Can I be held liable for any money owed on my decreased mother’s car?
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Can I be held liable for any money owed on my decreased mother’s car?
I reported her death to the loaning bank; they want to short sell the car and make me pay the difference. I am afraid they will sell this $30,000 car for $5,000 and stick me with the tab. Her name was the only name on the loan. There is an estate, but not much. I am one of 3 surviving children to which her assets fall.
Asked on November 23, 2010 under Estate Planning, Colorado
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If you are a co-signer on the loan then you would be liable for any shortfall. If you are not a co-signer or in any other way legally responsible for repayment than you do not have to pay. Children do not inherit debt. However, this does not mean the your mother's creditor has no recourse. Before any assets can be distributed to beneficiaries/heirs, all known debts must be paid by the executor/personal administrator. Therefore, assets in the estate will be sold to pay for any debts that remain. Only after the debts are paid will the remaining assets be distributed to beneficiaries/heirs.
Note: If there are no assets in the estate, or not enough to pay all debts, then the debt (or prtion remaining unpoaid) extinguishes as a matter of law.
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