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According to Debt.org, nearly three-quarters of Americans will die in debt. The publication bases its assertion off an Experian study, which revealed that the average American dies owing $61,554. However, if you were to eliminate mortgage debt from the equation, the average balance shrinks to $12,875, which is still a hefty amount for many families. If you recently lost a loved one who had substantial debt, you may wonder how the Tennessee courts will handle said debt. Will your family have to assume repayment responsibility?

The good news is that though you cannot take money to the grave, you can take debt. Creditors cannot hold relatives responsible for a deceased person’s debt. The exception to this is if you co-signed a loan, have joint ownership of a property or business, or are an authorized user on a credit card. That said, does a person’s debt just disappear once he or she passes away? Not necessarily.

A person’s debt becomes the responsibility of the estate once he or she dies (assuming there is one). This can cause a lot of tension between family members, especially if they expect to inherit a large sum of money or significant assets. Family members will only receive their inheritances once the executor of the estate or the trustee has paid off the deceased’s debts in full. If the estate does not have enough money, the executor may have to sell off valuable assets, such as jewelry, artwork, collections or even the home, and use the proceeds to pay off creditors.

However, legal protections do exist to protect certain assets from creditors. Though state laws vary, there are two major assets that every state exempts from collections: Life insurance policies and retirement savings. An executor may distribute these two assets to beneficiaries without regard to outstanding financial obligations.

If a creditor hopes to collect repayment through a deceased’s estate, it must submit a request to the person who is in charge of the estate within a specified timeframe. Like with exemptions, deadlines vary from state to state, but generally, a creditor has between three to six months from the time of death to request repayment. Creditors who miss the deadline forfeit their chance to recover the balance.

You should not use this article as legal advice. It is for educational purposes only.