What Happens to Your Debt When You Die?

When you die, your loved ones usually are not responsible for any debt you leave behind, but in some cases they may be. You can die with outstanding debt, such as credit card balances, mortgages, auto loans, and student loans. In most cases, the responsibility of paying your debt after you die is passed on to your estate, which consists of all of the property and assets you owned. However, a co-signer or someone with a joint account may be responsible for your debt after you die. And your spouse could be responsible for your debt after your die, depending on the state you lived in. One way to help your family pay off any debts you leave behind: life insurance.