General Question

ftp901's avatar

If a person has huge debt, no children, no house, and almost no assets, who pays their debt when they die?

Asked by ftp901 (1315points) September 1st, 2010

Would other family members (parent, siblings) have to pay the debt (student loans, credit cards, etc)?

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14 Answers

yoshiboshi's avatar

well, what I do know is that no one acquires the debt unless they cosigned the loan or something. I also hear that who ever acquires the estate acquires the debt. Not too sure what happens after that.

lillycoyote's avatar

I think the only person who might possibly have some responsibility or liability for any debt in this sort of situation would be a spouse or former spouse. Say the person died owing money to the IRS that a spouse or former spouse might also be legally accountable for, that person might be responsible for some of that debt, but otherwise, I’m pretty sure if you die owing money and the assets in your estate are not sufficient to cover that debt, your creditors are pretty much out of luck. No one else can be held responsible for the debt. But I’m not a lawyer, and this is the kind of things lawyers can answer better than anyone else.

And yes, if you acquire an estate you aquire the debt, but if the estate doesn’t have enough assets to cover the deceased person’s debt then that’s pretty much that. No one else is responsible for the debt, as far as I know.

BarnacleBill's avatar

I believe the debt is charged off if there are no assets. If the person stands to inherit money before their death, and then dies, their share of the estate would go to settle the debt before it would go back to the other heirs. If you die intestate, anything you own at all of any value goes to the debt first.

Dutchess_III's avatar

@yoshiboshi….Not everyone has to have a cosigner for a loan. Only those with no credit, like kids, or those with bad credit and have someone stupid enough to take a chance with them.

I agree with whomever said “Who gets the estate will be responsible.” But if no one claims the estate then the state takes it all….the state then assumes the responsibility, I would assume.

wundayatta's avatar

The estate is responsible for the entirety of the debt so long as no one else is a cosigner for those debts. If there are no assets in the estate, the debts can not be paid off. Anyone named in the will to receive assets would receive nothing. The debts have to be paid before there are any distributions.

They can’t go after other people, even those named as inheritors. It is the estate’s responsibility alone.

GeorgeGee's avatar

mua ha ha, nobody!
If you’re all alone, be sure to run up a big tab before you kick the bucket.

SeventhSense's avatar

The estate. Just another reason to make sure my Mom doesn’t rack up too much credit card debt. :)

YARNLADY's avatar

If there are any assets, they become the property of the estate, and all the debts must be paid before anyone can inherit anything. If there is not enough to pay the debts, no one pays, and the heirs get nothing.

Many times the debtors will contact the heirs with a statement of money owed, hoping to trick them into paying, but they do not have to pay any loan they did not sign on.

Minute_And_A_Huff's avatar

Huh. I’m beginning to feel like those late night commercials telling me to get insurance for when I die so that my children won’t be burdened with my overwhelming debt were lying to me.

talljasperman's avatar

then they can keep your personal stuff…? like photo’s and such…? even intellectual property?

RomanExpert's avatar

Umm…they write it off! Lol!

Ben_Dover's avatar

If a person has huge debt, no children, no house, and almost no assets, who pays their debt when they die?

Nobody pays it. the creditors are Sh** out of luck. If the family members are stupid enough to cover the debts, they may, but there is no obligation to do so.

When you say almost no assets, what do you mean by almost? Those assets remaining upon death of the intestate (I assume there is no will, too) will be divvied up among the creditors by a probate court.

YARNLADY's avatar

@talljasperman If the heirs can show that the personal items have no monetary value, they are not assets, or they can also petition to buy assets from the estate.

Justice13's avatar

@GeorgeGee I couldn’t have said it better myself! Wanna go rack up over a million dollars in credit card debt, before heading to Iraq? XD

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