What Happens to Your Debt When You Die

In debt is not a fun place to be by any means. What happens to your debt when you have passed away? Well, since you aren't around to pay for anything, it seems like they would all be thrown out the window, right? Well, don't start reaching for those credit cards just yet, because there are some very important things that you need to know about your debt and just where it goes when you are no longer around to bare the burden.

The funny thing about debt is that, when you owe a business money they will do everything that they can to get that money. This might involve harassing phone calls at all hours of the night or even trying to seize some of your property to accommodate. This would make you think that once you are gone from this world, that you debt just vanishes into thin air. There is nothing that anyone can do to get any more money out of you right? This could be no further from the truth.

If you pass away and you have a very large amount of debt, the credit card company can assign this amount of debt to any and all of the names that appear on the card. The credit card companies do not get notified of a death of one of their clients. They just see it as an overdue bill and will pass this to their collection office when they notice that no one is paying. This is what happens all the time when it comes to unpaid credit bills. Most often, the credit card company can be contacted and notified of the situation and most but not all, cases are written off.

The very same thing can be said to land and homes that are left for family members. If there is an outstanding bill that is associated with an inherited house, you could easily be stuck paying. There are states that will waive debt owed by the deceased, but be warned that there are still some that do not. By law at the time of the reading of the will the creditor is entitled to one year to claim payment for a debt on an estate. You are also required to give the creditor notification so that they may waive the debt or place the bill on the heir. It is very wise for you to do this as soon as possible because if you wait too long they may see this as you trying to get out of paying this debt, and a fee that would have otherwise been waived is now yours to keep.

So now you know that the old saying isn't true. It would be great if we didn't have to worry about debt. Just because you aren't here doesn't mean that creditors are going to forgive you for all of the money that you've borrowed. Just remember to check the laws for your state when it comes to inheriting property from a will, and be sure that all the creditors are informed of the death. It could help prevent you from eventually having to pay back a lot of owed money.