Medical Debt After Death
It’s natural to worry when a loved one has died, and you start to realize that the medical and credit card bills have piled up. Are you responsible for paying them? In most cases, the answer is no. Exceptions can exist, such as if you’re the surviving spouse and you live in a community property state, but for the most part, heirs cannot inherit debt.
Just who is responsible for the medical debt that accrued at the end of a loved one’s life? The answer to this question is every lawyer’s favorite answer: it depends. Whether a surviving spouse is responsible for paying for a deceased spouse’s end-of-life medical care depends, first, on how the debt is structured. And second, whether the deceased spouse’s estate has enough money in it to cover all its costs.
Can The Estate Afford To Pay?
When someone dies, his or her assets and debts become known as his or her estate. The estate will be managed by an estate administrator who is either appointed by the courts or named in the deceased person’s will. It is the estate administrator’s responsibility to pay off any debts using funds in the estate. If there is anything left over, the estate administrator then distributes it to the parties named in the deceased person’s will or to his descendants and heirs as determined by order of a probate court following state law.
There are many estates out there that do not have enough money in them to pay off their debts. When this happens, creditors begin to look to surviving relatives for payment. State and federal statutes dictate which creditors should be paid in full, which will receive only partial payment, and which will get absolutely nothing. In some states, such as Florida, medical bills take precedence if they were incurred within so many days from the decedent’s date of death, usually 60 days. The personal representative would have to pay these debts first, and creditors such as credit card lenders would have to share in any money that’s left over proportionately.
If You Co-Signed on the Debt
When trying to determine who is responsible for paying off the deceased person’s debt, the first thing to do is to check the paperwork. Spouses who co-sign financial documents are generally held accountable for each other’s debts. If you co-signed on a credit card or an auto loan, this debt does not go away with his death even if the estate is insolvent. In this case, consumer law trumps estate law. The lender has someone else contractually on the hook for this money. The creditor can pursue the entire unpaid balance, just as it would be if the decedent had lived but had defaulted on the loan instead.
Bankruptcy Is A Last Resort
If you are being held responsible for a deceased loved one’s debt, and you cannot afford to pay, bankruptcy may be an option. If you qualify for Chapter 7 bankruptcy, then most, if not all, of your deceased loved one’s debt, that you end up being responsible for, will be wiped out. My lifetime motto is to “Press on Regardless!” Each person following the death of a loved one must Press on Regardless to do the right thing, guilt-free, for themselves and their family. Each person is entitled to a Fresh Start! Call us today at 813-308-9045.
