Many people who become executors are unpleasantly surprised to learn that creditors can continue to seek repayment after a person’s death. It is not quite as bad as it might, however. Some debts will simply go unpaid after the debtor dies. Any outstanding debts that must be paid will be paid from the estate. If there are insufficient funds in the estate to pay off all the debt, the debt collectors typically cannot get all their money back.
Executors, heirs and relatives are generally not on the hook for these debts. In fact, surviving relatives have rights under the Fair Debt Collection Practices Act, protecting them from unfair or abusive acts by debt collectors. Sometimes, debt collectors press surviving relatives, hoping to get their money back through intimidation or deception. If this happens, the relatives should talk to a lawyer right away.
Note that others may bear some responsibility for paying off a debt if they owned part of the debt at the time of the debtor’s death. For example, debt on a joint credit card account passes to the survivor. In some cases, a person who co-signs a loan may inherit the debt. Surviving spouses often do have some obligation to pay off a deceased spouse’s debts, but they may have some protections under Texas law and the terms of the loan.
Estate administration requires a lot of exacting, detail-oriented work. This often comes at a time when executors are still actively grieving the loss of a loved one, all while trying to balance their own work and family responsibilities.