Here's how unpaid debts are handled when a person passes away

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Here's how unpaid debts are handled when a person passes away
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Several factors determine how unpaid obligations are treated at death, including the type of debt and whose name is on it, as well as applicable state laws.

In fact, a person could pass away with an insolvent estate — that is, one lacking the means to pay off its liabilities — and yet have passed on assets that didn't go through probate and generally can't be touched by creditors.have "community property" laws, which make debt at death a bit more complex.

"Debt that couldn't have been avoided during the marriage — like medical expenses or a mortgage — generally becomes the responsibility of the surviving spouse in community property states," said CFP Bill Simonet, principal advisor at Simonet Financial Group in Kyle, Texas."A well-structured letter with a copy of the death certificate can lead to debt being discharged," Simonet said.

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