- If you have a joint account with your deceased loved one, which you have co-signed for, then you become responsible for that debt. Keep in mind that “authorized users” who aren’t joint account holders are not responsible for the debt.
- If you aren’t on the account, you don’t inherit the debt. Instead, the debt should be paid off with assets from the estate. In cases where there are unpaid debts when your loved one dies, the Successor Trustee of your trust or the Executor of your Will should use the assets to pay off debts. Secured debts (mortgage, car) are paid first, and unsecured debts, such as credit cards, are tackled next.
- If there is not enough money to pay all the debts, some creditors might have to take a loss – every state has laws specifying which types of creditors have priority over others.
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