Legal Corner: Payment plan contracts after the contract holder dies

LAKE CHARLES, La. (KPLC) - Legal Corner answers viewers’ civil legal questions.

QUESTION: My elderly father purchased solar panels for his house in April of this year. The payment plan is for 25 years. He was just diagnosed with Stage 4 pancreatic cancer and is not expected to live much longer. What happens to the contract after my father dies?

ANSWER: Unless there is language in the contract to the contrary, a contract does not terminate upon the death of an obligor.

The obligation to pay out the contract will become a debt of the decedent’s estate. The heirs or legatees are NOT personally responsible for the debts of the decedent. Only the estate is liable.

Usually, when an estate has debt, an administrator or, if there was a will, an executor will be appointed to sell the assets, pay the debts, and, if there is anything left over, then distribute the assets among the heirs. So, in this case, carefully read the contract, and see if the contract can be canceled. If not, know that the estate will need to pay the debt.

QUESTION: Can the company put a lien on his estate, or do they just repossess the panels?

ANSWER: It is likely that the language in the contract has already granted the creditor a lien on the house.

Just like a mortgage, if the house is sold, then the lien will have to be paid from the sale proceeds. If the house is not sold, then the creditor will have the right to foreclose on the house.

The panels were probably installed in such a way that they are now attached or integrated into the house. If so, then they are now considered what the law calls “fixtures” which means they are now a part of the house and are not moveable property. Hence, they cannot be repossessed separate and apart from the house.

Even if they could be repossessed, the mere repossession would not satisfy the debt. The creditor would still be entitled to the amount owed less any value that the used and detached solar panels may have.

QUESTION: Am I held liable for the solar panels if he signed a power of attorney to my name?

ANSWER: No.

A power of attorney is an agent for the principal.

The power of attorney or agent acts on the principal’s behalf. The agent is like an employee or a representative. The agent is never liable for the principal’s debts unless the agent personally guarantees the debt or acts in bad faith.

Also, powers of attorney are only for the living. They expire and become null upon the Principal’s death.