Managing Debt

Debt After Death: 10 Things You Need to Know

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Coping with the death of a loved one is difficult enough without the added pressure of creditors calling you to collect on the deceased person’s credit card debt. But can a bank collect a credit card debt owed by your deceased parent or spouse?

The answer depends on a range of factors, from whether it was a joint account to where the deceased person lived.

Here are some questions — and answers — about what happens to bills after someone dies.

1. Are Family, Friends or Heirs Responsible For Debts?

When you take out a credit card in your name, you’re agreeing to repay whatever you borrow. Whether you’re alive or dead, that obligation doesn’t extend to your family, friends or, in most cases, even your spouse.

In short, while your heirs can inherit your worldly possessions, they don’t inherit your credit card balances and they don’t have to pay them. Exception? If someone else was jointly liable on the debt with you. Joint account holders are generally fully responsible for the entire debt, even if all the charges were made by only one of them.

The fact that your heirs aren’t responsible for your debts, however, doesn’t mean your creditors won’t try to collect from them.

2. Direct Creditors To the Executor

While heirs or family typically aren’t responsible for your debts when you die, that doesn’t mean they just go away. Instead, the obligation transfers from you to your estate.

When a person dies, their estate is born. That estate will have someone, known as the executor or administrator, who will be designated by the will and affirmed by a court to handle all financial issues of the deceased, including their debts.

If you’re not in charge of an estate and get a debt collection request, direct the caller to the executor, then tell the caller you don’t want to be contacted about that debt again.

3. Notify Creditors and Credit Bureaus

The executor of the estate should notify creditors as soon as possible of the death. They should also notify the big three credit reporting agencies – Experian, Equifax and TransUnion – and request the account be flagged with the statement “Deceased: Do not issue credit.” This will help prevent an all-too-common problem: identity theft of the dead.

The executor should also request a copy of the deceased’s credit report. This is the best way to find out exactly what debts were outstanding.

Here’s the process, in the words of TransUnion:

Step One: Contact all creditors that the deceased person(s) did business with and request that they mark their files accordingly. Be sure to forward a copy of the death certificate, once you receive it.

Step Two: Check with the Social Security Administration to ensure that they have updated their files and notified the credit reporting companies.

Step Three: Forward a copy of the death certificate to all three credit reporting companies. Mail your information to:

TransUnion LLC
P.O. Box 2000
Chester, PA 19022

Experian
P.O. Box 2002
Allen, TX 75013
888-397-3742

Equifax
P.O. Box 740260
Atlanta, GA 30374
800-685-1111

Remember to send certified letters when corresponding with credit bureaus or individual companies and keep copies.

4. Find Out Who’s Responsible

As mentioned above, people who request credit together are equally responsible for the entire debt. The same is true with a co-signer, who essentially guarantees the debt of the borrower. If the borrower dies, the co-signer becomes liable.

Authorized signers or additional cardholders on credit card accounts, however, aren’t liable. They didn’t originally apply for the credit; they were just allowed to “piggyback” on the account of the person who did. If that person dies, the authorized signers aren’t generally on the hook.

5. Stop Using Credit Accounts

If you are an authorized user on a credit card account, don’t continue to use the card after the main cardholder dies. Because you’re not liable for the debt, this could be considered fraud.

A surviving spouse can ask for a card to be issued in his or her own name. It will most likely be a new card application, based on the survivor’s credit history, income, etc. (You can check your credit scores for free on Credit.com to see where you stand.)

6. Don’t Split Up All the Belongings Yet

It’s natural to think that you should immediately start giving Grandma’s antiques and jewelry away. But Credit.com expert Gerri Detweiler says it’s a good idea to wait.

Only after the estate has settled its debts should the assets be distributed. Distribute stuff beforehand, and should the estate not have enough to pay its debts, the heirs could become responsible for the debt.

7. Ask Creditors For Help

If a surviving spouse is a joint account holder on the deceased’s credit card and is having trouble paying the bills, that person may be able to work something out with creditors.

Ask for options to give you time to get organized.

8. Community Property States Are Different

If you live in a community property state, forget what you read in No. 1 above. Your rules are different.

In a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and, if you choose it, Alaska) one spouse can be liable for the debts of another, even if they didn’t agree to them or even know about them. So in a community property state you may be on the hook for the credit card debt of a deceased spouse.

