Who bears the debt burden of your parents?

It is not uncommon  to find in this part of the world that family relations gather after the burial of their brother to share his assets without first of all settling his liabilities or debt. At the end it is left for his immediate family – wife and children.

Consequently, the children of the deceased will have to struggle to pay off such debts before they can stand on their own. This will always have negative effect on their own financial life.

In the western countries, you are not responsible for your late father’s debt. In view of this, Miriam Caldwell, personal finance specialists, advise that you need to realise that you are not responsible for your parents’ debts as long as you did not co-sign on the loan with them.

Their debts will be covered by their estate, which means any money they have in the bank, and any money that the sell of the house or cars brings in. The credit companies will write off the remaining debt. It can be difficult to deal with your parents passing away, and you may find yourself struggling to make funeral arrangements and to manage everything else. It can be even more complicated if your parents did not have a will and if they are in a lot of debt. You may be wondering what will happen and what you can do to deal with it.

However, she said if there is not a will, you will have to go to probate court in order to have everything settled. This can take some time. While this is happening, you can contact your parents’ creditors and furnish the companies a copy of the death certificate.

This should stop any collection calls and possible foreclosure on the home until the estate is settled and the debt is paid out. If the collection companies begin calling you about paying off the debt, you can tell them you are not responsible for the debt since you were not a co-signer on the loan. You cannot inherit your parents’ debt.

If your parents had life insurance and you are a designated beneficiary, you do not need to use that money to pay off their debts. This is your money or your inheritance, and it does not need to be used to settle the estate. However, if there is no designated beneficiary on the life insurance policy, it becomes part of the estate and must be used to settle the debts before you can have access to any of the money.

HOPE MOSES-ASHIKE