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Information About Debt and Estate Laws

Mark Cappel
UpdatedApr 3, 2024

When someone passes away, will the debt that they have be left to their children?

2 years ago the house my father in law was renting was accidently set on fire and now he has a $97,000 debt to the homeowners insurance company. He has no assets and I was wondering when he passes away will that debt be left to his children?

When a person passes away, the decedent’s debts do not automatically pass to his spouse, children, or anyone else. Debts incurred by an individual are owed solely by that individual; if a person dies before his debt is paid off, then the creditor can attempt to collect the debt from the individual’s estate, meaning that the debt would be paid before any money or other assets are passed to his heirs. However, if the person dies without sufficient assets to pay off the debt, then the debt is uncollectible and the creditor will likely write it off its books. The only way I can envision that your husband or his siblings would be liable for this debt would be if they had co-signed a lease agreement on the home, insurance documents, or other contracts which made them legally responsible for damage to the property. Since I presume that no one other than your father-in-law was living in the home, I have no reason to believe that your spouse or any of his relatives would be liable for this debt.

While a surviving relative is not liable to pay debts of the deceased out of his own assets, the probate court may require that any property belonging to the estate be paid to creditors before the heirs receive any inheritance. While this debt could reduce the amount of money which your husband inherits from his father, the creditor would not be able to legally pursue your husband directly for payment of the obligation. I strongly encourage you and your husband to consult with a qualified estate and probate attorney in your area to make sure that your husband has no personal liability for this debt, and to find out what effect the debt could have on your father-in-law’s estate.

Frequently, creditors will contact the surviving relatives of a recently deceased debtor to try to convince them to pay the debt owed by their late relative, despite the fact that the relatives are not liable. These collectors will often say things like Â"donÂ’t you think your father would want you to honor his memory by paying this debtÂ" (I have actually heard that line before). They often try to insinuate that a legal obligation to pay the debt exists, saying things like Â"but youÂ’ve been making the payments, so it looks like this is your debt.Â" Sometimes, they even state outright that a relative is legally obligated to pay the debt, which in most cases is absolutely untrue. Under federal law, making untrue or misleading statements in an attempt to collect a debt is illegal; if your spouse receives any calls from the insurance company or its collectors trying to convince him to pay this debt, he may want to report the matter to you state Attorney General’s Office, to the Federal Trade Commission (, and to your state’s insurance regulatory agency. In addition, your husband may want to consult with a consumer rights attorney in your area to discuss the possibility of filing civil action against the creditor for possible violations of state and federal collection law.

The bottom line in this situation is that your spouse and his siblings are almost certainly not liable for the debt their father owes to this insurance company. While there are some circumstances under which liability could exist, they are quite uncommon and would require that your husband took positive action to sign a lease, insurance agreement, or other document agreeing to be liable for the debt. I encourage you to consult with an attorney to make sure that no liability exists, but I can tell you it is very unlikely that your husband will be responsible for these debts. I wish you the best of luck for the future, and hope that the information I have provided helps you Find. Learn. Save.



Did you know?

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Oregon, 15% have student loan debt. Of those holding student loan debt, 8% are in default. Auto/retail loan delinquency rate is 2%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.