What Happens to Your Spouse’s Debt When They Pass Away?

When your spouse passes away, it can be overwhelming to figure out what you need to do next. Once funeral services are taken care of and the other most pressing matters are done, it’s time to move on to a variety of logistical things behind the scenes. For example, how is their estate going to be distributed? One such matter that needs to be taken care of is debt. In the state of Maryland, what happens to your spouse’s debt when they pass away?

Is Debt Inherited?

Your debt will only be inherited by family members or a spouse if they are cosigners on the debt. Instead of them, your estate will inherit the debt. This debt will need to be paid off before any remaining assets can be distributed during the probate process. Maryland is not a community property state, so no spouse can inherit debt if it is not shared.

What Will Happen to Student Loan Debt or Credit Card Debt?

When the estate is in probate, credit card companies and other creditors can file for repayment. In the event that the value of the estate is lower than the total debt that the deceased owns, the estate is considered to be insolvent. Depending on the priority of each type of debt, multiple creditors may never be repaid. It is not your responsibility to repay them, and you should not offer to do so. The state of Maryland ranks some creditors over others, with the IRS and the attorney for your estate near the top.

What About Medical Bills?

Providing that you did not sign onto any agreement for the healthcare treatment or medical bills, you are not responsible for paying medical expenses after your spouse has passed away. Debt collectors may try to ask you to pay for it, but it is critical that you understand you are not liable for hospital or hospice bills that you personally did not agree to pay for.

What About Unmarried Couples Who Live Together?

Spousal debt laws only apply to spouses, so unmarried couples who live together are not subject to them. Under state law, you are not liable for any debt that your partner incurred. If you have a domestic partnership agreement in place, you may be liable for debts incurred jointly but not responsible for any debts incurred individually.

Contact Mobley & Brown, LLP for Help With Your Estate Planning Case

When your loved one has passed away and you aren’t sure where to turn, you need the right legal assistance. Our experienced legal team is looking forward to working with you to meet your needs. Call us now at (410) 385-0398.