If you have a client or customer who owes you money, and they pass away, you might consider contacting their heirs to ask them to pay back the debt. You are sorry for their loss, but you could still be looking at thousands of dollars in debt that needs to be repaid, and you’re not sure where else to turn to get it.
But are you allowed to do this? Are they obligated to pay? Or is that debt simply erased when the person passes away?
Their estate can help cover debts
The heirs typically have absolutely no obligation to pay you back, and you cannot ask them to do so, as it is not their responsibility. However, there are some exceptions, such as if an heir co-signed for the debt with their parents. In that case, the debt is partly theirs.
However, not all debts disappear on death, and the deceased’s estate may need to pay back some of their debts after they pass away. This is the job of the estate executor, who has to handle outstanding debts and taxes. Even if applicable, you may not receive the total amount if the estate doesn’t have enough assets to pay off everything the deceased owed. Yet, neither can the heirs take the financial assets from that estate and refuse to use them to pay off the debt. The executor must settle eligible debts before distributing what remains.
These types of things can get very complicated, and it can even get contentious if the heirs feel that they shouldn’t have to use the money from the estate to pay you. Be sure you understand all of your legal options at this time.