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.
Although probate can put some
undo stress on an already stressful family situation, probate can be utterly
necessary and even useful when there are debts in the estate picture.
So, how do you handle debts
after death? It is a practical question, after all. Few of us leave this life
without something lingering in our accounts payable. Unfortunately, too many
families do not know which debts live on after their loved ones are gone.
Fortunately, MoneyTalkNews took up this matter in a
recent article titled “Debt After Death: 10 Things You Need to Know.”
The central bit of wisdom to
take away from the article is the difference between the one who took on
certain debts (the decedent) and their heirs. Problems arise, however, when
they have muddied that boundary. Generally, when the debtor passes away, their
debts do not transfer to their heirs or family members. The debts fall to the
estate and the probate process.
As a court proceeding,
officially, probate varies in some respects. Nevertheless, probate is the
proper forum to deal with debts after death. This is the period when creditors
can make their claims. Everything should be done to ensure that creditors get
funneled into the probate process without disturbing the family.
More specifically, creditors
should be pointed to the executor. In addition, all avenues of credit and
credit reporting should be informed and closed off. Of course, there are
certain types of assets when heirs really are on the hook, especially when it
comes to assets for which the heirs have co-signed.
Take a look at the 10 tips in
the original article and be sure to follow them, because creditors are not
always honest. Some creditors are not ashamed to pester a grieving family.
Please
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Reference: MoneyTalkNews
(October 7, 2013) “Debt After Death: 10 Things You Need to Know”