US Legal Forms
Legal Resources
Questions & Answers
Debts and Credit
Am I responsible for my husband's business line of credit debt after his death?

Am I responsible for my husband's business line of credit debt after his death?

Q: Can you inherit a line of credit?

You cannot inherit a line of credit itself, as it is a financial obligation of the deceased. However, if there are assets in the estate, those may be used to settle the line of credit debt. If the estate is insolvent, surviving family members are typically not liable for the debt unless they were co-signers.

Q: What happens to a business loan when someone dies?

When a business owner dies, any business loans they took out become part of their estate. The executor is responsible for addressing these debts. If the estate has sufficient assets, the loan can be paid off. If not, the debt may remain unpaid, and surviving family members are generally not liable unless they co-signed.

Q: What happens to a business credit card when someone dies?

A business credit card in the name of a deceased individual typically becomes part of the estate. The executor will handle the debt using the estate's assets. If there are insufficient funds, the debt may not be paid, and surviving family members are usually not responsible unless they were co-signers or authorized users.

Full question:

My husband took out a business line of credit for his company. He died in February and I was told by the bank that since my name is not on the loan document and the loan was an unsecured loan, that I am not responsible for payment . still receiving bills for payment. I have already sent them a death certificate to prove my husband's death at their request. I am still responsible for this debt?

Category: Debts and Credit
Date: 04/07/2025
State: Florida

Answer:

Generally, a spouse is not liable for the debts of the other if the debt is in the deceased's name only and the surviving spouse is not a co-signer, guarantor, or authorized user. This is true unless you live in a community property state, where some assets may be at risk even if the debt is solely in one spouse's name.

The executor of your husband's estate is responsible for settling his debts using the estate's assets. If there are insufficient funds or assets, unsecured debts, like credit card bills, may not be paid. You are not responsible for your husband's unsecured debt unless you were involved in the debt as a co-signer or guarantor.

If your husband had no assets or money at the time of his death, the estate may not be able to pay the creditors. In this case, you would not be liable for the debt. However, if you inherit property that is collateral for a debt, that debt would come with the property.

It’s important to communicate with the bank and clarify your non-responsibility for the debt, especially since you have provided a death certificate. If issues persist, consider seeking legal advice.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What debts are not forgiven upon death?

Certain debts are not forgiven upon death, including secured debts like mortgages and auto loans, where the property can be repossessed. Additionally, federal student loans may be discharged, but private student loans might not be. If the deceased had co-signers, the co-signers remain responsible for the debt. Unsecured debts, like credit card bills, may not be paid if the estate lacks sufficient assets.

What happens to a line of credit when someone dies?

When someone dies, a line of credit in their name typically becomes part of their estate. If the estate has sufficient assets, the executor may pay off the debt. However, if the estate lacks funds, unsecured debts like lines of credit may not be paid, and surviving family members are generally not responsible unless they co-signed.

Can you inherit a line of credit?

How long can creditors pursue a debt after death?

Creditors can typically pursue debts for a limited time after death, which varies by state. The estate must be settled within a certain period, often ranging from a few months to a few years, depending on state laws. If the estate is insolvent, creditors may not receive payment. It's important to consult state-specific laws for exact time frames.