9. If An Estate Can’t Pay, the Lenders Lose

Sometimes the estate has more debts than assets to pay them. If no one else can be found responsible for the debt, creditors will be forced to write it off.

10. When in Doubt, Contact an Attorney

This stuff can get complicated, especially when community property law is in place. Contact a consumer law attorney or probate attorney to get help.

Stacy Johnson contributed to this report. This post originally appeared on Money Talks News.

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Image: Keith Levit Photography

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  • Pingback: What Happens to Your Mortgage After Death? | Best Credit Repair()

  • http://www.Credit.com/ Gerri Detweiler

    You may also want to help him set up an appointment with a consumer law attorney. If they are violating the federal Fair Debt Collection Practices Act, he may not have to pay for the attorney’s fees – the collector would have to pay them. At any rate, the first consultation will likely be free or at low cost. Another alternative would be to help him file a complaint with the Consumer Financial Protection Bureau.

  • Miss Mason

    hello my aunt passed away and has a home that is bank financed can i take over the payments or does the bank sell the house will i have to go through a credit check or put up a down payment. she has no will and no biological children but she did raise me after my mother passed when i was 11 in 1989. i know she was my legal guardian but i dont know if she took the steps to legally adopt me.

    • http://www.Credit.com/ Gerri Detweiler

      It’s impossible for me to say whether you will be able to keep her house. Who is managing her affairs/estate? If it is falling to you, I would really encourage you to talk with an estate planning attorney to discuss your options for keeping her home. Unless you are a spouse or co-owner of the home it’s not as simple as continuing to make the payments.

  • http://www.Credit.com/ Gerri Detweiler

    Ugh! Have you tried to find out who regulates this utility company? It may be your state public utility commission. I suggest you contact them to see if they can help. If they won’t, let us know.

  • http://www.Credit.com/ Gerri Detweiler

    While I’d like to be able to tell you exactly what to do, probate procedures vary significantly by state. And while you may not be able to keep the small amount of money left, if there is a creditor in line ahead of you for that money. However, there also may be legitimate expenses that must be paid before the creditor gets paid. There is some helpful information on small estates in New York here: http://www.nycprobate.com/page28.html

  • George

    My hello, my mother opened up a home equity line of credit. I was added as an authorized user on a joint checking account. I was appointed power of attorney and made transfers from HELOC to checking account for my mother. If she passes away, do I still have access to the HELOC in transferring funds to pay off bills such as funeral expenses after her passing? The heloc is only under my mothers name.only.

    • http://www.Credit.com/ Gerri Detweiler

      Do not use the funds in the HELOC after her death without consulting an attorney.

      It sounds like you are concerned about her funeral expenses. Can she prepay those now before her death? That seems like a safer and more legitimate way to go.

  • Betty

    Is there any way that I can have my name off of a mortgage with my ex-husband without refinancing? Also, do banks sometimes accept an amount below the balance if paid with a lump sum?
    Thank you

    • http://www.Credit.com/ Gerri Detweiler

      It is very doubtful you can get your name removed without your husband refinancing. Lump sum mortgage settlements are very rare because these debts have usually been packaged and sold to investors. If you need to disassociate yourself from this loan I recommend you talk with a consumer bankruptcy attorney. That may be your only option, but if there are others the attorney can discuss them with you.

      • Betty

        Thank you for replying….Another question if I may…if my ex leaves the condo to me in his will and I decide not to pay the mortgage and it goes into foreclosure, will that affect my credit score?

  • CARMEN

    HELLO, MOTHER DIED I’M THE EXECUTIVE OF THE ESTATE FINISHED PROBATE AND DEED IS IN MY NAME MOM HAD HAD A LINE OF CREDIT ON THE HOUSE BUT BANK WILL NOT PUT IT IN MY NAME SAID CREDIT IS NOT GOOD ENOUGH 700 CREDIT SCORE. LIVE IN WASHINGTON DC.

    • http://www.Credit.com/ Gerri Detweiler

      Have you tried another lender? It’s hard to know exactly what the problem is but there may be another lender willing to finance it for you.

