Americans have a lot of debt—more than six figures’ worth on average, which is kind of a mind-blowing number. It’s difficult to get through life without incurring at least some debt—buying a house without a mortgage is a challenge for most people, and a lot of folks find themselves relying on credit cards now and then just to get by. And debt causes us a lot of stress and anxiety, which is why our first reaction when we’re contacted about a new debt is often panic.
But before you assume you’re on the hook for a debt, it’s usually worth it to take a breath and dig into whether you’re actually responsible. Just because a debt collector or business contacts you about a debt doesn’t mean you’re legally responsible for it—but if they can get you to pay it anyway, that’s great for them. If you’re being asked to step up for a debt that you either didn’t personally incur or believe you paid off, here’s what you need to know.
These are not your debts
First, broadly speaking, you’re probably not responsible for someone else’s debts, even if it seems to make sense:
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Deceased relatives. If the debt belonged to a deceased parent or other relative, you’re probably not responsible for it—unless you co-signed a loan with them, held an account jointly with them, or you were the executor of their estate and paid yourself an inheritance without settling the debt. Debts left behind have to be paid from the estate, not from a relative or child’s pocket—it’s actually illegal for them to try to get relatives to pay the debt.
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Spouses. How debts are handled in the event of a spouse’s death or divorce depends on whether you live in a Community Property State (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) or a Common Law Property State (everywhere else). In Community Property states, the marriage (i.e., the community) shares most debts incurred during the marriage—even if only one spouse was involved. In Common Law states, however, you’re usually only responsible for your own debts even while married, so only joint debts (like a credit card with both your names on it) or debts that benefit the marriage are shared.
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Non-relatives. Again, unless you co-signed something or entered into some other contractual agreement to share a debt with someone, you can’t be held responsible for someone else’s debts.
How to tell if you need to pay a debt
When it comes to debts that someone claims you owe personally but you’re not sure—whether you think you’ve already paid it off or because you can’t be sure you actually incurred the debt—you can take a few steps to figure out if you actually have to pay it:
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Check the date. In most states, there’s a statute of limitations on debt of about six years. At that point, you still technically owe the debt, but you have no legal obligation to pay it (it can still show up on your credit reports, however).
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Demand information. If you’re not sure if the debt’s really yours, contact the collection agency or business and request more information—including the name of the creditor (and the name of the original creditor, if the debt has been sold), the amount owed, and the date the debt was created.
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Dispute. If you don’t think the debt’s really yours, submit a dispute to the business or collection agency in writing within 30 days of receiving that information (what’s known as a “validation notice”). Provide proof of payment if you have already paid the debt, and bone up on what collection agencies can and can’t do in pursuit of a debt.
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Research. If you have trouble getting information from the collection agency or the original creditor, you can research your own debt history by pulling your credit reports, checking old records (like bank and credit card statements—you can contact your bank and credit card company to request old statements), and old correspondence like email. If you can’t verify the debt on your end, file a dispute.