DON’T INHERIT DEBT!

Posted by Tom Martino at 12:41 pm 49 Comments Print

Don’t be fooled!  No one can die and strap you with debt!

So many people worry when they’re parents, kids, aunts or uncles are deep in debt.  They wonder “What if they die?  Can I be trapped with their debt?”

What if I inherit a home and the mortgage is more than the home is worth?  What do I do?

The answer to all questions above:  “No worries!”

No one can leave you debt and force you to take it!  You only inherit debt if you voluntarily choose to accept it.  If someone dies with credit card debt, you will not be responsible for it.  At worst, the credit card company and other creditors can put in claims against the estate. The estate must then settle these claims before assets are distributed.  And if the assets are less than the debt, you can simply walk away.  There is no obligation for you to take on home mortgages or credit card accounts or any other debts of the estate.

After someone dies, you must publish a “Notice to Creditors”, as required by Probate Law.  If creditors do not make a claim, they lose their rights.  However, secured debt (like car loans and home mortgages) stay in tack and must be paid off if you wish to keep the secured property.

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