My elderly parents owe $70K and have almost no assets — and their current plan is just to hold the debt till they die. What does this mean for me?

The bigger problem? They owe nearly $70,000 in credit card debt and medical debt. They’ve considered bankruptcy but are leaning toward ignoring the debt and collections calls, hoping it all goes away when they die.

June is worried. She’s unsure of the legal risks, fears debt collectors could sue her parents and wonders if she might inherit the debt.

Is it illegal to ignore debt collectors?

Ignoring debt collectors isn’t illegal, but it can carry consequences. The Consumer Financial Protection Bureau (CFPB) says Americans are protected from harassment and abusive communication, but that doesn’t mean collectors will stop calling. They can also still file a lawsuit.

The CFPB [1] warns against ignoring lawsuits from creditors. If you don’t respond, the court may issue a judgment against you. Even if you don’t believe that you owe the debt, a judgment could include the balance, interest, fees and attorney costs. It also gives creditors the power to garnish wages, put liens on property or freeze bank accounts.

For people like June’s parents, those tools aren’t likely to be used. Federal benefits such as Social Security, Supplemental Security Income, veterans benefits, federal student aid, military annuities, Office of Personnel Management benefits, railroad retirement benefits and federal disaster assistance generally can’t be garnished. The exceptions are delinquent taxes, child or spousal support or student loans. State benefits depend on local laws.

Can I inherit my parents’ debt?

June also worries about inheriting her parents’ bills. The good news: you can’t inherit debt unless you were a co-signer on a loan or credit card.

That said, debts are paid out of the estate before it's distributed to heirs. Assets can be sold to settle what’s owed, with lawyer fees, estate taxes and funeral costs usually coming first. Federal debt, medical bills and property taxes often outrank credit card debt. If the estate is insolvent, as may be the case for June’s parents, the remaining debt is wiped out.

But there is a catch. Some states have “filial responsibility” laws that require adult children to cover certain parental expenses, usually medical care. Twenty-seven states still have them, though some have rolled them back. Nursing homes have been known to use these laws to go after unpaid bills. If June lives in one of these states, she should avoid signing as a guarantor for her parents’ care.

Don’t pass on financial grief

The safest option for June’s parents may be bankruptcy. Filing Chapter 7 [2] would stop the collection calls and wipe out their unsecured debts, like medical bills and credit card balances. Social Security benefits are exempt, and they don’t have valuable assets that could be seized. Other exemptions typically include a modest car, household goods, necessary clothing and pension income.