Deceased person’s debt
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Can a diseased person’s debt be collected from family members?
It is collected from the estate
With one exception (co-signing), family members do NOT inherit debt. The diseased person’s debts become the responsibility of the estate. Assets must be liquidated to pay for the debts before anything can be passed to heirs. In case that there isn’t enough assets to pay off the debts, the creditors will have to write it off.
Life insurance is NOT part of the estate. It goes directly to the beneficiaries and does not have to be used to pay any debts of the estate.
If a family member has co-signed for the diseased person, he assumes full liability for that debt.
Creditors have one year to notify the estate of the debt. Often, collection companies try to make family members believe they are responsible for the debts. Don’t fall for that trick. Just send them a notice with a copy of the death certificate indicating there are no assets to pay the debt.
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