Inherited House with Debt

UPDATED: Oct 1, 2022

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Inherited House with Debt

I inherited my mother’s house upon her passing, as stipulated in her Will. There is still a mortgage on it and a lot of debt (i.e. liens, judgments, etc.) against it. The total debts of her estate far outweigh the total assets. I have been paying the mortgage on it personally until I figure out what to do. I want to move into the house and somehow own it. How can I accomplish this without me being personally liable for the debts? I read somewhere that if I take ownership of the house get the mortgage/deed in my name then the debt transfers with the house but not me personally, and if I ever sell the house the debts would have to be paid. Is this true? I have not begun the probable process yet.

Asked on July 4, 2018 under Estate Planning, South Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You can't "transfer" the debt--that is, take over or assume the mortgage--without bank or lender approval with any mortgage that I have ever seen; mortgages from commercial lenders have "no assumption" clauses barring someone else from taking over the mortgage. Furthermore, the mortage must be paid to transfer title. So the way to take ownership of the house is to pay off the existing mortgage either in cash (if you can) or with a new mortgage (to in essence refinance it). If you can't do that, you can't take ownership--you have to eliminate the existing mortgage. The same goes for other liens--you have to pay them off to take ownerhip. You are not personally responsible for the existing debt on the house, not being a signatory to the mortgage and not being subject of the existing judgments, lients, etc.; if the various liens, mortgages, etc. exceed the equity in the home, you are far better off NOT trying to pay them down in order to own the house. Rather, stop paying these debts which you do not owe in any event and let the creditors/lenders foreclose and fight over the scapes (whatever equity there is) while you buy a new home, free and clear of other people's debts.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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