Dealing with estate settlement can be extremely stressful and overwhelming. You may have questions as to how to go about handling certain affairs. For example, most people are confused about what debts must be paid during estate settlement, especially when there is not sufficient funds in the estate to pay debts.
If youre wondering what debts youre responsible for paying, take a look at the following information.
What if your loved one leaves behind thousands of dollars in credit card debt?
You might be fearful that youre responsible for paying off credit card debts with your own money. However, youre never required to pay estate settlement debts with your own money. And, youre not responsible for paying unsecured debts at all, if the estate is insolvent.
You are NOT personally responsible for the debts of others
You are not personally responsible for the debts of others, even if you have been named as the executor of the estate and even if the decedent is a relative such as a parent.
What happens to the debt if I dont pay it?
Credit card debt and other unsecured debt are simply written off by the creditor as a part of doing business.
If there is secured debt, the creditor can seize the property and sell it, keeping the proceeds up to the amount due on the loan. For example, a mortgage company can foreclose on a house to pay off the mortgage. A car loan creditor can repossess a car to pay off the car loan.
Beware of false information
It is likely, very likely, that creditors wont disclose that you are not obligated to pay debts for an insolvent estate. Let your probate attorney know if you are receiving harassing correspondence or telephone calls from creditors of the estate. Hell put a stop to it immediately.
Consult with a qualified probate attorney
Consulting with a qualified probate attorney can save you money, stress, and time during the estate settlement process. Your attorney will handle the settlement of debts as appropriate for the estate.