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maxxturin
Posts: 1
Registered: ‎06-16-2008
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upon death who is responsable for payment of debt?

I have a bet going with my sister. She said when her husband passed he had no assets and his debt of credit cards and loans passed with him. She was the beneficiary of his life insurance policy and was a signer on the cards but they were under his name. IS this true? thanks Maxx
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caliborne
Posts: 263
Registered: ‎03-27-2008
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Re: upon death who is responsable for payment of debt?

We had to pay my Dads bills and cc's with the money he left us.
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FretlessMayhem
Posts: 3,279
Registered: ‎08-03-2007
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Re: upon death who is responsable for payment of debt?

Funny this came up, I was just talking to my dad about this last night.

He remained convinced that the estate pays the debts. I was philosophically arguing against that. If one has an account, with no AUs or joint people or anything, how could the CCCs come after them if the bills are left unpaid?

Can they sue the estate?
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marty56
Posts: 5,672
Registered: ‎10-06-2007
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Re: upon death who is responsable for payment of debt?

They could go after the estate but life insurance is not part of the estate so I dont think they could touch it.
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zeek69
Posts: 33
Registered: ‎02-16-2008
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Re: upon death who is responsable for payment of debt?

I believe that when someone passes away, their estate is responsible for any debt. If the estate has no assets, then the debt holders are out of luck.

Life insurance benefits that pass directly to the beneficiary are not considered part of the estate.
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zeek69
Posts: 33
Registered: ‎02-16-2008
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Re: upon death who is responsable for payment of debt?

[ Edited ]

FretlessMayhem wrote:
Funny this came up, I was just talking to my dad about this last night.

He remained convinced that the estate pays the debts. I was philosophically arguing against that. If one has an account, with no AUs or joint people or anything, how could the CCCs come after them if the bills are left unpaid?

Can they sue the estate?




They can sue the estate because in the eyes of the law the estate is a legal entity - an extension of the person who passed away.

Message Edited by zeek69 on 06-17-2008 05:46 AM
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gettintherequick
Posts: 56
Registered: ‎04-11-2008
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Re: upon death who is responsable for payment of debt?

[ Edited ]
One thing to remember, If there is a named beneficiary on the life insurance policy and that beneficiary has passed on or is unable to be found, the life insurance payout then is considered part of the estate of the departed. If, the named beneficiary is found and takes the life insurance payout then it is not considered part of the estate. These rules are state wide laws and will be different from one state to the other.
 
The estate can and will  be liquidated after a certain period of time, if not claimed and this will vary from state to state, to pay off any outstanding financial commitments.
 
If you are the beneficiary of the departed's estate then you are liable for all finacial obligations. This means if there outstanding debts, then they are yours. If there are assets, then they are yours. Estate assets are tax free up to a certain dollar figure and then the estate can be taxed as well. So it is always a good idea to determine if it is financially a good idea to sign on the dotted line when you have been left an estate.


Message Edited by gettintherequick on 06-17-2008 09:02 AM
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Phouchg
Posts: 86
Registered: ‎05-12-2007
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Re: upon death who is responsable for payment of debt?

about 10 years ago when my brother's wife's father died, he had over $30,000 in credit card debt. An evil collection agency for about $10,000 of that called and laid a guilt trip on my sister-in-law and flat out lied and told her that she was responsible for her dad's debts. "Don't be a deadbeat like your father was" she was told. She was threatened that the sherriff would come with a warrant if she didn't pay off the amount . Her and my brother took out a high-interest rate personal loan to pay this CA.
 
They now know better, but are still kicking themselves over falling for that. There are lots of people out there who are convinced that they are responsible for their parents debts. I wish resources like this board were available 10 years ago.
 
 
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FretlessMayhem
Posts: 3,279
Registered: ‎08-03-2007
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Re: upon death who is responsable for payment of debt?



Phouchg wrote:
about 10 years ago when my brother's wife's father died, he had over $30,000 in credit card debt. An evil collection agency for about $10,000 of that called and laid a guilt trip on my sister-in-law and flat out lied and told her that she was responsible for her dad's debts. "Don't be a deadbeat like your father was" she was told. She was threatened that the sherriff would come with a warrant if she didn't pay off the amount . Her and my brother took out a high-interest rate personal loan to pay this CA.
They now know better, but are still kicking themselves over falling for that. There are lots of people out there who are convinced that they are responsible for their parents debts. I wish resources like this board were available 10 years ago.





If someone talked to me like that I would set up a meeting with him and punch him square in the jaw.

You don't talk about dead relatives like that.
Here we go again...
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Creditaddict
Posts: 21,673
Registered: ‎10-23-2007
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Re: upon death who is responsable for payment of debt?

Debt collectors have to come forward and put a claim against the estate. In my state (KY) the estate remains open and should be pretty much left alone except for paying for maybe funeral and stuff for 6 months.  Once the 6 months has cleared and no one has posted claims then everything is released in full to the benif.  If there is no cash or house etc. left then the creditors are out of luck
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