Inheriting Debt

I was asked in the comments some time ago about inheriting debts from one's parents when they die. Sorry I didn't get to it sooner.

The short answer is: you're not responsible for your parent's (or parents') debts. The only way a collector or creditor can legitimately come after you for debts incurred by your parents is if you co-signed for the debt with them (in which case the debt is actually partly yours). If the debt is entirely the responsibility of someone who is deceased, no one else can be responsible for repaying it.

(Collectors have been known to to harrass survivors of deceased debtors demanding repayment. But that doesn't mean the suvivors have to pay them. Many collectors will lie to get payment, in violation of the FDCPA. This is one of those areas where you have to know your rights.)

Now, if you die with more debts than assets, the creditor is out of luck. But if you are leaving an estate to your children, the creditor is entitled to be repaid out of that estate before it is distributed to your heirs. In this case, it's technically not the heirs but the estate of the debtor that is repaying the debt, so it's still consistent with what I said above.

If it is your spouse who passes away with debts outstanding, things get more complicated. Can the creditor force a widow to say, sell the couple's home in order to collect their payment from the estate of the deceased? So far my research is suggesting this is something that may vary according to jurisdiction. It's probably in your interest to contact an attorney in this situation and figure out what your rights are.