Parents' Debt After Death: Who is Responsible? | Borowitz & Clark

Parents’ Debt After Death: Who is Responsible?

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Table of Contents
  1. Exceptions to the Parents’ Debt Rule
  2. What is filial responsibility in California? How does it affect my parents’ estate?
  3. Beware Unsavory Debt Collectors
  4. Need Help with Your Parents’ Debt?

The death of a parent is one of the most difficult things we must deal with in life. Along with the emotional burden, there are financial issues to be sorted. A common question is whether or not surviving children must pay their parents’ debts.

Generally speaking, no, you do not have to pay your parents’ debts when they die. But just because creditors cannot hold you responsible for your deceased parent’s debts does not mean those debts will not affect you.

Before the deceased’s estate can be distributed, its assets will be used to pay creditors. Heirs stand at the end of the line, so debts owed by your parent will diminish your inheritance.

Exceptions to the Parents’ Debt Rule

The reason you cannot be held responsible for your parents’ debts in most circumstances is because there is no contractual agreement between you and your parents’ creditors. Of course, if you contractually agreed to pay the debt, that is a different matter. Therefore, you are responsible if

  • You cosigned for a parent’s debt;
  • You held a joint credit card with your parent. An authorized user is not the same as a joint credit card holder.

You should also know that California has a filial responsibility law on the books. According to California Family Code § 4400, “Except as otherwise provided by law, an adult child shall, to the extent of his or her ability, support a parent who is in need and unable to maintain himself or herself by work.”

See also: My Cosigner Filed Bankruptcy. Now What?

What is filial responsibility in California? How does it affect my parents’ estate?

At face value, this law could be interpreted to mean you must pay your parents’ debts. That is not the case in reality. Here’s why:

  • Filial responsibility laws were not meant to protect creditors, but to protect elderly parents. It is highly unusual that a court would permit a creditor to sue under color of a filial responsibility law.
  • Most elderly people who can’t pay for their medical or nursing home bills get assistance through Medicaid. Rarely do people accumulate much debt for their care before they qualify for Medicaid.
  • California has another law that is in direct opposition to California Family Code § 4400. Welfare and Institutions Code § 12350 states:

“No relative shall be held legally liable to support or to contribute to the support of any applicant for or recipient of aid under this chapter. No relative shall be held liable to defray in whole or in part the cost of any medical care or hospital care or other service rendered to the recipient pursuant to any provision of this code if he is an applicant for or a recipient of aid under this chapter at the time such medical care or hospital care or other service is rendered.

“Notwithstanding Sections 3910, 4400, and 4401 of the Family Code, or Section 270c of the Penal Code, or any other provision of this code, no demand shall be made upon any relative to support or contribute toward the support of any applicant for or recipient of aid under this chapter. No county or city and county or officer or employee thereof shall threaten any such relative with any legal action against him by or in behalf of the county or city and county or with any penalty whatsoever.”

With all that said, it surprised the legal community a few years ago when a Pennsylvania court interpreted a filial responsibility law to mean it could hold John Pittas responsible for his mother’s nursing home bills. In that case, the mother made just enough money that she did not qualify for Medicaid, accrued close to $100,000 in nursing home bills, and then left the country.

See also: Bankruptcy Has a Surprising Benefit for Seniors: Estate Planning

Beware Unsavory Debt Collectors

Even if you are not responsible for your parent’s debt, that may not stop a debt collector from illegally trying to collect from you. You are protected by the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt. If debt collectors want to discuss your parent’s debt, they must contact the executor of your parent’s estate. They can contact you in order to try to locate the executor, but they may not do so repeatedly.

If you are the executor, you can get debt collectors to stop contacting you by sending a letter stating you do not want them to contact you again. Send it by certified mail with return receipt and keep a copy so you can prove the letter was sent and when you sent it.

Sending the letter has no impact on whether or not the debt is owed. However, an estate executor may be able to negotiate with debt collectors for credit card companies and thus reduce the amount the estate owes; credit card debt is low-priority and among the last debts that will be paid.

Need Help with Your Parents’ Debt?

If your parent died with a great deal of debt and you are concerned either about debt collectors coming after you or how that debt may affect your inheritance, call our office immediately for help. Borowitz & Clark has seven convenient locations in the Los Angeles area and offer free consultations.

While we have helped thousands get out of debt through filing for bankruptcy, we also offer debt negotiation services and can deal with lenders for you. Check out our experience, then call us toll-free at (877) 393-6309.

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