Tips on How to Deal with a Deceased Relative’s Debt

Posted by Shaun Morgan in DebtMarch 3, 2023(Last Updated March 3, 2023)5 min read
Key Takeaways
  • Debt doesn't go away when someone passes away.
  • The first step is to find out if you're responsible for the debt of a deceased relative.
  • The executor of the estate needs to handle the debts as soon as possible.
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When you have the death of a loved one, grief should be the number one thing on your mind. Dealing with the pain of loss, sadly, also comes with dealing with the aftermath of someone passing away. That means dealing with a deceased relative’s debt and assets, known as their estate. It is important to know what happens to debt when someone dies to handle this well.


What Happens to Someone's Debt When They Die?


First of all, there is no debt relief when someone passes away. That money is still owed, but since that person can no longer pay, their estate should handle the debts. This means that your deceased relative’s assets, including money in the bank, stocks, bonds, real estate, and other valuable items, should be used to pay for the debt.


When someone dies, the estate, under the direction of the executor, is responsible for the debts to pay. Since it is relatively common for executors to be slow to start handling a deceased relative’s finances, their debts often go to collections. That means an important part of dealing with a deceased relative’s debt is knowing how to handle a debt collection agency.


woman looking out window

Image Credit: Ground Picture /


Are You Responsible For the Debt of a Deceased Relative?


When a debt collection agency comes knocking, the first question you must ask yourself is, am I even responsible for this debt? If you can honestly and legally answer that question, no, you can breathe easy and get debt collectors to stop bothering you. But, if you are responsible, then it is time to take action—fast.


Legally, only two people are responsible for a deceased relative’s debt. 


  1. The first person is their spouse. When you get married, you legally start to share in most things, including debt. Debt consolidation means if you were married to the deceased person, you are responsible for their debt in most cases. If you are a family member, not married to them, and they have a surviving spouse, you are not responsible.
  2. The second person who might be responsible for the debt is the executor of the estate. Since the estate still owes the debt, the executor of the estate needs to pay that debt from the estate. That also means the executor of the estate has the right to negotiate with debt collectors and come to a settlement.


Recommended Read: Six Benefits of Estate Planning


Next Steps: If You are Responsible for the Debt


If you are the spouse of the deceased person or the executor of the estate, your responsibility is to pay off the debt as quickly as you can. If the debts haven’t been sent to collections, it is important to talk to the lenders as quickly as possible to avoid getting sent to collections. They may be willing to work with you on price or a payment plan while the estate gets settled. If it has already been sent to collections, try to come to a settlement as soon as you can to stop collections calls. Also, advise your relatives not to talk to the debt collectors since, legally, that is not their responsibility.


Lastly, if your deceased relative doesn’t owe anything and debt collectors are calling, remember you have the right to dispute their collection and get them to stop. Send them a letter detailing why you don’t owe the debt and ask them to stop the collection. They might be able to prove that you do owe the debt, but until then, they are required to stop calling you. If you know you don’t owe the debt, you can also take the collection agency to a small claims court to settle the dispute. Just make sure you have all the evidence you need beforehand.


Next Steps: If You Aren’t Responsible for the Debt


If you aren’t the spouse of the deceased or the executor of the estate, your job is much easier; don’t worry about it.


The debt is not your debt. So if a debt collection agency starts calling you, tell them that you are legally not responsible for that debt and remind them that they legally can’t discuss the debt with anyone but the spouse or executor.


If they try to imply that you are responsible, remind them that legally they can’t do that either. If they continue to call you after all this, then it is time to threaten them with legal action. A threat of legal force is usually enough to stop a debt collector from calling.


This doesn’t mean that your problems are over. Debt collection agencies are tenacious and don’t like to stop before they get paid. Make sure all of your relatives know their rights and talk to the estate executor about the debt collector, so they know the debt that needs to be paid. A debt collection agency might take you, or your deceased relative’s estate, to court if they believe they have a strong enough case. So, if necessary, encourage the executor of the estate to pay the debts or make a settlement with the debt collection agency as soon as possible to avoid a costly court case.


Recommended Read: Trust Vs. Will: Differences to Note in Estate Planning


What's Legal/Illegal for a Debt Collector To Do?


Debt collectors are supposed to follow strict rules about behavior and who they talk to. Here is a summary of what they can and cannot do so you know your rights.


Debt Collectors Can:


  • Collect unpaid debts from the deceased person’s spouse or the estate executor.
  • Call relatives of the deceased once to try to get contact information.
  • Continue to try to collect the debt if they can prove you owe it.
  • Sue in court to collect the debt.
  • Report to a credit bureau if the debt you're responsible for goes unpaid.


Debt Collectors Cannot:


  • Talk to people about the debt other than the deceased person’s spouse or the estate executor.
  • Lie or bend the truth about who is responsible for the debt.
  • Harass you to pay the debt you don’t owe.
  • Contact you 30 days after you’ve disputed a debt.


The Money Wrap-Up


Losing a relative is never easy, but dealing with debt afterward can make it worse. Understanding your rights, who is responsible, and the best way to deal with debt collectors will make the whole process run more smoothly. In general, the faster the estate can pay off the deceased person's debts, the easier it will be. This will allow you to grieve properly without debt.


Main Image Credit: Ground Picture /

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