When closing a Texas resident’s estate, there are many financial issues that need addressing. For instance, if an individual had outstanding debt, the executor of the estate would need to handle that debt during the probate process. The payment of outstanding balances does depend on the type of debt.
During probate, most debts will have an order of priority that will need to be followed. Some unsecured debts, like credit card debt, rank lower than secured debt, and as a result, unsecured debt that does not have a co-signer may not be paid in full. However, if a person wanted to leave a home or vehicle to a surviving loved one and there was still a balance on the mortgage or vehicle loan, the heir would need to take over those payments, if possible.
If an individual dies and had jointly-held debt or there was a co-signer associated with an outstanding balance, a co-borrower or co-signer would likely have the obligation of handling the remaining debt. For debt with a co-signer, creditors may only try to obtain money from the co-signer if the estate did not have enough money to pay off the remaining balance. However, certain details of any loan’s terms could impact this situation.
It is wise for individuals handling a deceased loved one’s final affairs — especially executors — to understand how to properly pay remaining balances. Some creditors may attempt to take advantages of unknowing parties in efforts to obtain payment. In hopes of avoiding this type of situation, individuals handling Texas estates may wish to obtain assistance from experienced probate attorneys.