(CNN) – If your parents pass away before paying off their debts, what happens to the debt? Creditors may come after the children, but that’s not always the case.
For adult children, the death of parent is an experience that carries many costs, emotional and otherwise. The most unwelcome is if mom or dad left behind large debts.
But who is responsible? Usually the estate is. But it all depends on the kind of debt.
If your parents left behind credit card debt, it’s usually not your problem. However, debt collectors may try to convince you otherwise. They can only collect if you co-signed or are executor.
For medical debt, it all depends on if your parents had Medicaid or not. If they did, the state can recover all payments. But most are willing to negotiate, and can’t collect if there’s a surviving spouse or adult child in the house. If they didn’t, the estate is responsible. But check state laws.
30 states require children to pay unpaid medical bills. If you inherited a house with mortgage debt, you don’t have to pay it off immediately. But if the mortgage is worth more than the house, look into short sales or foreclosure. Either way, you don’t have to pay the bank the difference.
Creditors have 2-6 months to make claims, but can’t ask for your personal assets. However, any money left behind will be used to cover debt before being passed along.