The co-maker used the money and when they died, is your partner obligated to pay for it?

Hello:

Under Philippine law, the obligation of a co-maker in a loan contract is solidary in nature, meaning the lender may go after any one of the signatories, including you, for the entire obligation. The death of a co-maker does not extinguish the debt itself. Instead, the liability of the deceased co-maker is transmitted to her estate under Article 774 of the Civil Code. This means:

a.) Her husband is not personally liable for his wife’s debt simply by being her spouse. He is not required to use his own personal money to pay, unless he himself signed as co-maker or guarantor.

b.) However, the estate of your sister, meaning the properties and assets she left behind, can be made answerable for her share of the obligation. Creditors may file a claim against the estate during settlement of her estate proceedings.

c.) Since you are a surviving co-maker, the creditor may legally demand full payment from you as well. Afterwards, you may file a claim against your sister’s estate to recover her share.

In practice, the creditor will often pursue the surviving co-maker first because it is easier than filing a claim in estate proceedings. To protect your rights, it is advisable to prepare documentation of your payments and later claim reimbursement from the estate.