Legal Question in Credit and Debt Law in California
Passing on Debt
Please tell me what the law states about a single person who ownes nothing that has a lot of debt. Is there any threat to their family or next of kin if they were to die. Is the family responsible for any of the debt that was accumulated (car loan, Macys ect) Who or what will the creditors collect from ?
2 Answers from Attorneys
Re: Passing on Debt
Regarding a car loan, they can reclaim the car. Other than that, there in no liability that would pass on to a family member, other than a spouse. Debts of one spouse are generally the debt of both.
Re: Passing on Debt
If someone dies heavily in debt, with or without a will, what happens depends on if there is any property to be transferred. If there is, the case goes into probate, and the creditors make claims and what is left is transferred to heirs, if any (after the court takes their cut).
With property that is secured, like a house or car, the loan is defaulted if payments are not current, giving the owners of the loan the right to take property back.
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