Am I liable for the deceased's debts (loans, microfinance): what to do under Georgian law

What to do

1. Your status: an inheritance is both the deceased's assets and the deceased's debts (Civil Code of Georgia, Art. 1328). Debts pass only to the heir who has accepted the inheritance. Acceptance is either a notification to the notary or the actual possession and management of the property (Civil Code, Art. 1421). Living in the apartment, paying its bills, or taking the car already counts as acceptance. A guarantor and a co-borrower are liable under their own contract. A guarantor cannot invoke the heir's limited liability (Civil Code, Art. 899). For a spouse: common property answers for one spouse's debt only if the court establishes that the funds were spent on the family (Civil Code, Art. 1170).
2. Decide before the deadlines expire, whether to accept or refuse. Refusal is made before a notary within 3 months of learning of one's call to the inheritance; the court may extend this by no more than 2 months (Civil Code, Art. 1434). This is a separate and shorter period than the acceptance period. A person who did not manage to refuse in time may simply not accept the inheritance. Partial or conditional acceptance or refusal is not permitted (Civil Code, Art. 1435). A refusal “in favour of” another heir counts as acceptance (Civil Code, Art. 1421). Until a decision is made, do not use the property.
3. If accepted, the limit applies: accepting heirs are liable for debts only up to the value of the assets received, in proportion to their share (Civil Code, Art. 1484). Burden of proof: the heir must prove that debts exceed the inheritance, unless a notarial inventory exists (Civil Code, Art. 1485). For this reason, an inventory of the estate can be requested, within 2 months of the acceptance period (Civil Code, Art. 1432).
4. Has the creditor lost the claim? The creditor must present its claim to the accepting heirs within 6 months of learning of the opening of the inheritance, even if the debt is not yet due (Civil Code, Art. 1488). A creditor who did not know of the opening has 1 year from the moment the claim fell due (Civil Code, Art. 1488). Missing the deadline means losing the claim (Civil Code, Art. 1488). The exception: these deadlines do not apply to expenses for treatment during the last illness, wages, or funeral costs (Civil Code, Art. 1489).
5. To the bank and collection agencies: request the debt calculation and proof of the heir's acceptance of the inheritance, in writing. In court, object on the basis of the limit of the assets and the missed deadline for presenting the claim.
6. Where to apply: notary at the place of opening of the inheritance (refusal, inventory); district (city) court; National Bureau of Enforcement.
7. Evidence: notary's certificate on who accepted or refused the inheritance; inventory and valuation of the property; loan agreements and debt calculation; when the creditor learned of the death (letters, calls).
8. Pitfalls: paying the bank before establishing whether the inheritance has been accepted and what it is worth; assuming a loan dies with the borrower; a guarantor counting on the limit of the inheritance; confusing the refusal deadline with the 6-month acceptance period, since refusal is possible only within 3 months.

Be sure to check

• an heir who has not accepted the inheritance is not liable for debts; actual acceptance also counts as acceptance
• an accepting heir is liable only up to the value received and in proportion to his or her share
• the creditors' deadline to present a claim to the heirs and the consequences of missing it
• refusal of the inheritance: before a notary, within the deadline, in full, and not “in favour of” another person
• guarantors, co-borrowers and spouses are liable on other grounds