Can a Relative Be Forced to Pay a Deceased's Debts?

General Guide

• Typically, creditors and debt collectors cannot hold a relative of a deceased person responsible for their debt, says the Federal Trade Commission. In many cases, if the executor of the estate cannot resolve the debt due to lack of funds, creditors simply write off the loss on their taxes or file a claim with their insurance agency. However, there are exceptions where creditors and debt collectors legally may ask a relative for payment.
  
  

Exceptions

• The FTC identifies four major instances in which it is possible for a creditor or debt collector to seek payment from you for debts left by a deceased relative. The first of these is if you cosigned on any of the debt. If you cosign on a debt, you accept liability for the debt and therefore can be held responsible even if the other people involved in the debt no longer are living. This is one reason why financial experts recommend not cosigning unless you are absolutely prepared to pay the debt. The second exception is if you live in a community property state. In these states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin -- the state government views you and a spouse as one unit for most types of property, which means you own both the assets and debts your spouse accrues. The third example is if there is a state law requiring you to pay insurance premiums. For example, you may be entitled to continue receiving health insurance benefits under the deceased's policy as a survivor or widow for a specified number of months, but only if you continue to pay the premiums. The last example is if you were responsible for administering your deceased relative's estate and failed to comply with some aspect of probate law.
  
  

FDCPA

• The Fair Debt Collection Practices Act (FDCP) is a federal law that protects consumers against unethical treatment by creditors and debt collectors. Under FDCPA, you still have the right to request that the debt collector or creditor validate the amount of the debt and prove you owe. This law also protects you from harassment and threats the creditor or debt collector may make. It allows you to request that the creditor or debt collector cease contact with you if you send a written request; after the request, they can contact you only to tell you about planned legal action or to confirm that no further contact attempts will be made.
  
  

Bottom Line

• Some individuals do end up having to pay the debts of their deceased relatives. However, the creditor or debt collector has no right to ask you for payment for a deceased relative unless you are the estate executor, a spouse or a cosigner. Even if you fall into one of these categories, other regulations such as the statute of limitations may apply. Therefore, it's best not to presume you are responsible. Always check with an attorney before you make any payments. Even when the debt collector or creditor can ask you to pay, you still have rights under FDCPA you may exercise.