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Are the Decedent’s Children Responsible for the Decedent’s Credit Card Debt?

A New York decedent’s children or other beneficiaries are not responsible for the decedent’s debts, including credit card debts, unless they were co-signers for the debt. However, the decedent’s estate might be.

All valid claims are paid out of the estate assets. The person responsible for making decisions about approving or denying claims against the decedent’s estate is the administrator or executor named in the decedent’s will. A personal representative is not responsible for personally paying the claims either.

The person in Charge of Handling Claims Against the Estate

Since there are many responsibilities that come with accepting the job of an executor or administrator, one usually hires a New York probate and estate attorney to assist with the management of the estate assets and reviewing of claims to make sure that the estate complies with the New York probate laws.

A representative could be personally liable for reimbursing the heirs or the estate for any financial losses resulting from paying the wrong claim, paying a creditor more than was owed or breaching a fiduciary duty. Having an attorney advising a personal representative protects the personal representative against liability for making mistakes.

The Process of Approving and Denying Claims  

It is up to the creditors to submit their claims within the statutory period designated under New York probate laws in order to get paid. Making decisions about paying the decedent’s debts can be complex. When an estate has more debts than assets, it is up to the personal representative, with the help of the estate’s attorney, to decide which creditors will get paid and which will receive nothing. The creditors usually end up taking whatever they can get because they know they are unable to collect from the decedent’s children or other heirs or beneficiaries.
The decedent’s children may also be affected because their inheritances may be reduced, or they may not even receive them if there is no money left.

Debts such as burial and funeral costs, taxes and court and administration fees have priority over other debts such as unsecured credit cards and must be paid first.  Secured debts such as mortgages or automobile loans are also priority debts, but they are secured by property. If there is enough equity in the property, then the personal representative may decide to sell it in order to pay off the loan balance. When there is not enough equity, the creditor can repossess the property, sell it and use the proceeds to pay it towards the loan balance. The creditor would have to write off the balance of the debt.

On occasion, an unhappy creditor may file a lawsuit against the estate because they believe that their claim was not handled in a fair manner. The matter must then be decided by the Court. The New York probate and estate attorney can represent and defend the estate in Court to fight the claim against the estate and help resolve the matter.

If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at 718-509-9774