Why You Should Consult With An Estate Administration Attorney If There Are Unpaid Debts
When your loved one passes away and owes any debt, creditors will be entitled to a portion of the debt. Whenever there is a large amount of debt, you will want to consider hiring an estate administration attorney if you are a beneficiary. Doing so will increase how much you will receive in compensation.
Paying Off the Debts
Any funds that are available after the death of your loved one must be distributed to creditors to pay off any debts. After the debts have been paid off, the balance of the estate can then be sent to any remaining heirs.
When There Isn't Enough Money to Pay Off the Debts
If there are more debts than there are assets to pay off these debts, there may be no inheritance left for you to benefit from. However, you will not be responsible for paying off the debts yourself except under certain circumstances.
For example, if you cosigned a loan, you might be required to pay off what is left of the loan or you might face consequences. This can include a mortgage that both you and the deceased both cosigned or a loan that you personally guaranteed. For example, if the deceased couldn't purchase a car without you offering a personal guarantee, you may be required to pay off the loan.
If you were married to the deceased and you lived in a community property state, you might be responsible for paying for any debts that your spouse accumulated. If you are not sure if a particular debt now belongs to you, it's important to consult with an estate administration attorney.
How an Attorney Can Help
Regardless, you will likely need help from an estate administration attorney to handle debts because it will be your responsibility to notify creditors that the debtor passed away. There are many debts you might not be aware of because they might not be obvious.
For example, if your loved one was taken to the hospital by an ambulance, this may be a debt that will need to be paid. Any healthcare services or time spent at the hospital will need to be paid for.
You will also need to investigate the bills that your loved one might have had that they still owe. For example, if ex had any utility bills or if they owed money in rent, all of this would need to be paid off so you can settle the debts as inexpensively as possible.