After a loved one passes away, a Tennessee family will be left with the responsibility of settling his or her estate. This likely includes resolving outstanding matters with creditors, a process that can be complex and confusing if the deceased had a significant amount of debt at the time of his or her passing. Paying off remaining debts associated with the estate is one of the requirements of the probate process.
What happens with different types of debt
The process of dealing with debt when settling an estate depends largely on the type of debt it is. Sometimes the beneficiaries of the estate will have to make decisions regarding what to do to settle the debt. Consider options for dealing with the following:
- Mortgage debt – If beneficiaries don’t want to assume the loan, or it is not assumable, the property may be sold in order to settle the remaining balance.
- Credit card debt – Responsibility passes to any joint borrower, if there is one. Otherwise, proceeds from the estate may be used to pay off the balance. Sometimes, balances are simply written off.
- Student loan debt – If there is no co-signer to the loan, responsibility for the loan will pass to the estate. In many cases, the balance must be paid off immediately.
Those responsible for the settling of an estate will find it helpful to have guidance as they deal with outstanding complex financial matters, such as dealing with debt left behind by a loved one.
Legal guidance important
Settling an estate and navigating the probate process can be daunting. A family will find it helpful to work with an experienced Tennessee attorney at every step, including when dealing with debt. Legal guidance can help one avoid difficulties and complications that may cost a family additional time and distress during this time.