Debts Of An Estate

by | Mar 16, 2016 | Estate Planning

Creditors will often attempt to collect on the debts of an estate from the deceased. Sometimes they do have a right to collect and other times they do not. Creditors can be aggressive while trying to collect debt and may pressure you into paying off a debt that you do not necessarily owe. Understanding the law is important so that you can avoid being bullied into paying off debt you do not owe.

When Do I Have To Pay My Loved One’s Debt?

In general, the rule of thumb is that you cannot be held personally responsible for the deceased’s debt. You may be responsible if it is a joint account, or if is your spouse’s debt in a community property state. South Carolina is not a community property state. Further, a creditor may attempt to collect from the estate of the deceased. The creditor has a right to assets before they are passed on to heirs, however, there are some assets that are exempt.  Also, if the assets in the estate do not cover the amount owed, the creditor is out of luck. A creditor cannot collect money beyond what the estate has.

The creditor should talk to the executor regarding any debt owed. If you are the executor, you may want an attorney’s assistance in determining the best way to pay off debt. Otherwise, if you are being contacted by creditors, you have no obligation to respond to them and should refer them to the executor. If you are not an immediate family member or representative of the estate, then the debt collector is forbidden from discussing the debt with you and may be in violation of the law.

Reporting The Death

If you have been appointed as executor, then it is your duty to notify any creditors of the death. It is also important to prevent identity theft by notifying the credit reporting agencies of the death and requesting a credit report. The Social Security Administration is supposed to notify all credit reporting agencies, but it is a good idea to take the responsibility of making sure it has been done. Identity thieves target the accounts of the deceased and notifying credit reporting agencies will help prevent identity theft.

No Personal Liability For Debts

You are not obligated to pay the debts of the deceased from your own assets, generally. If the estate has insufficient funds to cover a debt, the creditors simply do not get the money. Creditors frequently violate the law in their overly aggressive attempts to collect debt. If you are not the executor, they have no right to call you for any reason other than to get the contact information of the executor. If you are being harassed by a debt collector, the best course of action is to send them a letter via certified mail asking them to stop contacting you.

Contact An Attorney

After the death of loved one is a difficult time to handle complicated finances. Harassment from creditors is unwelcome and may even violate the law. If you are the executor of an estate and have been overwhelmed by aggressive creditors, the lawyers of the De Bruin Law Firm can help. You need an estate planning attorney who knows which debts you are and are not obligated to pay.

Blog Categories


signing your will

4 Questions To Consider When Creating A Will

Making the decision to start estate planning by creating a Will is a very personal decision. Along with it being a personal decision it should also be a timely decision. No one wants to think about what could happen in the future. We’re all going to live to be 100...
Read More
signing your will

Benefits And Pitfalls Of Transferring Property Through Joint Ownership

Transferring property when its held jointly can come with certain complications. Joint ownership is a term that arises when more than one person owns property. And, ultimately, it can be used as a simple and cost-effective way to transfer property after death. For...
Read More
probate process in South Carolina

South Carolina Probate Process Part 1

When an individual dies, typically, at least some of the property that individual owned will be subject to probate. This means that the property must go through a formal probate process to be distributed according to the individual’s will. Even if the individual did...
Read More
signing your will

Do I Need A Trust Or A Will To Provide For My Child?

Parents who set out to create an estate plan to provide for their children’s care and welfare following the parents’ deaths have two main choices in estate planning schemes: using a will alone or a will in combination with a trust. In times past most parents would...
Read More

Estate Planning: What Does A Lawyer Do?

Much of the estate planning process is easy enough for a layman to understand. Many people choose to draft their own wills and other estate planning documents. There is an abundance of low-cost options that help people write wills without the supervision of an...
Read More
signing your will

Importance Of Discussing Inheritance With Your Children

You may not have discussed inheritance with your children yet, but it is an important conversation to have. Most families prefer to avoid conversations about this issue because it requires acknowledging the inevitability of death. However, by discussing these issues...
Read More

Introduction To Estate Planning

Failing to plan is planning to fail. While death is an unpleasant subject, it is important to have a plan for your assets after you pass away. Many people wonder if they really need a will and what will happen if they die without one. If you die without a will, your...
Read More

Myths About Estate Planning

Most people understand that it is important to have a Will and a plan for end-of-life healthcare. However, many people, especially younger people, have not actually accomplished any estate planning. There are many reasons why people put off estate planning. Here are...
Read More