What happens to debt when someone dies? What Texas law says about IOU’s

Have you ever been in a situation where someone owed you money but died before you got the money?

Or maybe a family member has died and you’re wondering if you’re responsible for their remaining bills.

Does the debt end when someone dies?

Texas law regulates how long creditors have to pay collecting debts after someone dies and who may be responsible.

Here’s what you need to know:

Accordingly Texas Legal AidDeath does not necessarily erase a person’s debt. Even after someone passes away, debt collectors may attempt to collect payment from the deceased’s estate or, in some cases, from someone who received money from the estate.

Under Texas law, most debts four year statute of limitations. This period starts from the date of default or the date of the last payment made (whichever is closest).

Debt usually does not go away until it is paid off. But the law limits how long creditors or debt collectors can take legal action to recover a debt.

These limitations, known as statutes of limitations, are designed to prevent lawsuits over old debts. Some debts, such as federal student loans, are not subject to these time limits.

According to the Consumer Financial Protection Bureau, if a debt collector sues you after the statute of limitations has passed, you can use that as a defense in court. You may also have grounds to file a lawsuit against the collector. Fair Debt Collection Practices ActProhibiting filing a lawsuit or threatening to sue due to statute-barred debts.

Statute of limitations according to JG Wentworth to start:

• On the date of your first missed payment (default).

• On the date your debt is paid off by the original creditor.

• On the date of your last payment.

The statute of limitations may expire restart if:

• Make a payment, even if it is small.

• Acknowledge your debt in writing.

• Get on a payment plan.

• Make a written promise to pay your debt.

According to the Consumer Financial Protection Bureau, if you are a surviving spouse or serving as a personal representative, executor or administrator of an estate, debt collectors may contact you about the deceased person’s debts and potential payment from the estate.

However, they cannot claim or suggest that you are personally responsible for paying these debts with your own money.

You may be liable for a debt if:

• You are a co-signer on a loan with outstanding debt.

• You have a joint credit card account.

• You are a surviving spouse and state law requires spouses to pay certain debts

• You are the executor or administrator and state law requires payments from jointly owned property

• You are a surviving spouse and live in a community property state that requires the surviving spouses to use joint property to pay off the deceased spouse’s debts. These states include Alaska (if a special agreement has been signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, TexasWashington and Wisconsin.