If a relative dies owing money at the time of death, the debts are not inherited. According to North Carolina laws, and likely other states, those debts might have to be paid from property owned by the person who died, but if the deceased didn’t own property then the debts may have died with the borrower. The heirs don’t have to pay those debts from their own money. I have spoken to people who believed that they were responsible for the debts of a deceased relative, and some even said that creditors told them that they were. Some of those people used their life savings or borrowed on their own credit cards to pay off the deceased person’s debts, and that was one reason that they were calling me to talk about filing for bankruptcy themselves.
Rather than filing bankruptcy to discharge debts that were incurred to pay debt someone else signed for, it is better to make sure you understand the law before paying debts you didn’t incur and don’t owe. There are some debts that are owed even if someone didn’t pre-agree to pay. Spouses and parents are liable for necessities, most commonly for medical treatments, but those debts are owed not because they are inherited, but because North Carolina law says the spouse/parent owes the money.
If you have any questions about your legal liability on a relative’s debts, you should speak to an experienced attorney about the debts in question before paying them off yourself.
See also: What Happens When a Chapter 13 Debtor Dies? By Jill Michaux, Kansas Bankruptcy Attorney
Good News for Responsible Spouses: You Aren’t Responsible for the Other Spouse’s Debts By Craig Andresen, Attorney at Law
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