  • Shey

    Hi,.
    My Mom died owing state taxes. I have received the last SS check as beneficiary. I assume I can keep that money in lieu of putting into her estate? Her other assets like $ from car sale went into the estate.
    Thanks

  • http://blog.credit.com/ Kali Geldis

    Hi Dolly —

    We actually just wrote about this issue last week:

    http://blog.credit.com/2015/03/the-pre-recession-housing-problem-thats-about-to-slam-homeowners-110575/

    Even though your name isn’t on the account, you should be able to get access since you own the title to the home with the loan and the loan’s account holder has passed away. Reach out to the lender and figure out next steps for the loan. You may be able to address the payments issue with some of the options explained in the story I linked to.

  • http://www.credit.com/ Credit.com Credit Experts

    Karla —
    Our condolences on the loss of your father.

    This post may help you to locate the current owners of your late father’s debts. How to Figure Out Who Your Debt Collector Is

    • Karla Stover

      If we are unable to locate the collector what do we do with the funds?

      • http://www.credit.com/ Credit.com Credit Experts

        Karla —
        We’re not lawyers, nor are we familiar with estate laws in every state. Checking with a lawyer who is familiar with your state estate and consumer laws seems like a wise course. We cannot recommend that you take money that you believe to be owed to someone else.

  • http://www.Credit.com/ Gerri Detweiler

    I am sorry Hanah – we don’t have the expertise to answer these questions. We suggest you consult a tax professional in your area. This is a significant amount of money and you’ll want to make sure it is handled properly.

  • Sristy

    Hello,
    I lost my father 9 June 2014,before he died he had an fire incident in bank warehouse, on 31 may 2014,he wasn’t able to tolerate this,he had too many bank loan,n there is few stocks of good left yet,so we are sealing those goods and paying bank debts,but now the bank is forcing us to take laibality , insurance on fire money is not adjusted by the bank yet,if we take laibality than we need to pay a huge amount monthly,which is not possible for us,n if not than my dad have given morgage to back,which is so many,and we are planning to stop the account by sealing our others property,like we won’t bear any installment just we ll give all amount together,but we ll need time to sale but the bank is not understanding, and now he is not giving us the good to sale.

    • http://www.Credit.com/ Gerri Detweiler

      We are sorry for your loss. Unfortunately we don’t understand your question. Have you spoken with an attorney? It sounds like that should be the next step.

  • http://www.Credit.com/ Gerri Detweiler

    Amber – we are working on your question.

  • Sadie

    I have a friend who has no family. She has named me as the beneficiary on life insurance, 401k, etc. I’ve been added to her checking and savings accounts. She purchased a 2012 SUV and says death benefits are included in her payment so that when she dies it will be paid off and become mine. I’m trying to help her as much as possible but want to know 1) will there be taxes due on everything I’m listed on as beneficiary? 2) 401k – can that be rolled into my current one? 3) what about the car? 4) what about her apartment, utilities, etc. and 5) who will do her taxes etc.?

    • http://www.Credit.com/ Gerri Detweiler

      Does she have a will and has she named you as executor? The will determines who goes property without a named beneficiary. If you are her beneficiary in her will then whether there will be taxes depends on the size of the estate but unless he has a large estate it’s probably not an issue.

      The executor will need to file a final tax return for the estate.

      Generally the life insurance and 401(k) can pass to named beneficiaries directly without going through probate.

      Her apartment lease and utilities will likely be terminated on her death. The executor will likely need to provide a death certificate. If there are balances owed, the landlord and/or utility companies may try to collect from the estate if there is one.

      With the IRA generally the named beneficiary can roll it over into an inherited IRA without paying taxes, but once the beneficiary starts withdrawing those funds they will be taxable. A Roth IRA is different. though, since those funds were put in pre-tax.

      These are very general guidelines so please don’t take them as tax or financial planning advice. It sounds like your friend hopes to leave you as much as she can, so it also doesn’t sound like she would object to you asking her these questions so that her affairs are taken care of as she wishes after her death. You may want to make an appointment with an estate planning attorney or financial planner to make sure everything is in order and that you understand your responsibilities and the financial implications.

  • http://www.Credit.com/ Gerri Detweiler

    It sounds like you hired an attorney to help so you may want to ask them whether it is worth pursuing. It may depend on whether the bank would be liable for damages as a result of their actions. If not, you could at least consider filing a complaint against the bank with the Consumer Financial Protection Agency and/or the bank’s regulator.

    Our condolences for your loss.

