Accruing debt is a typical part of life for most Colorado residents. While it does not necessarily mean that a person is bad with finances, it could mean that a person has unpaid balances at the time of his or her passing. Because this is a likely outcome, the executor of the state will need to address those debts during the probate process.
In some cases, another person could end up responsible for the debt of a deceased individual. For example, if a loved one co-signed a loan with the now deceased person, that loved one could become solely responsible for the remaining balance. In cases where no specific surviving person is liable for the debt, payment for the balances will come directly from the remaining funds and assets of the estate.
Some common debts that an executor may have to handle include the following:
- Mortgage debt
- Credit card debt
- Student loan debt
- Medical bills
- Auto loan debt
In some cases, such as with student loans, the debt may be forgiven after the person’s passing. However, other loans will need to be prioritized and paid out of the estate’s assets. It is possible that an estate will not have enough assets to cover all the remaining debts, but it is important to remember that the executor will not become personally liable for those unpaid balances unless he or she distributed estate assets to heirs or beneficiaries early or if some other mistake on the executor’s part led to issues with remaining debt. Fortunately, Colorado executors can have help throughout probate to better ensure that they handle all matters appropriately.