What happens to a person's debts after they pass away?

If you are toiling in debt or a loved one is dealing with similar circumstances, a pressing question may be: “what happens to my debt when I pass away?” One would think that the debt would be extinguished with the person as they pass away. Unfortunately, this is not always the case, as some creditors will go to great lengths to collect on debt they are owed.

In fact, it is fairly common for creditors to come calling for payment from those who have passed away; especially if the person has an insurance policy or assets that could be sold to pay off debt. But most importantly, creditors are allowed under state law to collect their debts from a valid estate.

Executors can be overwhelmed and frustrating by an avalanche of claims, even though the payment of debts is a common part of the probate process. It may be difficult to know whether a creditor is genuine or has a legitimate claim against the estate. After all, how are you to tell whether a bill is valid or if property taxes are properly owed? Remember, unscrupulous creditors don’t care about your grief or whether they can prove their claim is valid. An executor may need assistance in verifying claims from unpaid civil judgments and other payments owed under existing contracts.

If you think a creditor’s claim is not valid, an experienced estate administration attorney can help you understand the legal defenses available to you and whether a creditor is likely to succeed.

The preceding is for informational purposes only and is not legal advice. 

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Joseph A. Ledwidge, P.C.