Assalamu Alaykum Wa Rahmatullahi Wa Barakatuh, All praise and gratitude are due to Allah SWT. May the blessings and peace of Allah SWT be upon His Messenger PBUH.
If your parents pass away while still owing a debt, then that amount needs to be taken out of the inheritance and repaid before the inheritors take their shares. However, if the inheritance isn’t enough to cover the debts then the inheritors aren’t in fact responsible to pay the shortfall from their own money.
Shaykh al-Islam Ibn Taymiyyah رحمه الله said:
“The heirs are not obliged to pay off the debts of the deceased, rather it should be paid from his estate.” – Minhaaj al-Sunnah, 5/232
Paying off your deceased parents’ debt in such a case will, however, be highly rewarded and considered as an act of birr (obedience) towards them. Alternatively, one could also try approaching the creditor and ask them to forgive the debt of the deceased.
And Allah Knows Best.
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