McCoy Fatula, APCMcCoy
Located in Roseville, CA

What happens to your debt after you die?

When someone passes away, their loved ones and family members will be grieving. It's a tough time for those close to the deceased, and no one truly wants to deal with the serious matters that need to be addressed in the immediate aftermath of a death. Estate questions, beneficiaries receiving their pieces of that estate, and debt problems can riddle the atmosphere after a death.

Today, let's focus on the debt that a deceased person can leave behind. In many cases, creditors will come calling to the family members of the person who has passed on, asking for them to pay the debts they are owed. However, you shouldn't be bullied into this unless you had a stake in that debt. If you don't have a stake, then the debt dies with the person.

Two of the big forms of debt that people usually die with are credit card debt and a mortgage. In both cases, the debt dies with the person -- unless someone else is also attached to that debt. But again, that doesn't necessarily stop creditors from reaching out to, and potentially harassing, family members for money.

This is one of the biggest reasons why people need to have an estate plan. You can dictate in your estate plan how your debts will be addressed when you die. In addition, this is why it is so important to have responsible, trusted people to manage your estate and/or trusts.

Source: FindLaw, "Debts After Death," Accessed March 17, 2016

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