 TITLE: What Happens to Your Credit File When You Die? CONTENT: Who Is Responsible for My Debt When I Die?\n------------------------------------------\nNow you know what happens to your credit file when you pass away, but what about your debts? Will your spouse be responsible for paying your bills? In most cases, the answer is no, but there are some situations where others may be responsible for your debt.\nAfter you die, any debts you owe are paid from your estate—a term that simply refers to all of the assets you owned when you died. If you had a will, the executor you named will use the money from your estate to pay any debts you left behind. If you die without a will, a judge will make decisions about how your debts will be paid and will select an administrator to execute those decisions.\nDebts are classified as _secured_ (collateral-backed loans, such as mortgages or auto loans) and _unsecured_ (debts without collateral, such as most credit card debts and student loans). In general, secured debts must be repaid or the collateral will be repossessed. If your estate doesn't have enough money to pay all your debts, debts will be prioritized for repayment, with secured debts having the highest priority. Your executor or administrator may have to sell certain assets to pay your secured debts, while unsecured debts may remain unpaid.\nYour spouse or another family member may become responsible for the following debts after you die:\n*   **Joint debts**: Any debt held jointly with your spouse will become their responsibility. This commonly includes mortgages, auto loans and lines of credit. Your spouse is also responsible for paying the balance on any joint credit card accounts, even if you, not they, incurred the charges.\n*   **Cosigned debt**: Anybody who cosigned on a loan, credit card or other debt for you becomes responsible for that debt if you die.\n*   **Home equity loan on an inherited house**: If you had an outstanding home equity loan on a house that you left to an heir, they will be responsible for repaying the loan after you die.\n*   **Timeshares**: If you owned a timeshare and put your heirs' names on the deed, they will inherit the timeshare—and the responsibility for any associated maintenance fees.\n*   **Medical debt**: Did a spouse or other family member sign documents authorizing your medical treatment? Depending on the state where you live and the wording of the documents, they may have accepted legal responsibility for any medical bills your health insurance didn't cover.\nIf you had a credit card in your name only, your spouse is not responsible for the debt. A spouse or child who was an authorized user on your credit card is not responsible for that debt, either.\nThere may be some exceptions to these rules if you live in a community property state. There are nine such states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Spouses in Alaska can choose to hold their property in common. Under community property laws, any debt that one spouse incurs is typically also the responsibility of the other. Because laws on community property may vary from one community property state to another, your heirs should consult an attorney with experience in estate law or check with your state attorney general's office to determine their obligations.\nWorried that your spouse will have to use your life insurance to pay off your debts? Don't stress. Life insurance proceeds are protected from creditors when you die, as are:\n*   **Retirement accounts**: These include employer-sponsored 401(k) or 403(b) plans, Solo 401(k)s, SEP IRAs, Simple IRAs, Roth IRAs and health savings accounts (HSAs).\n*   **Brokerage accounts**: These include any taxable investment accounts opened with a brokerage or investment firm. Brokerage accounts may invest in stocks, bonds, REITs, CDs or other investment vehicles.\n*   **Living trust**: Placing your assets in a living trust means your estate doesn't have to go through probate, a potentially costly and time-consuming court proceeding. Depending on the type of trust you choose, certain assets may also be protected from creditors after you die. END