If my father co-purchased a vehicle with someone then passed away, who is responsible for the debt – the co-buyer or my father’s estate?

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If my father co-purchased a vehicle with someone then passed away, who is responsible for the debt – the co-buyer or my father’s estate?

It is my understanding that joint property passes outside of probate. I am getting mixed answers from the finance company. They initially told me that the co-buyer is legally responsible for the debt. They then turned around and conference called me with the co-buyer to “shake me down” for payment (I am the executor of the estate). I felt really uncomfortable after this call.

Asked on January 18, 2013 under Estate Planning, New York

Answers:

Catherine Blackburn / Blackburn Law Firm

Answered 8 years ago | Contributor

Title to the vehicle is different from liability on the debt (loan).  Even if title to the vehicle passed to the co-owner upon your father's death, the debt/loan remains.  If your father signed on the loan, he and now his estate, is liable for the debt.  If two people were on the loan, then both are responsible but the finance company can go after either one or both. 

I suggest you discuss this with the lawyer for the estate.  The lawyer actually represents you, the executor.  If the estate has assets, you may be able to negotiate a reduced amount to pay off this loan.  After all, if the estate objects to the finance company's claim, the finance company will have to litigate its claim and that will cost money.  If the estate has no assets, then you don't care anyway.  You are not personally responsible for this debt.


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