In my DW's country (she is not a US citizen), you DO inherit your parents' debts. That's why we had to disown anything from her father's estate when he passed. He had about US$4million in debt, about half from the loan shark variety of lender. He had his own business, and had my WSIL (worthless sister-in-law) working for him doing the accounts. Between the two of them, they ran the company into the ground deeper than a smart missile can go into a bunker. Neither of them understood that when you get a loan, you have to pay it back. Mind you, interest rates for loans here were in the 1-2% range from banks at the time. They went to loan sharks after a while, who were charging somewhere on the order of 50% a month! Talk about STUPID! I remember very clearly the first time they asked for money (not a loan, more like "I need $5000 so I can pay the employees, you need to send it now"). The day before, my FIL had gone golfing with his buddies, paid for them all, at about $1500. I could not believe that he had the gall to make this demand after spending so much on golf the day before (his normal golf tab was over $3000 a month at the time). I was furious, but helped them out anyway. After somewhere on the order of $30k or so (yes we stupidly helped, but we were trying to preserve the family), we told them that we would not let them go hungry, but we could not support their business.
As far as I am aware though, inheritance of debt does not apply in the US. IIRC, the loans are paid from cash on hand if there is enough. If there is not enough to pay off the debts, the bank forecloses and gets what it can. As to credit card debt, any remaining property is sold to pay the balance or the credit card company writes it off. If there is anything left after the bills are paid, the provisions of the will of the deceased are applied and any remainder is distributed as specified. That's my understanding, anyway.
R