Who must pay back the credit card of a deceased?

Image result for deceasedIf your parents or in-laws are severely in debt, be prepared, because it will be up to you to pay off their debts as a result of their deaths. In fact, you will have to pay their debts only if you consent. The anxiety is normal; many children are worried about the finances of their parents. In addition, with an increasingly aging population, this concern no longer concerns only children, but also creditors. Below, you will find all the necessary information regarding the debts and their payment following the death of a close member.

The legacy of debt

What happens with the debt after the death of the person? The answer will depend on a number of factors. For example, everything depends on whether the personal assets of the deceased allow the payment of the debt. Also, it depends to whom the deceased was indebted. Although the legislation covers this problem a bit, most credit companies have their own rules.

Usually, the creditors will try to recover the debt through the personal assets or property of the deceased. In case of failure, they can turn to the children or relatives of the person. In case of solidarity debt, it is the person who has remained alive who will have to pay the entire debt.

When two persons are jointly and severally liable to a creditor, both are also liable for the debt and its payment. If one person dies, the other becomes responsible for the entire debt.

Credit Card and Insurance

In some cases, you can use your insurance to pay off the remaining debts. You can consult the creditor and see if he and the deceased had some sort of insurance for that kind of situation.

Make sure your situation is covered by the insurance plan you choose. Hard to believe, but it’s not just because you pay for this insurance that it will apply when the need arises.

Very often, clients will pay for different types of insurance, but once they die, their children or relatives will not be able to use it to pay the debts. One of the main reasons is the age at which the person died. Pay attention to that!

Sometimes, insurance companies will notify their clients that they are paying for coverage that does not even apply to them. Customers will be billed monthly for this coverage, but if in fact it is of no use to them.

Bad debt

A debt is considered uncollectible when there is no money in the estate to pay it or when the debt was solely in the name of the deceased.

In such a case, it is better to be very organized. Thus, when the creditor contacts you, you will have the necessary documents to demonstrate the absence of funds in the estate. However, it is suggested that you consult a specialist before contacting the creditor.

Will and debts

As you know, the will determines in some ways the future of the deceased’s finances. However, note that wills distribute assets, not debts. But these assets can be allocated only after the payment of all debts. Ideally, it is hoped that the wealth will be rich enough to pay off all debts. If this is not the case, goods may be sold to make up for the missing amount. Once this is done, the remaining wealth is divided among the heirs.

Be very careful if a creditor contacts you to collect the debts. If you think you are not responsible for this debt, ask for a copy of your signature on the loan agreement. If you pay for a debt, this is seen as a consent; as if you admit to having been a debtor. That’s why we recommend you consult a specialist before.

Take care of yourself and know your rights

Always keep in mind: you are only responsible for paying off a debt if your signature is on the loan agreement. Without consent, no one can send you their debts. Debt is an individual burden, except in the case where someone decides to take on someone else’s burden. Have all the documents, be organized, know your rights and, if necessary, contact a specialist.