Millions of Americans struggle with debt each year. By the time of their deaths, most of this debt will not be paid. So, what happens to unpaid debts after death and who is responsible for it?

In Pennsylvania, your estate is still required to pay your financial obligations, whether you have a Will or not. One clear benefit of having a Will is the ability to name an executor who can receive formal claims against your estate from your creditors. Your executor can then pay valid debts or dispute invalid claims. Creditors will be put on notice after letters have been granted to an executor. Once they are given notice, creditors will have one year from the date of death to file a claim against the estate. If the creditor does not notify the executor of their claims after the deadline passes, the creditor’s claims will be unenforceable. Also, if there is not enough assets in the estate to completely pay off all of the validated debts, your creditors will have to settle for a lesser payment, or in some cases, no payment at all.

If you do not have a Will because you heard that it’s “better to avoid probate” (um, why?). Think again. If you don’t have enough assets to pay off your debts, any asset that is not probated can be claimed by your creditors after death. Furthermore, if the non-probated asset has already been transferred to a relative after death, your creditors can still collect from that relative. Also, in the case of non-probated assets, creditors are usually not notified of the date of death and could attempt to collect at any time in the future.

Lastly, if you die without a will and no one in your family has filed for or been granted letters of administration for your estate, your creditors can file a petition to be granted letters of administration with the Register of Wills to probate your estate and collect their payments. If you have any debt, it is advisable that you speak with an estate planning attorney concerning your assets and figure out what effects your debt could have on your estate.