| "He left me nothing but bills. Do I have to pay them?" | | | | is known as a "community property" state. These |
| Unfortunately, many people who have lost a loved | | | | states include Arizona, California, Idaho, Louisiana, |
| one soon find that the deceased had accrued | | | | Nevada, New Mexico, Texas, Washington and |
| substantial debt. Survivors are often then left with | | | | Wisconsin. If you live in these states and your |
| the challenges of dealing with this debt both ethically | | | | husband or wife dies, you will want to seek counsel |
| and legally. While the moral issue is something that | | | | from an estate attorney. |
| should be understood, the legal obligation is what | | | | Another issue comes in feeling a moral obligation to |
| concerns most people. The most common question | | | | pay a deceased relative's debts even though there is |
| asked is "Do I owe the debt of a deceased family | | | | no legal obligation to do so. Before you consider this |
| member?" The answer may surprise you. | | | | option you should take into consideration how the |
| If a deceased person originated a debt that he/she | | | | loss of the funds in question will affect you and your |
| alone accrued, then he/she was responsible, and you | | | | family's current and long term security. In addition, |
| are not. In this case you should rest easy because | | | | you need to recognize that companies that loan |
| you would have no legal obligation to pay the debt. | | | | money know that a certain number of their debtors |
| However the debt of a dead relative may affect you | | | | will die owing them money. They compensate for this |
| due to possible responsibility of their estate to cover | | | | reality in the fees and interest they charge their |
| those obligations, thereby leaving less inheritance to | | | | entire customer base. So, the pay off of debts |
| heirs. | | | | owed by a deceased person, by a relative, can be |
| There are really only two circumstances where you | | | | viewed as bonus profits for the company in question |
| may be legally responsible for a relative's debts. The | | | | and not as an unexpected loss. |
| first case is when you are a co-signer on obligations | | | | You will note that most companies protect |
| of the individual. This may happen when you and the | | | | themselves from the possibility of loss by getting |
| deceased were co-signers on a loan such as a credit | | | | multiple signers on debt instruments and placing liens |
| card account or a property mortgage. In those cases | | | | on collateral such as real property, automobiles, |
| you were jointly and severally (together and | | | | equipment, etc so that they can either take |
| individually) obligated. Just because one of the parties | | | | ownership of the assets or force their sale in order |
| obligated for a debt passes away, it does not relieve | | | | to satisfy the debt. If you choose to pay off a |
| the surviving party of their responsibility. | | | | relative's debt when you have no legal obligation to |
| The other possible obligation scenario is if you are the | | | | do so, that is your choice, but be sure to consider all |
| spouse of the deceased person and you live in what | | | | aspects of the action before you do so. |