Can I inherit credit debt?

Thank you for your question about inheriting debt.

Perhaps a cause for your concern is that the laws may be different in Germany, where you live, than they are in the United States.

Please remember that I am not an attorney, and therefore cannot provide you with legal advice specific to your situation. I am happy to share some opinions that I have, but if you want an answer with legal authority, I strongly advise you to consult with a qualified attorney to discuss this issue further.

Here, in the USA, a debt that belongs solely to the parent is not inherited by the children or heirs. If your son’s father-in-law dies with large debts, it may be the case that all of his creditors will not be paid off, if his estate lacks the assets to do so. In that case, it will be the creditors who suffer the loss.

The recourse available to the creditors is to collect from the estate of the deceased. Assets from the estate, such a real estate, personal property, and financial accounts, will be liquidated to pay off the bills. Secured debts will be paid from the assets first and then unsecured debts, such as credit cards.

A way that your son could be affected is if his wife has a joint account with her Dad. Even then, your son would only suffer indirect harm, as it would hurt his family’s finances, but it would not put property that is solely in your son’s name in harm’s way. He does not have direct responsibility for any debts his wife took responsibility for. If she did take responsibility, by being a joint holder on a credit card account with her Dad, for instance, she would be subject to collection. If that were to happen, it is possible that a bank account that your son shares with his wife could have the funds attached, were the creditor to obtain a judgment against your son’s wife.

If your will leaves property to both your son and daughter-in-law, and she were responsible for her Father’s debts, there could be a risk to the property in Germany. If she does have financial responsibility for some of her Father’s debts, it may be prudent to make sure that your property is left only to your son.

As a practical matter, your daughter-in-law should avoid being listed on a joint checking or bank account with her Dad. She should not be a joint holder of a credit card account and should not co-sign on any loans he takes out. If she avoids taking financial responsibility for her Dad’s debts, then the creditors cannot make a valid claim to make against her.

Additionally, it may be prudent for her to not pay any of her Dad’s bills directly from her account. Were she to offer him financial assistance, it is better for her to send money to him from a check from her account to him, so there is no sign that she has taken responsibility for directly paying his debts. While simply paying bills from her account does not cause her to have legal liability for his bills, it seems best to err on the side of caution and keep things as clean as possible.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com.