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Debts might pass to surviving family members

Debt frequently outlives its Kentucky owners, and, in some situations, the surviving family members might need to make payments before collecting any assets from a decedent's estate. December 2016 data provided by the credit bureau Experian shows that nearly three-quarters of people who die had some form of debt. The average outstanding balance equaled $61,554, which included home loans. When mortgages were excluded, the remaining average balance was $12,875. Most of that figure arose from credit card debts, followed by automobile, personal and student loans.

The estate of a decedent debtor must first pay the creditors before passing the remaining assets to beneficiaries. When an estate cannot cover debts or a living person has co-signed on a loan for the decedent, a survivor might become responsible for payments.

Debts might also pass to a family if the home that they live in still has a mortgage on it or the decedent had a high level of credit card bills. The family in the home might need to sell the property to pay off the mortgage and other debts. Student loans obtained through private lenders also remain active after the debtor dies, and the lenders can pursue repayment from the estate.

A person concerned about mounting debts and how they might affect family members could investigate options for debt management with an attorney. There are a variety of tools that may be available for handling excessive credit card debt, which could include consolidation. In some cases, filing for Chapter 7 bankruptcy might be an alternative if nothing else seems to be applicable or effective.

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