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Will Your Children Have to Face Unpaid Creditors in the Future?


A topic that is often overlooked regards debts for people over the age of 65. If debts are large enough, who will be responsible for paying such debts after the elderly person can no longer pay them? Sources state that although assets and income are lawfully protected, creditors can wait to recover finances from the elder person’s children.

To help you understand how this process may work, our team has answered a few questions:

1. What Makes it Difficult for Creditors to Collect from Elders?

Because most elders are protected from creditors which can prohibit creditors from seizing payments for legitimate debts and assets, creditors often wait to collect compensation until after an elder passes. In most cases, a senior is protected by the following:

  • Exemption laws
  • Pension laws
  • Social Security Act

2. What Happens When Debts Survive After a Debtor Passes?

To clarify, heirs do not become personally responsible for a debtor’s debts. However, debts must be completely paid before an heir can receive anything. This means that debts are paid before an estate is touched. If a passed debtor formed a living trust, the trust will, in most cases, indicate that the successor trustee should pay the debts of the trustor first.

If property is dispersed after death without fulfilment of the decedent’s debts or probate, the distributed property remains responsible for the debts of the decedent for a specified amount of time. This interval of time varies on a state-by-state basis. Regardless, if debts outlive a debtor, the heirs cannot collect their rightful estate. In these cases, it is only a matter of time before creditors can collect assets in order to satisfy debts.

3. Can Bankruptcy Protect the Children of a Debtor?

In some cases, bankruptcy can be a solution used to protect a debtor’s children if the elderly person is suffering from serious financial debts. Filing for bankruptcy is especially useful for seniors who have assets that are protected from creditors. In addition, certain exemptions that are designed to protect these assets remain available during the bankruptcy process. Opting out of filing for bankruptcy can force creditors to collect from the estate after the elder person passes.

Considering Filing for Bankruptcy? Our Team Can Help

If you believe bankruptcy can improve yours or your children’s financial situation, get in touch with our Chicago bankruptcy lawyers at Atlas Consumer Law right away. We can examine your situation to determine which type of bankruptcy can leave you in a better financial standing. We understand the stresses associated with these types of problems, and that is why we are here. We can handle all of the complicated legal matters so you can focus on creating a happier life for yourself and your family.

To discuss your case, call our bankruptcy attorneys in Chicago! We are ready to improve your future.