As a country, America has around $13 trillion in debt. People who are 45 to 54 years old have the highest debt average at $134,600. This brings up a point that many people might not think about very often -- the status of debts when a person dies. This can be a difficult thing to handle when you lose a loved one.
There are a few different things to remember about debts of a decedent. If you are charged with handling the estate after your loved one dies, you should make sure that you understand these.
Family members' role
Family members aren't responsible for the debts of a loved one who has died. The only exception is if you are a co-signer or co-owner of an account with the person who passed away.
The decedent's estate is where the money to pay creditors will come from. These have to be handled in a specific order based on the category of the debt. If there isn't enough in the estate to cover the unsecured debts, the creditors will have to write off the balance. In the case of secured debts, they will either need to be paid off or the creditor can repossess the asset that secured the debt.
Debt collectors can be ruthless
Even though family members aren't responsible for the debts of someone who passed away, debt collectors might still try to collect. In fact, some of them can be downright ruthless. Harassment can even occur. You might find that you have to be very firm to get them to stop calling or contacting you.
Don't give out any of your personal information. Keep the details minimal. Don't let them push you into making any payments or agreeing to take the debt as your responsibility.
If you realize that a creditor isn't relenting, you might have to send out a letter demanding that they stop contacting you. Give them the information for the personal representative or administrator over the estate. That is the person they need to turn to with any collection attempts since the individual is responsible for this aspect of the estate.