Can I inherit My Parents Debt?
I ask because right now my parents are fighting against my grandfather over who is going to help him pay off his debt. Apparently he accumulated about 250k in tax debt over the past 5-10 years... He's a realestate agent and one year made close to 2 million dollars, and spent it all that same year. My grandmother used her own money for herself, he spent his money on his own things, and gifts for him and his mistress. So my mom and her siblings feel they should get thier mothers things, and my grandfather thinks that if they get her things, then they should pay half HIS debt. But they didn't get anything, he sold it all, moved in with his mistress, and my grandmother left him penniless... so he got what he deserved (he was taken off her insurance a couple years before she passed).
Well anyway. My parents are about 40k in debt PLUS thier house mortgage, car payments, all that jazz. ANd i fear that instead of putting all the insurance money into these debts, my parents just went on a spending spree :(
They are extremely irresponsible people... they drink as if they are 21 (they are close to 60 D:) and both chain smoke. They drive home drunk or under the influence... and party at least once a week. I fear they wont see thier grandchildren in the future :(
But because of this irresponsible nature, i'm seriously worried that when they pass, sense i'm the oldest child (and the unfavourite).. that I will inherit all thier debt ( or even have to split it with my brother). Is it possible?
Cause if it's a 100% garauntee...then my husband is telling me to disown them for legal reasons. Still treat them as family, see them, yadda yadda, but disown them :x
- Jeanne RLv 710 years agoFavorite Answer
Children (or any other heir for that matter) cannot inherit debt UNLESS that person has cosigned for the debt. If you have signed a credit card application as a coborrower or otherwise cosigned a loan then you will be liable for the debt if the primary borrower doesn't pay the debt regardless of whether they are dead or alive.
That being said, any or all assets of the deceased will have to go to pay any outstanding debts that that person owed. That includes any mortgages on real estate. Those debts must be paid, using any assets owned by the deceased, before the estate is distributed to the heirs. If there are not enough assets to pay all of the debts then some of the debts will go unpaid. Debt collectors will tell you that you have a legal responsibility to pay any remaining debts owed by the deceased but that is an out and out lie. You do not have to "disown" your parents just don't sign any papers having to do with any of their debts or credit accounts.
- JoeLv 610 years ago
Children are not legally or ethically liable for their parent's debt, although debt collectors will try to make them think they are. The only exception is if someone cosigned a loan or credit card with them. If a person leaves an estate (such as a house or bank account), creditors can attach that, and they will take their cut before the heirs can inherit it.Source(s): U.S. Articles http://missourifamilies.org/quick/financeqa/finqa1... http://articles.moneycentral.msn.com/CollegeAndFam... http://www.bankrate.com/brm/news/debt/20050527a1.a... http://law.freeadvice.com/estate_planning/probate/... U.K. Article http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Ma...
- MadManLv 710 years ago
Debt cannot be passed on to children unless the children signed for the debt. If their estate cannot cover the debt, the creditors lose out.
- golferwhoworksLv 710 years ago
not unless you co sign some thing with them. Any thing they won must be sold to satisfy their debts during probate. Any thing left over can then go to the heirs of the estate
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- 4 years ago
No Their estate receives it The assets have to be liquidated to satisfy any outstanding debt left by the deceased
- Anonymous10 years ago
You don't inherit anyone's debt unless you're a coborrower or cosigner. Just make sure you keep all your personal finances strictly separated from those of your family. No joint bank accounts, no joint loans, etc.