OHIO HEIRS MAY NOT BE RESPONSIBLE FOR CREDIT CARD DEBT

In some cases, when someone passes away, along with assets and property left over for heirs, there are also debts. Once someone dies, things like credit card debt might not pass on to their heirs.

When a person dies, their estate is composed of their assets and debts, and before assets can be distributed to an individual's heirs, debts must be settled. This could mean that a friend or family member gets a much smaller inheritance than they were expecting or none at all. In most cases, the estate is the only entity responsible for settling someone's debt.

The exceptions to this are if a person has cosigned on a loan or credit card or if they are living in a community property state, which Ohio is not. In those cases, an individual may be responsible for their spouse's debt irrespective of if their name is on the debt. Another rare exception is when a child living in a state with filial responsibility laws is required to pay off unpaid long-term care costs, but it is very uncommon for these laws to be used.

If someone is in debt, they may be tempted to ignore it and avoid using credit. However, failing to deal with debt can have long term impacts even after someone passes away. Filing for bankruptcy may be able to eliminate people's unsecured debt or enable them to reorganize what they owe and make getting out of debt possible. A bankruptcy attorney could guide an individual through the bankruptcy process as well as assist them in determining which type of filing best fits their situation.

Source: The Motley Fool, "What Happens to Credit Card Debt When Someone Dies", Peter Andrew, July 19, 2014