  • http://www.Credit.com/ Gerri Detweiler

    It would not hurt to get a couple of real estate agents to give you an assessment of the value of the property. You shouldn’t have to pay for that, and it may help you understand what you’re looking at. As far as the rest of your situation, since you are going to be disposing or her property one way or the other, it would be a good idea to consult with an estate planning attorney to find out what you need to do. Probate procedures vary by state and you want to make sure you follow the proper procedures.

    Our condolences for your loss.

  • Melissa

    My father-in law’s wife passed and left no will. They live in Texas. He was wondering if, instead of continuing to pay for the house they both occupied, can he allow the bank to foreclose on the house? Will he incur any tax issues? The idea is the bank can’t go after the deceased. The house was in her name, and he wants to deny the bank giving it over to him as he no longer wants to live in the house.

    • http://www.Credit.com/ Gerri Detweiler

      Texas is a community property state so I would be concerned about whether there are potential repercussions for him. Can you get him to talk with an estate planning attorney to make sure he doesn’t create additional problems for himself?

  • http://www.Credit.com/ Gerri Detweiler

    If the truck is registered to the company that may change things. Talk with the lender about what is needed to get it switched over, and condolences for your family’s loss.

  • http://www.Credit.com/ Gerri Detweiler

    If he’s broke then my recommendation is he talk with a consumer bankruptcy attorney. The attorney will explain to him what he needs to do to walk away from his home without financial repercussions.

  • http://www.Credit.com/ Gerri Detweiler

    If she named beneficiaries for her life insurance policy (and didn’t leave them to her estate) then the beneficiaries can use the for whatever they want. If there is an estate, the creditors may try to collect from it, but if there isn’t anything of value they may not get paid.

    Our condolences for your family’s loss.

    • joho9119

      Thank you Gerri. It is good to know that my parents won’t have to go into debt to pay for her funeral. I appreciate the great article and advice!

      • http://www.Credit.com/ Gerri Detweiler

        Glad it is helpful.

  • http://www.Credit.com/ Gerri Detweiler

    Our sincere condolences and so sorry to hear what a difficult time you are having with the bank.

    The Credit CARD Act put a stop to issuers adding fees and interest after death if the administrator pays off the debt within 30 days but I honestly don’t know how that works with HELOC’s in Florida. However, given that the house is in foreclosure it would be wise for you to consult with an attorney to find out what the best course of action is for dealing with this house. If you try to do it yourself my concern is it could wind up taking you twice as long and that some glitch in the process ends up costing you more time and money.

  • Linda

    Hi I have a question my sister just passed away and lives in PA, Her credit card has 6,000 in outstanding credit debt.(Her name only) She has a life insurance policy. They are paying on there home. Her husband is the beneficery for her life insurance. Can the creditiors collect from her life insurance to pay off her credit card? thank you

    • http://www.Credit.com/ Gerri Detweiler

      If her husband was the beneficiary on her life insurance policy it’s my understanding he can do what he wants with that money. If she named her estate as a beneficiary then the benefits would go to the estate and could be available to creditors.

      I should point out, though, that if the credit card was a joint account with her husband then they are entitled to try to continue to try to collect from him. And our condolences to your family.

  • http://www.Credit.com/ Gerri Detweiler

    Manny – Your mom may be able to get answers through the Texas Consumer Complaint Center. If not, they may be able to refer her to Legal Aid. So sorry for you loss.

  • LaurieSue

    My aunt passed away recently. Never married, no children. I am her niece, and was added to her bank account to handle the money as she was dying. She left about 1200.00 and had nothing else of value. No home, no car, etc. No debt, just some possible bills from Medicare that are coming in. I still have to pay some of the people that helped her while dying; caretakers, etc. If there isn’t enough money to pay everyone, or the medical bills, am I liable for them?

    • http://www.Credit.com/ Gerri Detweiler

      Not unless you were a cosigner. You are not personally responsible for her debts just because she added you to her bank account. Our condolences for your loss.

  • Susan

    My grandfather left a home to me and my 2 younger siblings. I currently live there with my two kids, and have for the past two years. They want the house sold, because they want to make a profit off of it, but I don’t want to sell it; I grew up in that house, and so have my kids. Can they force me out of the home? Also, my grandfather has some credit card debt and a car loan (car was taken by the bank) that still have not been paid; when the house is sold, will the creditors get what they can to pay those debts off? Also, do these loans continue to gain interest even after someone is deceased?

