Debts of the Deceased in Puerto Rico: Who Pays Them

Few things distress a grieving family as much as collection calls and bank envelopes that keep arriving in the name of the person who died. The good news is that Puerto Rico law protects heirs: the deceased's debts are paid with what they left, not with the money of their children or their widow. This guide explains the scope of that protection and how to handle each type of debt.

The main rule: liability only up to the value inherited

The Código Civil de Puerto Rico de 2020 (2020 Civil Code) says it clearly: "The heir is liable for the obligations of the causante, for the bequests and for the charges on the estate exclusively up to the value of the estate property they receive" (Art. 1587). The causante is the deceased person whose estate it is.

In plain words:

• If the estate is worth $60,000 and the debts add up to $70,000, creditors can collect up to $60,000 from the estate property. The remaining $10,000 is not paid by the family.
• The heir's own property, such as their house, salary or savings, is not mixed with the estate's property (Art. 1590).
• If a creditor tries to seize the heir's own property for an estate debt, the heir can object by presenting an inventory of what they received (Art. 1591).

You do not need to request the "benefit of inventory." Under the 1930 Code, someone who accepted an inheritance "purely and simply" was also liable with their own property (Art. 957 of the 1930 Code), and to protect themselves they had to accept with the benefit of inventory (beneficio de inventario). The 2020 Code eliminated that risk: the protection is automatic. If the death occurred before November 28, 2020, the earlier rules may apply; see 2020 Civil Code vs. the 1930 Code.

The exception: when the heir is liable with their own property

The protection has limits. Under Art. 1588, when the estate's debts are greater than its assets, the heir is liable with their own property if they:

• sell, spend or use estate property to pay debts that are not yet due; or
• through their fault or negligence, estate property is lost or damaged.

Why does this rule exist? Because if the estate is not enough for everyone, paying early a creditor whose debt is not even due hurts the others. And if the heir lets the house deteriorate, or sells the car and keeps the money, creditors lose the security they were counting on.

In practice: before paying anything with estate property, make a complete list of assets and debts. If the debts look larger than the assets, do not pay ahead of time, and do not give away or sell property without advice.

A practical order for dealing with debts

The Code does not offer a simple list of "who gets paid first" for every estate, and when the property is not enough for everyone there are legal priority rules among creditors that are worth reviewing with an attorney. With that caveat, this is a reasonable order to get organized:

1. Make the inventory. Gather account statements, the mail and a certificate of debts from Hacienda (Puerto Rico's Treasury) and from the CRIM (Municipal Revenue Collection Center). Without knowing how much there is and how much is owed, you cannot decide well.
2. Protect the property. Keep the insurance, pay what is essential so the house is not damaged and do not let the car be lost. These acts of preservation do not mean accepting the inheritance (Art. 1581).
3. Handle the estate charges. The funeral, the costs of inventory and partición (division of the estate) and the costs of preservation and administration are charges on the estate (Art. 1589).
4. Identify the secured debts. The mortgage and the car loan have the asset as collateral.
5. Handle debts owed to the Government. Taxes owed to Hacienda and the CRIM are a priority lien on the property (see below), and until they are resolved there is no relevo (Hacienda's lien release).
6. Finally, the unsecured debts, such as cards and personal loans, to the extent that what remains is enough.

The deceased's creditors can object to the partition until they are paid or their claim is secured (Art. 1785). If the partition is done without paying them, they can collect from any of the heirs, but always only up to the value of what that heir received (Art. 1786).

Debt by debt

Mortgage

The mortgage continues to encumber the house even though the owner has died. The heirs have several options: keep paying to keep the house, sell it and pay off the loan with the proceeds, or, if the house is worth less than what is owed, let the bank foreclose. If they decide to keep paying with their own money, they should keep the receipts: accepting the inheritance does not extinguish the heir's claims against the estate (Art. 1590). See also selling an inherited house.

Car loan

Like the mortgage, a vehicle loan is usually secured by the vehicle itself. If no one pays, the creditor can repossess it. Before deciding, compare what the car is worth with what is owed. For the transfer, see vehicles and other assets.

Credit cards and personal loans

These are unsecured debts. They are collected from the estate property, if it is enough. If you did not sign as the account holder, co-signer or guarantor, the debt is not yours.

Debts owed to Hacienda

Taxes the deceased owed to Puerto Rico, under any part of the Internal Revenue Code, and municipal property taxes are a priority lien in favor of the Government on all of the estate's property (Section 2054.01). A Hacienda debt certificate is filed with the Planilla Informativa de Caudal Relicto (estate information return); if there are debts, the ordinary relevo is not issued.

The law provides two ways out (Section 2054.02):

• Conditional release (relevo condicionado), if the debt is under administrative or judicial review, with a bond of 125% of the disputed debt.
• Conditional authorization (autorización condicionada), to sell or finance an asset and use the proceeds to pay the tax debt, as long as the property that remains encumbered is worth at least twice what is still owed.

Hacienda also considers as debts those under a payment plan, and those of a corporation or partnership in which the deceased held more than 80% (DA 18-09). See Hacienda's lien release.

Debts owed to the CRIM

Property tax for the current year and the five previous fiscal years is a first lien on the real estate (Código Municipal, Art. 7.057). In addition, the Registro de la Propiedad (Property Registry) does not record the partition of the deceased's property while taxes are unpaid (Art. 7.063), and Hacienda requires a CRIM certificate showing no debt for the relevo.

When debt collectors call

It is common for a collection agency to call the widow or the children. Some practical recommendations:

• Do not agree over the phone that the debt is yours, and do not promise to pay with your own money. You are not a debtor just because you are a child or spouse.
• Ask for everything in writing: the company's name, the original creditor, the amount and documents that prove the debt.
• Say that the debt must be claimed from the estate (sucesión) or its administrator, with the death certificate if they ask for it.
• Do not pay out of pocket to "get them off your back." If other debts turn up later, no one will give that money back.
• Keep a record of every call and letter.

If you are the surviving spouse, distinguish between the deceased's separate debts and the debts of the sociedad legal de gananciales (community property regime), which are paid before the community property is divided. See community property and inheritance.

CaudalRelicto.com is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the courts or any government agency. This page is general information, not legal advice from an attorney who knows your case. Names and figures in examples are hypothetical. Found an error? Tell us.