How to Handle a Deceased Loved One's Debts

Debt is one of the more misunderstood parts of settling an estate, and clearing up a few misconceptions early can prevent unnecessary stress and unnecessary payments.

Who is actually responsible for the debt

In most cases, a deceased person's individual debts are paid from their estate, not by family members personally. Family members are generally not liable for a deceased relative's credit card debt or personal loans unless they were a co-signer or joint account holder, though the specific rules vary somewhat by state.

Where confusion often happens

Debt collectors sometimes contact grieving family members directly, and some rely on the fact that families don't know their rights. It's worth confirming with an estate attorney or reliable resource before paying any debt personally, since you may not actually owe it.

The order debts get paid in

Estates typically pay debts in a specific order set by state law, often prioritizing funeral costs, taxes, and secured debts before unsecured debts like credit cards. If the estate doesn't have enough assets to cover everything, some debts may simply go unpaid, and this is generally not the family's personal responsibility to cover.

What to do if you're unsure

If debt collectors are contacting you directly, request everything in writing and confirm the debt is legitimate before responding. An estate attorney can help clarify what the estate is actually obligated to pay, particularly in more complicated situations involving multiple creditors.