if my father passed away, what happens to loans that are in his name?

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if my father passed away, what happens to loans that are in his name?

A few months before he got a personal loan to consolidate his girlfriend’s credit card bills. She was making the monthly payments but the loan was in his name. Now that he passed what happens with the loan? Who is responsible for paying it?

Asked on May 21, 2014 under Estate Planning, Pennsylvania

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

I am so sorry for your loss.  Unfortunately the estate of your Father is responsible for the loan as it is a debt in his name at the time of his death.  Unless he had a separate agreement with his girlfriend to pay him (a loan agreement of some sort between them and in writing) the estate may be obligated to pay the loan from its assets.  The requirement that the agreement be in writing is known as the statute of frauds but I would seek out the help of an attorney and run through that facts under Pennsylvania law to see if the facts can take it out of the statute of frauds (i.e., finding an exception under state law).  Good luck.


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