Ohio residents may be concerned about what will happen to their debts upon their deaths. Will their surviving family members be held responsible and be exposed to creditor harassment? There is no single answer to this question, because the type of debt and the existence of a co-signer will determine what happens to it.
In Ohio, which is an equitable distribution state, a spouse will likely only be held responsible for debts on which he or she was a co-signer. This goes for credit card debt, medical bills, and any other personal debts or loans. However, creditors have the right to file claims against an estate. If such claims are filed, the executor of the estate will settle outstanding debts before assets are distributed to beneficiaries or heirs.
When it comes to a mortgage, an heir who wants to maintain ownership of the property will have to settle the outstanding amount. If this is not possible, he or she can continue making the payments, refinance the mortgage or seek a loan modification. If the decision of the heir is to sell the property, the mortgage company or lienholder will have the first right to the proceeds, and the person who inherits the property will be responsible for any taxes that may be owed on it.
Surviving family members who are victims of creditor harassment after the death of a loved one have the right to retain the services of an attorney to resolve such issues. It is not uncommon for creditors to be open to negotiation, and, in cases in which the amounts are insignificant, they may even agree to write off the debt. Regardless of the size of the debt, an experienced bankruptcy attorney can assess the details of every claim against an estate and explain the legal options which will allow him or her to move forward without the burden of inherited debts.
Source: TIME, "What Happens to My Debts When I Die?", Sarah Max, Feb. 16, 2016