When someone in your family passes away, who pays their debt?

Viewing 1 reply thread
  • Author
    • David S.

        I have heard of stories from people who lost a parent and they end up getting stuck with the debt which not only ruins their credit scores, but throws their life out of balance. I am wondering how this is handled and if this is true that when someone passes in your family, like a parent of a child, the adult child must pay the remaining debts.

      • Alex R.

          The easiest way to put it is that their estate is meant to cover the cost of their debts. So if they own a house, the banks will take ownership of said house regardless of if it was meant to be left to a child or family. If they did not own a home, then there is nothing the creditors can do about it. Only in cases where there are joint accounts is a family member expected to pay.

          • Vince

              I honestly had no idea this was the case. I think it is unfair that if a parent leaves a house for their child or children, the bank can just take the full value of it. They should only be able to take what is owed and the rest of the money for the house should go to the children or if the children decide to keep the house, they should be able to opt to take a lean out on the house to pay for the debt.

        Viewing 1 reply thread
        • You must be logged in to reply to this topic.

        Join a vibrant community with the sole mission to achieve financial independence.

        The journey to financial freedom doesn't have to be lonely.

        Pitch an idea

        Contribute an article, share a story, join a group, or chat on the discussion board with similar frugal savvy individuals like yourself. Quality over quantity. Always.

        Build great relations

        Build connections, converse, and join the vibrant personal finance community. The journey to financial independence is just around the corner, and it doesn’t have to be lonely.

        Become a FangWallet Insider

        Get free access to becoming a FangWallet Insider, the personal finance community that has your best interest in mind.