Will My Kids Have to Pay off My Debt When I Die? - Westgate Law

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Will My Kids Have to Pay off My Debt When I Die?

There’s comes a time in everyone’s life when they consider the possibility of their death. When this time comes some are thinking about things they still want to do while others are thinking of tasks left undone. Some think of places they still want to go and things they still want to do. And sadly, today’s credit driven economy is leaving many in this moment considering whether or not their children will be held responsible for paying off their debt when they die.

Are Your Children Responsible for Paying Off Your Debt When You Die?

Let’s start with the short answer. For some of you this is all you’ll need because you’re not overly worried, you’re just curious.

The Short Answer: No, your children are not responsible for paying off your debts after you die.

And now you can read on for the long answer. Firstly, why is this topic important? One reason this topic is important is because you want to make sure that your creditors do not have any reason to attempt to collect your debts from your children after your death. What are some reasons that could lead your creditors to collect your debt from your children after your death?

  1. Cosigning
  2. Authorized Users
  3. Matching Names
  4. Unauthorized Accounts

Cosigning – Some parents, throughout the course of their children’s lives, end up in needing assistance getting approved for a loan (i.e. mortgage, auto loan, credit card, personal line of credit, etc.) Maybe you had a few really rough years financially and at that point in time, your child had a much better credit score than you. In this case, they may have cosigned for you.

Authorized User – Some parents will add a child to their credit account as an authorized user. In many instances it is as a convenience; so they can run an errand on your behalf, etc. Others do so as a favor for their child; maybe for spending money during a tough semester of college, etc. While this doesn’t technically generate any liability for the child using the card, it does mean adding their name and social security number to the account, which can lead to “confusion” after you’re gone. If you have children listed as authorized users on your accounts and you fear this type of situation, remove them to avoid the worst-case scenario completely.

Same Names – Many families will name a child after a parent as a tradition or in respect for the family line. This is a time honored tradition, but sadly, it can cause problems for the child whose name matches yours if you pass away leaving a lot of debt in their, I mean your, name. You may be able to address this problem, at least in part, by checking credit reports frequently and making corrections quickly when accounts are reported inaccurately due to different family members having the same name.

Unauthorized Accounts – This is my personal least favorite because it’s heartbreaking for children to discover after a parent’s death, but it happens. Some parents find themselves in a situation that leads them to use their child’s social security number/name to obtain credit without their permission. In many cases, they create the accounts when the child is still a minor. This situation can easily turn into a nightmare.

If you have questions regarding how your debt will affect your children’s lives after your passing, please get in touch with the southern California bankruptcy lawyers at Westgate Law today.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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