Does Debt Disappear When You Die? Here's What You Need to Know

[MULTIZ321]

Does Debt Disappear When You Die? Here's What You Need to Know.

What Happens to Your Debt When You Die?

It might seem like you’ll be paying down debt until the end of your life — but your debt will likely outlive you. Here’s what happens to debt when you die — and who’s on the hook for paying it off.

www.thepennyhoarder.com

Richard

 

[am1]

Good to know as otherwise it costs us all.

 

[Talent312]

What the article doesn't say is that, in most states, after notice to a debt holder, a claim-clock starts running, and if the debt holder does not file a timely claim, their claim is barred. This is to establish certainty as to what debts the estate is subject.
Of course, liens on property (mortgages) survive that and dealt with.
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[dagger1]

I wonder what TS HOA’s do when owners die and the MF’s stop coming. I assume they foreclose at some point.

 

[Talent312]

I wonder what TS HOA’s do when owners die and the MF’s stop coming. I assume they foreclose at some point.

They may claim amounts currently due. For future MF's, if executor unloads it on some unsuspecting heir(s), they'd pay it. OTOH, if its disclaimed, the HOA could accept an executor's deed-back or foreclose.

 

[AnnaS]

I see student loan, mortgage, cc.....what about a car Loan or lease? If it is only under one name but married. For example, our car is a lease under hubby's name. If he passed, the lease can be returned? I don't see this scenario mentioned. I/we should look into this/ask about it. Always good to know.......Coming up in a few months.

 

[CalGalTraveler]

Anyone familiar with debts when a Transfer on Death(TOD) is in place? We have an elderly relative with debts on her home and a TOD in California. TODs do not have an executor to settle accounts before it passes to heirs.

 

[dagger1]

Anyone familiar with debts when a Transfer on Death(TOD) is in place? We have an elderly relative with debts on her home and a TOD in California. TODs do not have an executor to settle accounts before it passes to heirs.

I think TOD deeds like we have here in Texas transfer debts with the deed they are secured by. I think the heir would receive the property without going through probate but the debts remain and are still secured by the deed.

 

[WVBaker]

What the article doesn't say is that, in most states, after notice to a debt holder, a claim-clock starts running, and if the debt holder does not file a timely claim, their claim is barred. This is to establish certainty as to what debts the estate is subject.
Of course, liens on property (mortgages) survive that and dealt with.
.
.

That's an interesting concept for minimal debts, but I can't see many higher debt amounts being forgotten, so to speak. Some states still banish people to debtor's prison for less.