Does the Debt of a Deceased Person Have to Be Paid?

Dealing with the loss is a difficult trial, but the bills should not be one of them.

You are the parent, a sibling, a brother, cousin, sister, or are somehow related to or are a beneficiary to someone that has passed away. The loss is devastating. Aside from the emotional turmoil, the question remains if this individual had any debt, who is responsible for taking care of the debt.

Solvent Estate

When someone passes away, creditors and debtors get the first share at any money from assets that a deceased person may have. Then, the deceased person's will is honored appropriately for whomever they have named beneficiaries. In the case of a solvent estate, the money from the assets is enough to cover all debts, medical expenses, etc. that have been incurred.

Insolvent Estate

In the case of an insolvent estate, the amount of assets of the deceased person is not enough to pay off the debtors, creditors, medical expenses, etc. In this case, a system will be worked out where the creditors and others who are owned money must divide the money appropriately. In some cases, some people will get paid in full, others partially, and some will not receive any money. In most cases, the beneficiaries will have no legal obligation to pay off any remaining debt.

Cosigner

If you were a cosigner, then after all assets have been liquidated you will be responsible for paying off any portions of debt that you were a cosigner toward in the case of insolvent estate. So, if you cosigned for any medical bills, and after all the assets have been sold off, it is your responsibility to pay the remaining debt.

References

• BCS Alliance: Do I Have to Pay my Parents Debt?
• mystatewill: Are family members required to pay the deceased's unsecured debts?