Debt After Death: Who Pays?Getting Paid After a Debtor Dies
Death is a fact of life that most of us choose not to think about very often. But what happens to the debts of the deceased individual? Do they die along with him? As a healthcare provider or other creditor, is there anything you can do to get paid?
Upon death, an individual’s debts become the responsibility of his estate’s executor (that is, the personal appointed to carry out the terms of the will). The executor is charged with using the deceased person’s assets to pay off both his debts and current bills. This is the process of probating an estate.
In that case, the executor must prioritize the deceased person’s debts in accordance with federal and state law. Every state has its own probate laws that direct how someone's final affairs are to be handled. This includes the priority of debt payment.
In Colorado (CSC’s home state), probate laws prioritize payment distribution as follows:
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Filing a Claim Against an Estate
The executor is responsible for notifying all creditors of the consumer’s death. Typically, executors also notify the big three credit bureaus (Experian, TransUnion and Equifax), so the account can be flagged as “Deceased: Do not issue credit.”
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