    • http://www.Credit.com/ Gerri Detweiler

      If you all equally inherited the home, then your siblings are entitled to their share of the home and they may be able to take legal action to force a sale. Is it possible for you to get a mortgage loan and buy them out? Or work out a payment plan with them where you pay them their share of the proceeds as if it were a loan?

      As far as creditors go, if the home equity is part of the estate then they may be entitled to go after that home equity to collect their share. Yes, interest and fees may continue to accumulate (how much depends on state law). Though at this stage it’s hard to say whether they will still pursue it; they may have written it off.

      It would be wise for you to meet with an attorney to go over your options and find out if there is a way to keep the home, resolve any remaining debts, and to allow your siblings to get the share of the estate to which they are entitled.

      • Susan

        I do not qualify to get a loan because my credit score is not high enough, due to medical bills that went to collections. He passed away 6 years ago, so I don’t know if the debts are written off at this point or not. My uncle is the executor, and hasn’t received anything either about those debts since he passed away. I don’t think they would be on board for me to work out a payment plan with them; I grew up in this home, and have paid for everything to maintain the home, including taxes, without even asking them. I need a couple more years to have my credit score good to where I can move out of the house–I don’t think that is too much to ask, and they are wanting to sell the home. I don’t know what to do.

        • http://www.Credit.com/ Gerri Detweiler

          Susan – I am not sure what to tell you. If they are pressing for a sale then you may need to stall it to buy the time you need. If they aren’t, then maybe you can hang on long enough to get to where you need to be. Short of suggesting you talk with an attorney I am not sure what kind of advice I can give that will be helpful.

  • http://www.Credit.com/ Gerri Detweiler

    I have no idea if you will be able to access the funds right away. I would imagine it depends on the probate process in your state.

  • http://www.Credit.com/ Gerri Detweiler

    Not that we know of. New York is an equitable distribution state not a community property state, so we doubt you will be directly liable. If there is an estate they may try to collect from it. We’re not consumer law attorneys, however, so we’ll have to suggest you talk with an attorney for legal advice.

  • AddisonDewitt

    My sister died 4/2014. I am her only heir. She left no will but had no assets at all, living on disability while she died of cancer. I received her 401K and life insurance. She left about 15K in credit card debt. Only one creditors filed a “statement of claim” for about $2K. A week after she died her tax refund checks were sent to her. $550 from the Feds and $250 from State of Cal. I have done nothing with these checks, I have them sitting in an envelope. If I make claim for her tax refunds will I be bound to pay her debtor (who made the “statement of claim”) with the tax refund money or is it legally mine, as her only heir. If I did make a claim for the money how will the credit card company know ? And will they come after me to pay it back to them ? If that is the case I do not want to involve myself and I will just tear up the tax refund checks as I do not want the liability and the hassle is not worth the money. Nor is it worth $300 an hour an attorney would charge me to answer this question.

    • http://www.Credit.com/ Gerri Detweiler

      It’s hard to say whether they are going to try to come after those debts or not. But cashing those checks (if you can at this late date) and not paying the debts is risky. Have you reviewed the California probate procedures? There is some helpful information on the California courts website: http://www.courts.ca.gov/8865.htm

      • AddisonDewitt

        thank you for the reply…I have not cashed the checks, I was planning on returning them to the IRS with a 1310 form to collect the money as her only survivor..But I think I will just leave it alone and not do anything, I imagine they could take any claims against her ” estate” which there is none other then these tax refund monies by her social security # just like they do with other people who owe debtors, like non payment of child support etc. The little bit of money I would be getting from the refund is not worth some future hassle.

        • http://www.Credit.com/ Gerri Detweiler

          Hopefully you don’t hear from them again.

  • Nita

    Hi, my mother passed away. She has contract to purchase land and left a balance of $6000. I am administrator of her estate. I have two brothers in prison and one incompetent sister. I want to assume the contract and finish paying for the land. Is that possible? If so, what’s the process?

    • http://www.Credit.com/ Gerri Detweiler

      Our condolences Nita. Have you talked with the seller?

  • Anna

    Hi: My father died 10 years ago, and there was no estate because he and my mother owned everything jointly. BUT, the credit cards were in his name with my mother as an authorized user only. She didn’t get a bill in January, and when my sister called, they wanted to speak to my dad, and she told them he was dead. They then told my mother how much to pay for January and February. She then received a bill for March, but then did not get one for April. I called the company to set up online payments, and she said they didn’t have a social security number on file for my dad or my mom, so they would need to have my dad and my mom both on the line to set-up online bill pay. I then told the woman that she hadn’t received a bill for February or April, and she said that was correct, that the account was closed. I asked her when, and she told me February 28, but she couldn’t tell me why, or by who. She did say it was being handled by someone else (I couldn’t understand the woman’s accent – whether it was the collections dept or who).

