Claims against the estate may reduce your inheritance, but only joint account holders would be on the hook.

Losing a loved one is never easy, especially when it’s a parent.  On top of the emotional stress, there are countless financial stressors to think about as well.

For children of parents who have passed away, the initial concerns are usually the funeral and taking care of the contents of their home. But bills are often found during this clean up.

Debt of a Deceased Parent

The debt of a deceased parent can be daunting. You often won’t know how much debt your parents had, which bills were automatically paid and which were handled individually. It’s important to track down as many of the bills and debts your parents had so that you won’t be hearing from the companies later down the line.

What to Do with Your Deceased Parents’ Debts

The first thing you should do with your deceased parent’s credit card accounts and loans is call the individual creditors. Inform each of them about your parent’s passing. This will close the account and inform the creditor that paying this debt will be handled in probate. Probate is what is done by the state or through attorneys either by verifying a will or assessing the estate. If there is no will, the state will look at the assets of the deceased’s estate and pay off any debts. This can take months for a court to figure out.

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Q:Do you inherit your parents’ credit card debt?

A: In most cases, children are not responsible for their parents’ debts after they pass away. However, if you are a joint account holder on any credit cards or loans, you would be liable for paying off the amounts due.

When you open a joint account, it means that you and whomever who are sharing the account with are equally liable for paying off any debts incurred. This is not the case if you were an authorized user on the account. An authorized user is not responsible for paying the account and would not be shouldered with the debt.


Q:Do I have to pay deceased a parent’s debt?

A: There are two kinds of financial debt when it comes to settling your parents’ estate: secured debt and unsecured debt.

Secured debts are loans like a mortgage or a car loan. These accounts have goods attached to them that can be sold or returned in order to pay back the loans. Credit cards on the other hand are unsecured debts. When the cardholder dies, there is nothing securing the borrowed money that needs to be paid back. This means that the credit card company has to take a loss.

If your parents die and leave debts without enough money to cover them, creditors may come after you to collect. It is not your responsibility to pay.

Once the estate is in probate, an attorney or the state will create a list of debtors needing to be repaid. First come any secured debts and outstanding loans, last will be credit cards and other debts.

If your parents are leaving you an inheritance, it could be used to pay off their debts before you get your share.


Medical Debt and Filial Responsibility

If your parent had been ill for some time before passing away, be on the lookout for unpaid medical debt. Thirty states have laws that require the adult child to repay any unpaid medical bills that the parent or their estate can’t cover. These are called filial responsibility laws. Many states don’t impose them, but there have been cases in the past where hospitals and nursing homes and sued adult children in order to be paid.

Q:Do you have to pay your deceased parents’ medical bills?

A: You may be responsible for paying your parents unpaid medical bills if you live in one of these states:

Alaska Louisiana Ohio
Arkansas Maryland Oregon
California Massachusetts Pennsylvania
Connecticut Mississippi Rhode Island
Delaware Montana South Dakota
Georgia Nevada Tennessee
Idaho New Hampshire Utah
Indiana New Jersey Vermont
Iowa North Carolina Virginia
Kentucky North Dakota West Virginia

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Article last modified on April 14, 2022. Published by, LLC

Reviewed By

Howard Dvorkin, CPA

CPA - Chairman & Personal Finance Expert