When getting your affairs, one naturally thinks about dividing up their property and assets and ensuring your life insurance is in order for your family and loved ones to be able to carry out your final wishes. What your family shouldn’t have to deal with is overdue payments and collection calls. While some debt goes with you to the grave, there are others types of debt that your spouse and possibly your children may be responsible for when you pass away.
According to the Federal Trade Commission (FTC), there are four situations where debt can be “inherited”: if you a co-signer for the debt, you live in a community property state, you are the spouse and your state requires you to pay certain debts, or you didn’t follow the laws in your state when resolving the estate. Alternatively, creditors have the right to file a probate court claim and take money from the estate before being distributed in order to satisfy a debt. When setting your affairs in order, find out if you leave in a “community property state” or consult with your attorney on this matter to find out the implications of state laws.
While most individuals don’t need to worry about inheriting debt, some creditors would have you believe that you should still pay off the debts as a sense of duty. If you’re being harassed by a collections agency or other creditors after your loved one’s demise, you may want to contact a Dallas bankruptcy attorney to find out if they have a valid claim and what you can do about it. Odds are, that if they did follow the proper channels, you wouldn’t be hearing from them. A qualified bankruptcy attorney can also help you if your deceased spouse left you with more medical debt than you can afford to pay back.