Dear Bankruptcy Adviser,
Will my kids be responsible to pay my debts after I die?
Your children are not responsible to pay your debts after you die. That is the short answer. The reason this is an important topic is that you want to be sure creditors have no reason to try and collect on your kids.
- Co-signing: You may have your child on one of your credit cards, car loans, mortgage loans or personal loans. Maybe your child had better credit than you when you applied for the loan, or maybe you were helping him or her out by using your good credit. Your son or daughter would be liable for any loan he or she co-signed.
- Authorized user: You may have added your child's name and Social Security number to one of your credit cards so that he or she could use the card. This arrangement does not impose liability on your child because he or she is an authorized user. The creditor may make an attempt to collect on your kid after you die only because he or she is on the loan. The creditor may even try to sue to collect. You need to take your child off any account if your death is imminent. Don't compound your child's grief by also making him or her battle creditors to dispute liability.
- Same name, different person: This situation is very common when a father and son have the same name and the father's account appears on the son's credit report. The Social Security numbers are different, but creditors can still aggressively -- and illegally -- try to collect from Junior for Senior's debts.
- Unauthorized accounts: It is always heartbreaking to see a parent with bad credit use his or her child's good credit to get loans. Many times, the parent opened the account when the child was a minor. While the child can prove that he or she never opened the card, the cost could be quite high. Even worse, the child only learns of the account when it is delinquent and the creditor is calling or suing for payment.
It is one thing to leave your children with memories of your time together and quite another to leave them with a nightmare of your own creation. Try not to be a burden on your kids long after you are gone.
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