Their unpaid student loans, their credit card bills, the phone bills, bank loans, stuff like that. Do relatives have to pay it? Do they disappear when they find out the person died?
I feel like I should know this, but I don’t. :o
In California, when someone dies, their estate goes through probate. Probate is a process by which creditors can make claims against the estate to collect unpaid bills, etc. If the estate was worth less than $60,000, then it is exempt from probate, meaning that creditors are out of luck. Also, there are assets that are considered probate-exempt, such as annuities.
Not sure about taxes, and I only know this from having completely screwed up the process. IANAL, etc.
It’s similar in North Carolina, although I cannot say what the minimum is. My father died in NC last year, so we went through the probate process.
If I remember correctly, student loans over here in the UK are cancelled on death.
Companies just give up on collecting debt when the debtor is deceased. (Unless it’s a massive amount of money like 100,000 or more).
Car loans, $20,000 credit card bills, etc. are just written off. Of course, family members of the deceased often pay them with the estate, but collection attempts aren’t made on unsecured debt. Since there isn’t any credit to ruin, there isn’t any reason for the family to pay - financially speaking.
The estate but not the heirs are liable.
Take two men, each of whom dies leaving a wife and two kids, with a will leaving half his estate to his wife and the remainder divided evenly between the kids.
Man #1 dies with debts of $10,000 and an estate of $150,000. His estate pays off the $10,000, leaving $140,000. His wife gets $70,000 and each kid $35,000.
Man #2 dies with debts of $10,000 and an estate only worth $8,000. The $8,000 is split proportionately among his creditors, and they have to write off the other $2,000 they collectively are owed by him. The wife and kids get nothing from the estate, of course, but they aren’t responsible for the other $2,000.
Of course if the bank loan is secured by a mortgage, the bank will have a lien on the land. That goes for any loan that is secured, either by a real estate mortgage or a chattel mortgage.
Sorry to disagree, but they most certainly don’t give up. After my father died, and after my wife’s mother died, we continued to get bills for months. They clearly expected to be paid out of the estates.
Another thing to remember is, it might not be just the deceased’s debt. If the debt is on a joint account (credit card, mortgage, car loan, etc.) the other person(s) on the account are responsible for it. If the debt was incurred on behalf of a partnership, company or trust, that entity is responsible for it.
If the person that dies is a resident of a community property state, the spouse will be liable for the debts even if the debt was not in their name. And the $60,000 limit mentioned above does not apply if real estate is involved. And life insurance proceeds are not considered part of the estate and do not have to be used to pay any of the deceased debts. If the deceased owes any state and federal taxes, these will be paid in full first, the other creditors get anything that is left. Most everything has been covered.
Thank you all very much. 
I would like to add that some institutions like credit unions have the philosophy “the debt dies with the debtor” and carry life insurance on their loans that will pay them off if the member dies.
Credit card companies certainly do not give up, even when it was their mistake. After my dad died, my mom paid off the bills, including a credit card. Three or four years later, along came a collections agency trying to get the balance of the card she’d paid off out of HER – and they hadn’t been married for years at the time of his death. It took a huge amount of hassle to get them to go away.