When Someone Dies, Who Pays The Leftover Bills?
Posted on 01. Apr, 2009 by emmettjones in Wills
When someone passes away, the job of closing up their estate usually falls on the shoulders of the executor (or administrator) of the estate; who is either specifically named in a will or appointed by the court. Since it is the job of the executor/administrator to wrap up the affairs of the deceased, what happens with any creditors the decedent had before death?
The proceeds from the decedent’s estate are to be used to pay off the decedent’s debts. If the decedent’s assets are not enough to pay off the debts? The debts go unpaid.
Simply put, if the decedent’s assets are not enough to pay off the outstanding claims against the decedent, the claims would simply go unpaid and be forgotten. It is important to note though, that the claims against the decedent are paid out before anyone receives any sort of inheritance, so any one hoping to collect money from the decedent’s will, for example, would be out of luck as well. The one exception to the rule deals with those who co-sign on a debt or those who are joint debtors. Co-signers and Joint-Debtors would still be liable for a debt even after the decedent dies…
Example: John co-signs on a $100,000 for Jane. Jane dies days after receiving the loan. Once everything is calculated, Jane’s estate is only able to pay back $60,000 of the loan in question. John, as a co-signer is liable for the remaining $40,000 in question.
