Debts After Death

After Sima Matthes' husband passed away in 2006, letters asking that she pay off his credit card debts began arriving within a month.

"I found out only after I'd paid that I wasn't responsible for debt incurred only in his name," says the 41-year-old assistant preschool teacher who lives in Freeport, N.Y. "If I'd known that before, I'd have used that money to pay other bills."

Debt collection agencies frequently employ specially trained representatives who make sympathetic calls to husbands, wives, children and other family members to urge them ever-so-gently to pay what the loved one owed.

But you can hang up.

"There is an orderly court process, called probate, for the collection of a deceased person's debts," says Sally Hurme, senior project manager of health and supportive services at AARP, "and it doesn't include harassing calls from debt collection agencies."

Such calls are frequently successful, with some families believing it a matter of honor to pay family debts. But a consumer alert, "Paying the Debts of a Deceased Relative: Who Is Responsible?," published by the Federal Trade Commission, warns that a surviving family member usually has no legal responsibility for the debts of a deceased relative. According to the FTC, typically only a surviving spouse can be required to cover the deceased's debts, but even that obligation may be limited, as Matthes learned the hard way.

"You really need to consult an attorney in the state where the will has been filed," says Martin Shenkman, a New York attorney who specializes in estates. "The impact of state laws can be significant."

Creditors file during the probate process, and debts — whether an electric bill or a mortgage — are paid out of the estate before disbursements are made to heirs. Often secured assets — like a house or a car — have to be sold to pay the deceased's debts. If there is not enough in the estate, debts typically go unpaid, but it's possible that legitimate creditors can completely deplete an estate, leaving nothing for the heirs.