I would like to know who is responsible for paying parents debts when they pass away? These parents have no money, no estate, no assets. Are the debts just forgiven? Do they go after the family? Who pays the bills? Who pays for the funeral? The car and house is in the children's name. Can they take these items?
I am asking this for someone who needs to know. They asked me and I have no idea how this works, but I know someone here will. Thanks. By the way, if the law matters, this would be in Michigan.
By Ariela from Jax
By Julia - Nineveh, Indiana (Guest Post) 10/06/2007
I just went through this with the passing of my mother. If the children are co-signers on anything then the debt is the children's responsibility. If the debt is in the parents name only it is the estate. An estate has to be opened when there are assets in excess of $25,000 for Indiana. My mother also had nothing. Life insurance payments are not considered an asset of an estate. Creditors can be vicious and nasty. However most of them will accept an official copy of the death certificate and write off the debt. Family is only responsible for what they sign for. If you have arranged the funeral and have signed for it you are financially responsible for it. We were lucky because mom had life insurance and the funeral home gave us 90 days same as cash. If you have any problems I would consult an estate attorney. It may cost you about $150 for a consulatation, but then you will know where you stand and what you need to pay for and what you don't.
By (Guest Post) 10/06/2007
My mom passed away in 2005 and she too had nothing... except for alot of bills! She lived in Mass and I live in NJ. She lived in her apartment untill 3 months prior to her passing when she moved here with me. I signed NOTHING for her. After she passed away I got calls & letters from all of her creditors. Many of them tried their best to get me to pay off her bills.. no way! I sent them all a copy of her death certificate and threw away every bill that came in her name after that. After a while they finally gave up. That was 2 yrs ago. You are not responsible for anything you have not signed for. If something is in the kids names, it belings to them. My mom signed her car over to my sister so they couldnt take that, plus she sold all of her furniture prior to moving here. Theres nothing they can do to make the kids pay..and dont let them tell you otherwise.
As far as I know it's the "Estate" that is responsible.... Hmmmm That makes me wonder... If they owe more than they have, Can the executor of the estate have the dead person go bankrupt AFTER they have died?
If she has not used her credit card or paid any bills on a credit card for 7 years (in most states) then according to the law her contract with this company is nul & void...
7 years on a written contract & 3 & a half years on a verbal contract. Every time you use the credit card or send in a bill the 7 years starts all over again. So the question is: Does she have any bills over 7 years old? This is a long shot, but for those of you out there... Now you know. They have to take all old bills off your credit record after 7 years of non use & non payment.
Also, my son called his credit card company because his card had gone into their internal credit area for late payments (when he was laid off from work) & when he agreed to pay his bill off, in TOTAL, in 2 payments they halfed his total owed! I've heard this is common, most credit it companies would rather have you pay half the bill & call it even, than not to get anything at all.
womans day this month (octber) has awhole artticell on this issue pluse tips
I went through the same thing with my Mother in 2005. She was on Social Security and received food stamps. After her passing, I found out at the hospice that certain funeral homes have contracts with department of welfare, and my mother's cremation was paid in full. Any extras, obviously my sister and I paid for. Regarding any bills, I sent the companies a copy of the death cert. and this sufficed. Me and my sister were not liable for anything.
You need to contact an attorney about the laws where you live. Usually a house and auto are considered assets. If the mother signed certain statements before she went to a hospital or whatever for care, they may be able to place a lien on those assets, especially if she gave them to the children within a specified time before her death. In some states, they'd have to be in the children's names longer than 7 years, or they'd be fair game to the collectors.
Assuming the parents didn't set up a will or trust to benefit their children, the estates will be informally administered through the court system. The estates administrator (probably one of the children), appointed by the court, will submit all unpaid bills to the court, will send all creditors a copy of the death certificates and will use any money in the estates to pay off bills. If there isn't enough money to pay all the bills, the court will formally write off whatever bills are left, will issue a court order to that effect, and the children will owe nothing. It takes a while, but this is a time when you want to make sure that the children are legally protected from creditors who would love to have them pay off those bills.
As for the funeral, the adult who signed the contract is liable for payment. The car and house can probably remain with the children, as long as they were not given to them recently and "in contemplation of" the parents' death, that is, the parents were not trying to avoid paying their bills. "Recently" is usually a year or 2, but you should check with a Michigan attorney who handles estates. A phone call or short office visit is usually free.
By (Guest Post) 10/24/2007
Ok I am wondering on how it does work then if you have a power of an attorney on your checking account in case something happens to you & you can't write out a check. Would they still come after that person?
Please help me
By liz 06/25/2008
My mother passed away last month and I live in texas. We have medical and dr. bills that have been coming in. The house is in her name but shortly after she died was being changed into the kids names. Are we responsible for the bills and would they put a lean on the house? I also wanted to know about the taxes, since she was living through May of this year and paid less taxes will they stay that way for the taxes coming due in Dec or Jan. and then go up the next year?