Night Owl
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Your debt will linger for close relatives and your estate. There's a lot of misconceptions. Your life insurance, if you have any, will not automatically pay your debts. As an example;
$50,000 in debt
a $100,000 policy, left to your adult children
you are married
The money will go directly to your adult children. Your spouse will be left with the debt. The only way to ensure your insurance money is used to pay debt is to directly instruct that under the provisions of your will, and you will have to make arrangements with your insurance people as well.
Anyway, the question is pretty broad. Probably best to go talk to a probate lawyer about it. They have the most experience in who gets what and how when someone dies. |
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MB
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It depends on the type of debt. A couple of people have answered to not worry about but that is really not the way to go.
Student loans do just go away. Once you pass they are written off. Credit card is typically unsecured but if they can trace major purchases they will come and get the stuff. Anything secured, such as a car loan or a house, will either have to be paid out of the estate or they are going to repossess it. On a positive, note the deceased doesn't have to worry about their credit report anymore.
Typically, life insurance proceeds are secure from creditors since they are left directly to someone and not to the estate. However, the assets of the estate are definitely not safe from creditors. |
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Pam H
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Your estate has to pay them. |
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pooterilgatto
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It is paid out of your Estate. |
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LT
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If it is your name only on the debt then your estate will pay them if you own anything. If some one else has their name on the debt, then they will be responsible. If the debt is in your name only.. there is no estate... then they will not/can not get their money. |
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scooby.greta
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Your estate (which is your assets when you die) pays for all your debt. (That could be your house, car, insurance, jewelry, etc.) If there is no money to pay the debt your possessions have to be liquefied so all your debts will be paid. Here is a link to help better understand it. |
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lesleyanne_g
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when you pass away , all your debters will require a copy of the death certificate to prove that you really have passed away, and then your debt should be wrote off. |
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Jeff Sadler
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Your debt is taken out of your estate. Before anyone gets anything the debts are paid from the estate. Then what is left over can then be inherited.
This is true in all cases in which you are the sole debtor. If however your spoused has signed as a co-signer then they would get your part of the debt.
Oh and some of the posters are correct. Insurance has a specific beneficiary and the money is theirs not yours. Debt is not transferred to your relatives. However in many states anyone that has a claim against you can file for the money and that comes out of your estate before anyone can inherit from the estate.
An oddity in some states is that relatives can not collect debts owed. Those debts are automatically canceled. My parents ran into that one. |
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Celtic Tejas
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Your Estate pays for it. Money left behind, such as Life Insurance, sale of property, stocks etc. What is left after that goes to your Heirs. |
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Autumn
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Your debts, as well as your assets, pass to your estate when you die. If the debt is a joint debt with a spouse, the spouse will be responsible for paying it. If you're married and have children, it would be advisable for you to buy some life insurance. A term policy is the cheapest alternative, and can be quite a help to a spouse who's left alone to raise a small child(ren) with little or no financial assistance, after he spends approx. $10 grand on your funeral.
Contact an attorney to write your will, and have it properly recorded at the courthouse. (After you purchase that insurance policy ;-)
Edit: Wills go thru probate. Estates go thru succession before anyone gets a dime or bauble. |
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nastyfokr
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All depends !!! If you don't have a will, the state takes charge of it and it's distribution. If you have a revocable or irrevocable beneficiary. You may have creditor protection on a universal life policy or Segregated Fund. Personal residence or cottage makes a difference also. Moneys in accounts, investments, RRSPs, RIF and much more. |
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ChAtTiNg
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goes to the estate, whatever is not paid is basically on the executor.... |
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pastor carl
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after death your bills are considered paid. but there is a matter of a sin debt. which is called the second death, however, if you have accepted jesus christ as your saviour and lord that bill has been paid by jesus when he died on the cross for yours and my sins.if he isnt accepted as lord and saviour then thers the second death. for the wages of sin is death. thank you. god bless. pastor carl. |
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O'Papa Smurf!
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Everything usually goes through probate. |
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NM
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either it gets washed away or someone else is left with it lol |
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waz
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it dies with you if it is your sole name, different for tax and stuff though |
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Tusker
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if its good debt, it gets wiped out. if its so-so debt, it goes into debt purgatory before getting wiped out one day. If its an embarrassing debt, your survivors get to gasp at the discovery of learning about it well after you're gone. |
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Bookworm Jenn
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Your debt will be taken care of by your Life Insurance. If that is not enough to cover it or you do not have Life Insurance, then the debt passes on to your family. If by some strange circumstance you have no family, then the state will step in and take ownership of all your belongings and use the money gained to pay your debt and the rest is wiped away. |
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pink7steel
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Someone else has to worry about. |
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Lost User
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I always wonder about that, I bet they simply place it on the family members or they forget about it, but humans are greedy so most likley they will find away to get back there money. |
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sweetbeesma
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whoever is in charge of your finances has to pay it. If you have life insuraqnce it will have to go towards your debt. |
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Cassie
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What are you planning on doing??? |
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Leon Scott Kennedy
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well we will rid of the burden atleast :P |
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â–ºAurora Borealis
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I think it gets carried on to your immediate family or if you don't have any family they raise the money by seizing your household possessions or any possessions left in your will. |
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Amirra
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Depends - if you don't have life insurance it usually goes to your spouce or next of kin - whoever you have in your will. |
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hippychick
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the life insurance will pay for it |
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daddysgirl962001
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Your family members will inherit it unless you have some really good life insurance. |
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Richie P
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sadly when this occurs usually your debts are transfered to a loved one or family member so its better to make sure that you leave nothing behind that would jump up in prices or cost your family members in the end. |
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Ridabird
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I'm not sure maybe it get passed over |
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