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What Debts are Forgiven When You Die in Wisconsin?

Everyone accumulates some debts as they go through life. While you may do your best to pay what you owe, you may have some debts that remain after you pass away. There are many different kinds of debt, such as credit cards, loans, mortgages, student debt, and more. You may wonder what debts are forgiven when you die in Wisconsin. The answer depends on the type of debt and whether you have heirs.

Types of Debt

Different types of debt are handled differently after death. When you take out a loan or incur a bill while you are married, it is generally considered marital debt. This means that both spouses are responsible for the debt. In the event that one spouse passes away, marital debt is still owed by the remaining partner. If you take out a loan with a co-signer, the person who co-signed is still responsible for the loan, even after you die.


A mortgage is a type of loan that is made to one or more people. If there is a co-signer on the mortgage, that party is still responsible for the loan if the other person dies. If the mortgage is only in the name of the deceased, the loan does not have to be repaid. However, the bank would then be able to reclaim the property due to default. When the heirs want to keep the home or sell it, they will need to repay the remainder of the loan. This can be done with proceeds from the estate, such as life insurance.

Car Loan

A car loan that is owed only by the person who died does not have to be repaid. The bank or finance company will repossess the vehicle for non-payment unless the estate repays the loan. If heirs want to keep the car or sell it, they must pay the loan first. If the car loan has a co-signer, that person continues to be responsible for loan payments.

Medical Debt

Medical bills are still there, even after someone dies. Medical costs are not generally made with a co-signer. Therefore, the debt belongs to the estate. The estate must pay the medical debt, along with other debt that is owed. The hospital could take legal action to seek debt repayment, including making a request from the estate. Heirs may pay the bills from the proceeds of the estate.

Credit Card Debt

Money that is owed to credit card companies is a collectible debt, similar to medical debt. If the credit cards are in two names, the other person remains responsible for continued payment. When the credit card is only in the name of the deceased, the estate is responsible for the repayment of the debt. If the debt goes unpaid, the company can take action to require the estate to pay what is owed.

Student Loans

A federal student loan is the only type of debt that is forgiven when you die in Wisconsin. A family member will need to provide proof of death to obtain a discharge of student loan debt. The same does not hold true for private student loans. Those must still be repaid, possibly by the estate. It is important to note that if the loan has a co-signer, that person becomes responsible for repaying the student loan.

Debts become part of the estate when someone dies. The estate administrator or executor will review the debts that are owed and arrange for payment from the estate. Resolving debts is one of the important tasks that must be completed before you can close out an estate and provide beneficiaries with the proceeds. To learn more about estates and probate, contact our legal team at Moen Sheehan Meyer, Ltd, at (608) 784-8310 or online.

Published June 26, 2023
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