15 U.S.C. § 1692b, § 1692c(b) (2024).)

Debt Collectors Might Still Contact You

However, just because you're not responsible for paying a debt doesn't mean creditors or debt collectors won't try to coerce you into doing so. If a creditor or collector is demanding payment from you for a debt owed by someone who's passed away, offer to provide the creditor or collector with a copy of the death certificate.

If the harassment continues, know that you can safely ignore it. You also have the right to report abusive debt collectors to the Consumer Financial Protection Bureau or your state's consumer protection agency.

If you think a debt collector has violated the law when trying to collect a debt, need help dealing with an aggressive debt collector, or want assistance negotiating a settlement, consider consulting with a debt relief lawyer.