When a person dies owing debts, the debts do not go away. However, in most cases the children of the debtor do not have a legal obligation to pay the debts of a deceased parent. For a person with a recently deceased parent who passed away with debt, it is important to understand the laws regarding these debts in order to deal with debt collectors that may make contact about the parent's debt.
Legal Requirements
In general, the only person responsible for paying a debt is the person who acquired the debt. For example, a child does not have an obligation to pay off a mortgage, credit card debt or other outstanding loans acquired solely by a deceased parent. However, if a child co-signed a loan application for a mortgage or a credit card, the child would share responsibility with the parent for the debt.
Debt Payment
Though a child of a deceased person does not have to pay the parent's debt, the debt will likely impact the amount the child inherits from the parent. When a person dies, his estate must use his assets to pay off any existing debt. For example, when a person dies only owning a house but having many debts, the estate may have to sell the house to pay off the other debts. If the person had more debt than assets, then the estate must sell off all of the assets to pay as much of the debt as possible. In this case, there will not be any assets for the executor to distribute to the children or other heirs.
Collection Calls
Debt collectors may call third parties such as the children of the deceased, but only to gather information on the person responsible for settling a debtor's estate. The collector may ask the third party for the name, address and phone number of the estate executor or other responsible party. The collector may not divulge any information about the debt to any person who is not legally responsible for paying the deceased debtor's bills.
Reporting Abuse
If a collector continually calls a child who is not responsible for a deceased parent's debt about the debt, the child may take action against the collector. The child should send a letter to the collector explaining that she does not have an obligation for the debt, provide contact information for the executor of the estate and demand that the collector stop further contact with her. If the collector continues to call, the child should report the collector to the Federal Trade Commission or her state's Attorney General. A person can also hire an attorney to sue a collector for harassment.
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