What Happens to Debt When We Die?

Debt and Death. What Happens to Debt When We Die?

I am writing this primarily to combat unscrupulous debt collectors who tell mourning family members that a dead person’s credit card debt survives death and needs to be paid by those family members. This is simply not true in most cases, the deceased’s estate may be responsible, but many collectors play fast and loose with the distinction.

Individually held debts, debts that are held by a person alone do not get “inherited” by the surviving members of the family. The creditor is limited to the deceased’s estate. In community property states, and Colorado is NOT a community property state, some of these types of debts can be “inherited” by a surviving spouse, because in those states debt is assumed to be jointly held, even if it is in one person’s name. Of course, secured debt, like a house or car loan remains valid against the deceased’s property, but here again, without more the surviving family member’s are not liable on the loan. You may want to talk to a lawyer if you are in this situation, trying to figure out who, if anyone, needs to be paid upon the death of a loved one.

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