When parents pass away with debt, that responsibility does not typically pass directly to their children.
Consider how the Illinois probate court handles debt after death.
Co-signers and debt responsibility
Unless you co-signed on a loan or other line of credit for your parent or jointly own property with them, you likely will not be responsible for their debt.
Sometimes parents attempt to transfer assets to their children shortly before death, but that can still result in the court using those assets to pay debt collectors. Ultimately, children are not responsible for any debt the estate cannot cover, including medical bills.
Estate executors and probate
If your parent made you the executor of their estate before death, you will go through the probate process to confirm their will. This requires you to oversee the payment of claims and debts and comply with probate laws to resolve debts owed by the estate.
Not all debts require payment
The estate is not responsible for some debts. For example, student loan contracts sometimes have terms that stipulate automatic forgiveness upon death. If your parents owned any real estate with a mortgage balance, that would likely transfer to the new property owner. In some situations, the estate may not need to pay back credit card debt.
Creditors may make formal or informal claims on the estate for debts. The executor is responsible for informing them of their right to do so, and they have a deadline to make their claims.
Every case has unique circumstances, but most children can grieve their loss without the burden of inheriting debt.