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What happens to your debt after death?

Don Knapp, Esq.

Individuals mindful of the thought of death worry about what they can and cannot take with them when they pass. Although it is not usually the first topic on the list, it definitely produces a curious question.

According to data provided to, 73% of consumers had outstanding debt when they were reported dead. On average, the total balance of debt amongst this group was $61,554, including credit card balances, mortgage debt, auto loans, personal loans, and student loans.

Does this debt follow you to the grave?

The short answer is yes, but your debt will affect the people you leave behind.

The debt belongs to the deceased individual or that person's estate. If there are enough assets in the estate to cover the debt, the creditors get paid, but, if there aren't enough assets, creditors lose out.

Although some people worry that the family members of the deceased are responsible for the debt, it is simply not the case. However, family members may lose inheritance because of the debt of the deceased. If there are many people that depend on the deceased for their welfare, the debt could cause a much larger problem than imagined.

The best way to avoid the problem of debt after death is also the most obvious; get out and stay out of debt before death. Meeting with an estate planning attorney will maximize your inheritance. This way, you can provide more to your beneficiaries as well as divide the assets at your own discretion.

If you need help estate planning, contact Don Knapp at (248) 912-3213 or [email protected] Don has the experience necessary to take care of your estate and your loved ones.

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