In Golden, Wheat Ridge, and Arvada, having a good estate plan in place can head off a lot of potential probate issues for loved ones left behind. Often, people wonder what happens with debt after a loved one passes away. Debt is generally handled through probate, where the estate will pay off the debt before distributing any assets. If the estate does not have the funds to cover the debt, then the creditor will have to write it off. Luckily, family members do not inherit debt. There are, however, a few exceptions to this. Let's look at those exceptions.
Joint Credit Card Debt in Wheat Ridge Probate Cases
If one spouse dies, and the surviving spouse is listed as jointly on the account, then the spouse is still responsible to pay the debt. Now, there is an important distinction here. If the surviving spouse is simply an authorized user on the credit card account, they are not required to pay the debt. Joint account holders are those who co-signed on the credit card account. In the co-signed cases, the surviving spouse keeps the debt - it is not wiped out because of the debt.
Arvada Student Loan Debt and Probate
It's not uncommon for a parent to co-sign on a private student loan when their child decides to go for their professional or graduate degree. In fact, most private school loans require a co-signer. So, if something happens where a child passes away with this outstanding debt, the debt will not be forgiven. Sometimes, the lender will request the debt payment through the estate. If the estate does not cover the debt, then to co-signer or co-signers can be held responsible for the full amount remaining.