A surviving relative, even one who is an heir, is not responsible for a parent's debt. Debts are not wiped out by death, however. Debt collectors may legally seek from the estate of the deceased borrower payment for any debts owed.
Debt Survives Death
A parent's debt remains active even after death. Debt collectors also remain active. Sometimes, according to the AARP, they start calling relatives after the borrower's death. They know the relatives have no legal responsibility to pay, but that doesn't always stop them. The proper way for a lender to collect a debt after death is to make a claim in probate court or to a successor trustee of the debtor's trust estate.
Debt Responsibility Doesn't Transfer with Estate
If your parents left you everything in their will, what you are entitled to is everything they had minus what will be paid to their creditors before the contents of the estate are transferred. The remainder will transfer to you, not the debt. If the debt collectors do not respond to notices from the probate court or successor trustee, those debts will be expunged.
Exemptions from Debt Collection After Death
Life insurance is exempt from debt collection. Some states place exemptions on estates from debt collection after death. In Minnesota, for example, one vehicle, one house and up to $10,000 in belongings are exempt from most creditors. Creditors with secured debt, however, such as mortgage lenders, are free to foreclose upon or take back the secured property for repayment of the debt should the estate or heirs not keep up with payment.
When There Is No Estate
Not everyone leaves an estate. It is entirely possible to die with only debts and no assets. In that case, the debts are not collectible and the lenders must write them off as losses.
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