The loss of a loved one is difficult to cope with, but if the loved one left debts behind, it can be even tougher. It is important to know who is responsible – and who is not responsible – for the debts of a deceased person. This is even more true now than in the past, because creditors and debt collectors have become very aggressive lately about contacting a deceased person’s family members and trying to get them to pay debts. These debt collectors have been known to lie about a family member’s obligation to pay a debt. They sometimes have been trained to sound full of sympathy and compassion, but really they just want someone — anyone — to pay them money, whether or not the person actually legally owes it. In part one of this series, we discussed the basics in understanding how a person could be responsible for a relative’s debt.
Here are some specific examples:
What if the deceased person had a mortgage? Unlike many debts, a home mortgage is a “secured debt,” meaning the lender has a right to foreclose on the real estate if the loan isn’t paid off.
What about medical bills and other debts? Unless someone else signed an agreement promising to pay these debts, only the estate is responsible for paying them. If the estate does not have enough assets to pay them, then the creditor is out of luck. Relatives of the deceased person have no legal obligation to repay the debt… even though creditors will sometimes try to make them think otherwise. The exception is the surviving spouse of a decedent. First of all, California is a community property state. Additionally, under the Health and Welfare Code, a spouse is responsible for the “necessities of life” of a spouse, which includes the cost of medical care.
If you are being contacted by creditors about a deceased relative’s debts, an attorney can help sort out what you actually owe, and can take steps to force debt collectors to stop contacting you.
Ms. MacDonald’s practice is limited to estate planning, probate, conservatorships, elder law and trust administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite B-124 in Valencia, California. She can be reached at 661-294-6464.