5 lessons I learned about debt after my dad's death that everyone should know

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• My dad died in 2018, and he spent his last 13 days in the ICU — which came with a massive bill.
• Medical debt like this is one kind of unsecured debt, which goes away if it isn't covered by the estate.
• Debt collectors are legally limited in how they are allowed to seek repayment after someone dies.

When my father died of cancer in October 2018 — in a small California town named Loma Linda — we were sent a massive ICU bill in his name, exactly one week after he'd died. He had been admitted to the ICU for 13 days after nearly two years with colon cancer.

My family was still figuring out the expensive logistics of getting his body repatriated to our home country of Malawi, and the bill felt unreal. It may as well have been Monopoly money, for how real the implied stacks of banknotes actually felt. My mother and I laughed bitterly as we sat together at the dinner table, in horrified awe at the absurdity of our essentially being billed for my father's death.

The nearly 10 pages of hospital itemizations detailing the technicalities of the final 13 days of my father's life forced me to realize the intimidating extent of knowledge I did not have about how to handle the financial affairs — especially regarding debt — of the recently deceased. I was even naive enough not to be aware that someone could still be medically billed after they died. That seemed nonsensical, but it is an absolute truth of the financial realities of death in America.

Thus information and research became twin weapons in the months following my father's funeral. I knew that it would be easy for my family to be financially taken advantage of in that emotionally sensitive period, and I was determined to ensure that did not happen. As I was the only member of my family who was still a US resident, I spent several painstaking months making phone calls and mailing out copies of my father's death certificate by myself, as I closed out his American financial affairs.

In the nearly five years since Dad's death, I have seen stories both frustrating and heartbreaking about the ways in which bereaved families have not only been financially lost after a loved one's passing, but have been taken advantage of by unscrupulous companies looking to maximize their earnings by razor-thin margins of ethics and legality. Here are what I consider to be the five most important things for people to know about what they most likely do, or do not, owe debtors upon a loved one's passing.

1. Debt doesn't go away, but that doesn't necessarily mean someone has to pay it

Per the Consumer Financial Protection Bureau, a person's debts are assumed by their estate — this is simply any money and property left behind after their death — and any outstanding debts should be paid off by what remains in the person's estate. This is handled either by the executor of the estate, named in the deceased person's will, or by a government-appointed administrator if the person died without a will.

There are very limited cases where someone else — such as a spouse or parent — may be required to pay off certain debts of the deceased. In community property states, for example — where spouses share joint ownership of certain debts undertaken during their marriage — a surviving spouse may be required to pay off certain debts. Confirm state-specific requirements to ensure only what is legally owed is paid.

2. Unsecured debts generally remain the property of the deceased

Unsecured loans include most credit card debt, student loans, personal loans, and medical bills. According to Experian, these should be handled by the estate if there is any money remaining to pay those off.

Even then, whether those debts are paid off is determined by the legal order in which estate disbursements are required to be handled. If, for example, a person dies in a state where survivors are paid out first, there may be no money remaining in the estate to pay off unsecured debts. Ensure the executor or administrator of the estate confirms specific state requirements before paying.

3. Secured debts must be paid off by someone

The most common secured loans are mortgages and auto loans. If they aren't paid by the estate or by someone else, the asset backing them — the house or the car — can be claimed by the lending institution. Houses and cars often have co-signers for loans, so it's important to understand who will be responsible for that debt and what happens, especially if they plan to maintain use of them after their loved one's death. 

4. Federal student loans are discharged — private student loans usually aren't

If you die with federal student loan debt, those loans will be discharged. Private lenders, however, may still require the loan be repaid — especially in the case of certain parent-student loans, or other types of co-signed student debt. The estate administrator should contact the lending institution directly to find out what is applicable.

5. The law restricts debt collection after death

The emotional vulnerability of survivors of the deceased can, unfortunately, make them ideal targets for aggressive debt collectors intent on seeing the debts of the deceased repaid by any means necessary. The Federal Trade Commission gives detailed information on what debt collectors may and may not do in order to collect on a loved one's death, especially to protect against manipulative and potentially deceptive practices targeted at loved ones willing to do whatever they're made to believe is required to settle a debt.

Handling a loved one's debts in the wake of their passing can feel daunting and even retraumatizing. I discovered in the wake of my father's death just how bureaucratically difficult it is to make the biological fact of a loved one's death a legal one — especially regarding their debts.

My father's ICU bill was eventually written off after several letters and phone calls between myself and the hospital billing office; the last letters I wrote to the hospital were to all of his various medical teams, thanking them for their care in the worst 13 days of me and my family's lives. With that, the emotional process of moving forward could finally begin.

This article was originally published in May 2023.