    What is my mother’s obligation for this bill, if any. I realize that she has been the sole user of the account for the past 10 years, but they don’t have her social security number or anything. She never intended not to pay the cards, but I don’t know how she can pay for the card when they don’t send her statements

    • http://www.Credit.com/ Gerri Detweiler

      File a complaint with the Consumer Financial Protection Bureau and have her get her credit reports to see how this is reporting. It’s murky because she was an authorized user and not a joint accountholder but still there are requirements under the Equal Credit Opportunity Act.

      How Do I Get My Free Annual Credit Report?

  • susie

    Hello
    My step mother in law passed away. There is a substantial amount of credit card debt that my father in law was not aware of until now. Some in her name only, some in both names. Their house is paid off and in both of their names. I understand that my father in law is responsible for the debt in both of their names. My question is about the debt that is in her name only. Does the house that my father in law resides in count as an asset in her estate and does it need to be liquidated in order to pay off her debt?
    Thank you

    • http://www.Credit.com/ Gerri Detweiler

      Does he live in a community property state? If so, then he may be responsible for her debts incurred after they married. I’d recommend he meet with a consumer bankruptcy attorney. He needs to find out what his responsibilities are for these debts and what the creditors may do to collect. So sorry for your loss.

  • Dena roach

    My son was killed in motorcycle wreck on March 21 2015. He had no money, no assets just personal stuff like clothes so tools, etc. How do I settle his estate? Send death certificate with a appolige letter.

    • http://www.Credit.com/ Gerri Detweiler

      We are so sorry. You have our deepest condolences. Most states have a simple process for small estates. I don’t know what state you are in but if you search online you should be able to find it. If not, please let us know.

  • patty

    I am a nervous wreck…My father was in the hospital and could not go back to his assisted living, and the court took away the guardianship my sister had on my father and then they asked me to be temporary guardian….then my father passed. Now the attorney representing filed a bill and says that I have to pay. I am on disability and did not know that I would be responsible to pay for anything and if I had known I would have giving this guardianship to my brother because he would be able to do it better, now I am so nervous. Will this be billed to the estate of my father??

    • http://www.Credit.com/ Gerri Detweiler

      I am not sure that’s accurate that you owe the bill just because you have temporary guardianship. Talk with a consumer law attorney. You may be eligible for free help from Legal Aid since you are disabled. (And yes they may be able to try to collect it from the estate but it doesn’t sound like you should be personally liable.)

  • houstonmom

    My son passed away in 2014, leaving no will. I purchased his house for him and put the house in his name. The house is free & clear and there was never a mortgage.
    He left credit card debts of approximately $10,000.00 and medical bills approximately $25K. I hired an attorney, we went to probate court and the judge approved my being the administrator of his estate and his only heir. The attorney published a notice in the local business journal and only one creditor has responded. We live in Texas.
    My questions are..1..how long does a creditor have to make a claim on the estate? 2. I can prove with checks, at closing, that I paid for the house. Can I have an attorney deed the house to me, as his only heir? 3. Can creditors force me to sell the house to pay debts or do creditors just file judgments? I’m not clear on the process.
    Many thanks.

    • http://www.Credit.com/ Gerri Detweiler

      I am so sorry to hear of your son’s death. As much as I would like to be of help these are really questions for your attorney. We’re not attorneys and the process varies in different parts of the country.

  • Kelza13

    Hello, wondering if anyone could give me some advice. My mother recently and unexpectedly passed away. I am the executor of the estate. She did not have any money or assets, only a home with a mortgage. She had some hospital bills and credit card bills. We aren’t sure yet what we are going to do with the house. I know if we sell it, the money made from the sale of the house will have to be used to pay these creditors. But what if we don’t sell the house? There is no cash in the estate. Will I then be required to pay these creditors, since I am keeping the only asset she had? Or can they force me to sell the home? Thanks.

