Debts after a death

The general rule

Debts belong to the estate, not to the family. The executor pays valid claims out of estate assets in the order state law requires, and when the estate runs out, the remaining debt is generally not collectable from anyone else.

Paying a deceased person's debt with your own money is almost never required and can be hard to undo. If a collector implies otherwise, that is a claim to check rather than a fact.

The exceptions, and they are the whole list

• You co-signed or were a joint account holder. Then it was always your debt too.
• You are an authorized user rather than a joint holder — a different thing, and generally not liability.
• You are a surviving spouse in a community property state, where marital debt rules may reach you.
• State law imposes liability for a spouse's necessary expenses, which in some states includes medical care.
• You are the executor and you distributed assets before paying creditors, or paid them out of order.

Whether a creditor is still in time

Every state puts a clock on claims against an estate, and the bill in your hand may already be past it. That is the question to settle before paying anything, because a claim nobody presented in time is a claim the estate does not have to pay, and money paid on one is rarely money that comes back.

The word for the rule is nonclaim, and the reason it is worth knowing is that it works differently from an ordinary limitation period. An ordinary deadline runs against a creditor who has been sitting on a debt. A nonclaim period runs from the death, or from a notice, against every creditor at once, and it exists so that an estate can be closed and distributed without the family discovering a new claim two years later.^{Source 4Source 8}

What the clock is attached to is the part that varies

These are not the same rule with different numbers in it. Among the states Sahvelo has read at source, four clocks do four different jobs. Florida sets an outer bar measured from the date of death, after which a claim that arose before the death is not binding on the estate at all, whatever notice anyone was given. New Jersey measures nine months from the date of death too, but the section is narrower than it looks: it protects the personal representative for what they have already paid rather than extinguishing the debt. Arizona's two-year limit is on commencing an informal probate or appointment proceeding rather than on claims as such. And Texas sets no general deadline at all: a claim may be presented at any time before the estate closes, so the only cut-offs are ones the executor creates.^{Source 4Source 8Source 3Source: Texas Estates Code §355.001 — presentment of a claim at any time before the estate is closed (opens in a new tab)•}

Where the executor holds the lever, using it is a decision rather than a formality. Texas requires published notice within a month of letters and written notice to each known secured creditor within two; separately, it lets the executor notify an unsecured creditor, and that notice bars the claim if it is not presented within 121 days. The estate that never sends one keeps its exposure open until it closes.^{Source: Texas Estates Code §§308.051, 308.053 — required notice to creditors (opens in a new tab)•Source: Texas Estates Code §308.054 — permissive notice to an unsecured creditor and the 121-day bar (opens in a new tab)•}

So the question to ask about any bill is not only whether the estate owes it. It is when the death was, what the state's clock is attached to, and whether anything has already started it running. Your state's answer is in the table below. Where Sahvelo has not read a state's period at its source, it says so rather than giving you a figure to rely on.

What happens to each kind of debt

Credit cards

Unsecured, so they queue behind higher-priority claims and are frequently written off when an estate is short. An authorized user is not usually liable; a joint account holder is. Stop using the card immediately, including for funeral expenses.

Mortgages

The loan survives, secured on the house. A federal rule protects a relative who inherits a home from having the lender demand immediate repayment simply because ownership changed: the Garn-St Germain Depository Institutions Act limits enforcement of a due-on-sale clause on transfer to a relative on the borrower's death. Keep the payments current while it is sorted out, because a foreclosure clock does not pause for probate.

Medical bills

Estate debt like any other, with two complications: some states impose liability on a spouse for necessary expenses, and hospital bills are frequently wrong. Ask for an itemized bill before paying anything, and check whether insurance has been billed correctly first.

Car loans and secured debt

The lender has rights in the vehicle regardless of who inherits it. Either the loan is paid off or the lender is dealt with before a clean title can transfer.

Federal student loans

Federal student loans are discharged on the borrower's death, and a parent PLUS loan is discharged on the death of the student it was taken for. Private student loans follow their own contract, and some are not discharged. Sahvelo has not verified individual private lenders' terms.

What a collector is allowed to do

Federal law treats the executor as standing in the deceased person's shoes for the purpose of debt collection. Under the Fair Debt Collection Practices Act, "consumer" for the communications rules includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor or administrator.

The Consumer Financial Protection Bureau's Regulation F carries the same definition forward and adds the confirmed successor in interest. The effect is that a collector may talk to the executor about the debt, and that every protection the FDCPA gives a living debtor applies to that conversation.

What that means in practice

• They may not call at unusual or inconvenient times. Before 8am or after 9pm local time is presumed inconvenient.
• You can require them to communicate in writing, and it is worth doing.
• You can dispute a debt and require verification before they continue collecting.
• They may not misrepresent who is liable, and telling a relative they are personally responsible when they are not is a misrepresentation.
• Discussing the debt with people other than those the rule permits is restricted.

Put everything in writing. A collector who is wrong about your liability is much less confident in a letter than on the phone, and the letter is what you keep.