If person does not have enough in assets to cover their debt, does their family inherit their debt? Who has to pay? What if there is nothing to recover. Say the debt in question is for a car that is upside down in value/debt. OR What if it were leftover financial aid for school debt. Who ends up paying for this, hospital bills? Assume unmarried adult, living parents and siblings no decendents.
Answers:
You need to get a lawyer to probate the death. If this is done properly the debts will be forgiven. It happened to me with my mother's car a few years back, it was horribly upside down, my choices, after talking to the bank were to refi in my name or surrender it back to the lender. I chose to surrender it back to the lender because it was not a practical vehicle for where I live. They sold it at auction and that was the last I heard about it. Usually if you call the lenders and send them a copy of the death cert they just forgive the debts.
The debt stays with the estate. If the debt exceeds the value of the estate, there is no recourse, no one else is responsible.
No the debt is part of their estate. Unless it is in someone elses name too (a cosigner) they are not liable.
If there are not enough assets to cover the debts , the balance is written off. The debts of one person are nontransferable unless another person has possession of property given to them by the debtor to hide that property from the estate.
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