    • http://www.Credit.com/ Gerri Detweiler

      We’re sorry to hear of your loss. Just because the house isn’t a cash asset doesn’t mean the creditor is out of luck. If you want to hold onto the home you may have to borrow against it to pay creditors. But there are so many factors involved it would really make sense for you to consult an attorney to at least find out what your options are.

  • Deboah

    I was awarded house in divorce. I live in Texas. His new wife was asking about the house. My Aunt was renting home she new my aunt was interested on buying it, new wife told her she needed to get a loan and pay it off. My aunt told me she was telling her to do that. I told her she can not request you to do that it was awarded to me in divorce. shortly after that conversation he died. I never heard from executor or her. I checked with Mortgage Company not much help since he was only one on loan. I supplied them with divorce papers, showing them it was mine. I need to know who is responsible for loan and if executor was supposed to notify mortgage.

    • http://www.credit.com/ Credit.com Credit Experts

      Deborah —
      We are not lawyers, and we cannot give you legal advice. This sounds like a complex situation in which you need the services of a lawyer.

  • Crystal Wynecoop

    Hello,
    My Significant other and I have Rental Properties. Which were left by his mother when she passed in 04/13. Prior to her death she had her son added to the Legal ownership of these properties. So they are both owners. There forms of tenant/landlord practice were different. When she was alive she had utilities in her name and he has each tenant pay there own utilities. There are two separate property locations in LA. One Location was simple to transfer into individual accounts. The other location We had multiple tenants and visits by us personally to local office with state issued death certificate and current owner and they wouldn’t change the name on account. They finally shut-off water and we are in jeopardy of loosing tenants. During this time they have record of us trying to handle this situation. They state the son since he is owner on property has to pay. Today when calling they advise me its always been policy that when notified that account owner has deceased within 24 hours the utilities are shut off. Which was never done till its in the thousands of dollars owed. They immediately blame us. They say they had a new accounting software change and many glitches along with short staff which is why they never turned off till now. They wont let my new tenant turn on in his name till bill is paid off. When we visited local branch last they said the state would be held responsible for outstanding bill. this is urgent and in no way can we pay this astronomical bill. What do we do?

    • http://www.Credit.com/ Gerri Detweiler

      I am not sure if you are saying this is a water bill or another type of utility but you need to find out what the regulatory agency is for this utility. It’s impossible for me to say because it varies widely. If you can’t figure it out try to get one of your elected officials to help. For example, if it’s a county utility then you could contact a county commissioner or if it’s a statewide utility you could try getting your state representative to help. They usually have ombudsman staff that can help.

  • Tracy

    If i inherit an annuity from my mom and she has outstanding debt. do i have to pay her outstanding debt with it?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      Talk this over with an attorney with a practice that focuses on estate planning in your state.

      If you learn the debt is going to impact the estate, whether the annuity, or some other aspect, get together with all involved and talk about trying to negotiate lower lump sum payoffs where possible.

  • DiDi

    In my aunts will she has left her car to the man next door, but last year she sold the car to her sister-in-law, when she passes does the sister-in-law have to give the car to the man next door.

    • http://www.credit.com/ Credit.com Credit Experts

      Assets included in a will are those that are currently owned — you cannot will something to someone if you no longer own it.

  • Annie

    Hi, my grandfather had put his girlfriend as a co-owner on his mortgage, but she’s dead now, now my question is if my grandfather dies what happens to his house?, like the mortgage isn’t paid off or anything, but does my mother get the house when he dies? Because the lady that does has 3 kids, so will they take the house away?, my mother currently lives in it with my grandfather, or will the bank take it?

    • http://www.credit.com/ Credit.com Credit Experts

      It will depend on what his will says, or if he does not have one, how the state divides his estate.

  • slcinwa

    My sister died and I’m the administrator of her California estate. My question is can a bank who wrote off a debt years ago create a new account in her name and try to collect the previously written off debt from the estate? Thank you in advance!

    • http://www.Credit.com/ Gerri Detweiler

      My guess is no but I am not an attorney so can’t answer definitively. You may want to check with a consumer law attorney. We often talk with Robert Brennan and Jay Fleischman for stories we write on consumer legal topics and they both practice in California.

      • SLCinWA

        Thank you very much! I so appreciate this site and your help!

        • http://www.Credit.com/ Gerri Detweiler

          My pleasure. Let us know how this turns out, OK?

