Start My Answer
loading...

Am I Responsible for My Parent's Debt if I Have Power of Attorney?

George Simons | October 19, 2022

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Did your parents manage to run up a great deal of debt? Find out if you're responsible for your parent's debt if you have power of attorney.

A power of attorney grants you the responsibility to make important decisions on behalf of your parents if they're incapacitated or can no longer manage their affairs. So if you're wondering whether you're responsible for your parent's debt because you have power of attorney, this article explains everything you need to know.

But first things first, lets first look at the various responsibilities of power of attorney. Some of your power of attorney responsibilities include:

  • acting in good faith for the principal's (your parent) benefit;
  • managing your parent's real estate, investments, and bank accounts;
  • keeping track of all transactions involving your parent's property;
  • determining if they have a will and contents of the will;
  • using your parent's assets to support their needs;
  • consulting with other family members regarding important decisions concerning your parents.

If you have a power of attorney and breach any of your duties, you may be liable for the consequential damages.

File a response to a debt collection lawsuit fast with SoloSuit.

Are you responsible for your parents debt?

If you're the agent of your parent's power of attorney, you're not responsible for their debt. However, if they become incapacitated, you can use their assets to pay off their debt and not use your own money.

In the unfortunate event that your parent passes away, the existing power of attorney becomes invalid. In such a situation, the administrator or person in charge of your parent's financial assets will be responsible for paying off your parent's debts.

Note that even if you're not responsible for your parent's debt, your inheritance might be affected if some of their assets are used to pay off the debts. This is because you can only receive your inheritance after assets in your parent's estate have been used to clear their unpaid debts.

There are also a few exceptions to becoming responsible for your parent's debt. These include:

  • You were a co-signer of a loan your parents took. If you cosigned a loan or jointly took a loan with your parents, you'll be responsible for the outstanding balance. Even when your parents die, you'll still be responsible for the debt. The debt will be considered valid and transferred to your name.
  • You have a joint account with your parent. Suppose you opened an account with your parents and used it to secure a loan. In that case, the debt will still be valid even if your parent becomes incapacitated or dies.
  • You're the administrator of your parent's estate. If your parents named you as their estate administrator on their will and they die without paying their debt, you'll be responsible for their debts. This includes medical expenses, back taxes, funds due to employees, funeral bills, and so on. However, if the estate can't cover your parent's debts, you'll not be held responsible for any of their debt.
  • Your parent's assets are transferred to you shortly before they die. If your parents have many debts under their name and transfer their assets to you before they die to avoid paying the debts, you may be responsible for their debts even if their assets are in your name. A court can invalidate the transfer of your parent's assets to you if there's valid proof that your parent made the transfer with the intent to avoid paying their creditors.
  • You mismanaged your parent's estate. Even though you can't inherit your parent's debts, you'll be responsible for paying their outstanding debt if you mismanage their estate. If left in charge of your parent's estate, it's upon you to decide how to pay your parent's creditors. Mismanaging estate assets or paying off the wrong debts can make you liable for your parent's debt.

Use SoloSuit to respond to a debt collection lawsuit in 15 minutes.

What should you do if debt collectors contact you?

If your parent dies and you didn't co-sign for their debt, debt collectors are prohibited by the Fair Debt Collection Practices Act (FDCPA) from contacting you about the debt. The FDCPA is the main federal regulation that governs the various debt collection practices in the US.

You can send them a cease-and-desist letter requesting that they stop contacting you if they constantly harass you for your deceased parent's debt. Alternatively, if they keep harassing you and you feel they're violating the FDCPA, you can file a lawsuit against them.

Suppose your parent dies and has funds in their IRA or 401k account, and you're the designated beneficiary. In that case, the funds will be passed directly to you and won't be used to pay off their outstanding debt.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

How to resolve student loan debt

Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started


Contents