What happens to a debt after a borrower dies? Can lenders or debt collectors ask you to pay off a loan for a family member that has passed away?
If you applied for the loan, either jointly or as a co-signer, lenders can try to collect from you. Because they considered your credit and income when making the loan, you're responsible for repayment. This can be especially bad news after the loss of a loved one.
However, you're not responsible if you weren't involved with the loan application -- but sometimes you'll be asked to pay anyway. Debt collectors are increasingly calling relatives of deceased borrowers and requesting payments.
If you didn't sign, you don't have to pay. In most cases the debt becomes an obligation of the deceased's estate. If there are enough assets available in the estate, lenders can try to collect what is owed, but they can't force anybody else to pay.
Further reading:
- Basics of Co-Signing Loans
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