          • SLCinWA

            Absolutely! :)

  • http://www.Credit.com/ Gerri Detweiler

    CW – Our condolences for your loss. We can’t say for certain, but if you live in a community property state then it’s possible the creditor may look to community property for payment. If you don’t, and you didn’t sign anything agreeing to financial liability for these bills, they may be out of luck.

  • dmartin1910

    Can the utility companies charge an early termination fee for cancelling service when the customer died? The children called to cancel the GA Natural GAS service and were told, knowing the situation, there was an early termination fee. Oh, and sorry for your loss, by the way.

    • http://www.Credit.com/ Gerri Detweiler

      I imagine it would depend on the contract and state law. I’d suggest you start with the Georgia Public Service Commission. (Personally, it sounds like a terrible policy to me, and I extend my condolences for your loss.)

      • dmartin1910

        Well, Ga Natural Gas has done this on multiple occasions that I know of, and it was on WSB TV once in a story. They have no “official policy”. You have to raise hell until they back down, which usually involves calling the GPSC. They finally backed down since I talked to you. Thank You.

        • http://www.Credit.com/ Gerri Detweiler

          Thank you for the update and additional information.

  • Bina

    My father recently passed away. Although he was older, he walked into a care center with 24 hour nurse care on his own. He passed away 10 days later and they never had him sign anything while he was there. Now they are sending me the bill and I never signed anything saying I was responsible for his bills. He always paid his own bills … Do I have to pay this bill??? He had Health insurance and they just refuse to send the bill in..

    • http://www.Credit.com/ Gerri Detweiler

      I see no reason why you would be personally responsible for a bill he incurred himself. However, they may try to collect from the estate if there is one. So whomever is the administrator or personal representative of the estate may want to file the insurance claim. If they don’t and too much time elapses, it may be too late to bill insurance. If you are working with an attorney to settle his estate, you should definitely bring this to the attention of the attorney.

  • MJDizzle

    My mother passed away with no assets, she lived in a manufactured home that I own. I was told not to pay her electric bill as it should go through her estate (which won’t have enough money to pay it) and so I went to the electric company, requested the power be switched into my name until I sold the house. They told me that since I lived there (I haven’t in 3 years) that I was sharing that utility and would be responsible for the bill (nearly $300!). I can’t afford to pay it and I’m not an executor of the estate. Am I obligated to pay this bill? Thoughts?

    • http://www.Credit.com/ Gerri Detweiler

      You are probably not personally responsible but that doesn’t mean they must turn on the service in your name while you try to sell the property. You can talk with your state utility commission to find out if there are consumer protections that may apply here.

      We are very sorry for your loss.

  • http://www.Credit.com/ Gerri Detweiler

    Our condolences for your loss. I presented your question to author Mary Reed, who has coauthored a number of legal books including one on estate planning. Mary is not an attorney so this is not legal advice, but hopefully it will help you as you research how to handle your father’s debts:

    “The purpose of probate is to validate a will, appoint executor or estate administrator, pay debts of the deceased with assets in the estate of the deceased and to transfer remaining assets controlled by the will to the deceased’s beneficiaries.

    NV has simplified probate procedures for small estates and based on what the questioner states in his question, his father’s estate would qualify given that the father appears to have died with virtually nothing. No need for a probate attorney therefore.

    If there are no assets to pay the deceased’s creditors, then they are out of luck, assuming the deceased’s spouse is also deceased. If not, then the community property (of the surviving spouse) could be liable for the credit card debt since NV is a community property state.

    In regards to the funeral expenses: NV law says: The personal representative shall, as soon as sufficient money is available, upon receipt of a sworn statement of the amount due and without any formal action upon creditors’ claims, pay the funeral expenses, the expenses of the last illness, the allowance made to the family of the decedents, money owed to the Department of Health and Human Services as a result of payment of benefits for Medicaid and wage claims to the extent of $600 of each employee of the decedent for work done or personal services rendered within 3 months before the death of the employer, but may retain the necessary expenses of administration.

    So if I am reading the above correctly, funeral expenses get paid before creditor claims regardless of whether or not there will be any funds left over to pay those claims. Also, I believe that if if the questioner has paid the funeral expenses out of his own pocket, it may be possible for him file a claim with the probate court as an unsecured creditor and to get his claim paid by his father’s estate such as it is before any of the other creditors are paid. He would need to check with the probate court about this however.  

    For specifics about what the questioner needs to do, I recommend that he speak to a clerk at the probate court in the county where deceased resided. “

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