The scenario is like this: boyfriend has unpaid debt (either from loansharks or the bank themselves) however he died from a terminal illness before debt collectors can get to him, but does his death automatically “erase” the unpaid debt he owes as he’s gone?
The thing is, they can’t pursue him as he’s literally dead. The contract he signed prior to death only bares his name (meaning the debt can’t be passed down to either his girlfriend or family) as he’s the only signatory listed on paper (while his family are not signatories).
Debt collectors or loansharks show up to his residence only finding out from his girlfriend that he passed away (she has his death certificate to prove it), she reiterates that his debt can’t be paid the “conventional” way as he’s no longer alive to do that.
I always wondered if the " im going to die so ill assume all debt and transfer assets" would be a viable option.
In the US: a big gotcha is medical debt.
Surviving spouses are often stuck with the debt after the patient dies.
It’s one of the many reasons that when you check into a hospital they make you and your spouse sign all kinds of paperwork.
It’s usually the first thing they make you do, and why they roll out that stupid computer cart. Making sure you can and will pay (even after death) is all they really care about. Doing it right when you come in (scared and seeking help) is when they love to pounce.
Providing actual healthcare is way down the list of priorities. I’m talking about owners and admins, not providers.
Yes, it’s very predatory. Murica.
Wild how this is normalised. Here in the UK we’re relatively placid and docile when it comes to respective governments fucking us over, which they do with depressing regularity, but I feel that if this was to suddenly happen in our hospitals there would finally be large-scale rioting in the streets. We’d go proper French.
In addition, some couples will even divorce when one of them gets a terminal diagnosis, just to avoid screwing the survivor.
Legally, in the US at least, debt passes away when you do. But any assets you own first go to the debt before they go to any heirs you have.
As for the loan shark, well the mob doesn’t follow the law. They’ll do what they want.
But shady collections agents are still going to pursue and harass, even when they know they don’t have a legal leg to stand on.
Yes. Criminals are dangerous. Anything is possible if they decide to send a message.
So the debt doesn’t pass, otherwise you wouldn’t have to sell the assets.
That’s oversimplifying it. Suppose you have a relative who has $20,000 in unpaid bills, and $5,000 in a savings account. They pass away and leave everything to you in their will. The money in the savings account is used to pay some of the bills, but the remaining $15,000 debt does not pass on to you, or anyone else. If it was the other way around ($5,000 is debt, $20,000 in savings), you’d get $15,000.
In the US, debts of the deceased are paid out of the estate. If there isn’t enough money in the estate, the debts just go unpaid—descendants or other survivors are not responsible.
In your scenario, assuming he owned the residence, it would be sold and the debts repaid from the proceeds; likewise with any other assets he left behind.
Exactly. When my wife passed away the only thing we owned were personal items and one vehicle.
The collectors were sending demand letters for an estate of which there was none. Eventually I quit opening the letters and carried a marker with me to the mailbox. When something was sent to the estate of the address was blacked out, they had “return to sender - no estate” put on the front, and they were put in the outbox. After a few months they stopped coming.
If someone was coming to the door (didn’t happen in my case) I would simply have a page written up to hand them that states the person they are looking for is deceased and if they didn’t own anything that there was no estate. It would go on to say that they personally, along with any person’s they work with or for, as well as any subsequent agents are trespassed. If they contact you for the matter again law enforcement will be contacted. It would be handed to them and a picture of them would be taken after which the door would be closed.
The only way a family member can be held liable for a debt is if they have cosigned the debt.
This varies by state. In community property states the spouse could be liable for the debt if it was acquired during the marriage, even if they’re not a cosigner.
I find myself thinking about this more and more as I get closer to retirement. I’m hoping that I get enough sufficient notice of my own death that I have time to close my checking/savings accounts, help liquidate any property I have that my kids don’t want, and convert as much as possible to cash. I intend to tell my family that any debt collectors that come knocking are to be told, in no uncertain terms, to fuck all the way off.
You should really talk to an estate lawyer first.
Same. I don’t own much anyway. The only thing that I am working on that will have any value will be classified as a 501c3.
finding out from his girlfriend that he passed away
She should not talk so much to such kinds of people.
certificate to prove
she reiterates
“He does not live here anymore” should be enough. And a back turned on them. No more word! And of course no offer to prove anything.
She does not owe them money.
She does not owe them proof.
She does not owe them explanations.
She does not owe them her time.
Except if they were married. If they lived together, depending on the state, they could be legally married by default. And some debts are transferable to spouses in community property states.
depending on the state, they could be legally married by default.
Never heard that before … very interesting to know.
But would OP say boyfriend and girlfriend all the time then?
What they say doesn’t matter. The laws of the state matter, and also if the debt collector is going to go to court to argue for the case to get the debt. They’d have to make a case that proved cohabitation such as to trigger common law marriage, or collective ownership of the assets.
It also relates to divorce. If you live with someone for 10+ years, but never marry, but say file taxes together, in some states one party could sue the other for alimony payments.
It’s not many. There is like 9 states with communal property, and 8 with common law marriage and they are all difference in how their interpret things. TX is one large state that is in both groups.
It should be noted that common law marriage is EXTREMELY rare. If you call them your boyfriend/girlfriend instead of your spouse, you’re (at least in states I’ve looked into) not ever going to be common law married. If you never hold some kind of ceremony, you aren’t common law married. It’s actually way more complicated than just living together.
Edit: filing taxes as if you’re married is also often not enough to make you common law married either, but obviously ianal and you need one if you want to know if you are common law married or not.
The estate has to pay them off. If the estate can’t it files bankruptcy and the courts divides what is left according to laws. The dept do not pass on, but sometimes the court will sell things to get cash.
This situation will depend on the laws in your country. You should contact a lawyer for actual legal advice relevant to your area. However, I believe the standard is that (as stated by others) debts are paid by the estate of the deceased, and any remaining debt simply disappears.
If the bank sold the debt to a debt collection agency, the same rule applies. But these are not loan sharks. These are debt collectors.
A loan shark is, like, a mobster who loans you some money with the understanding that the collateral is “we’ll kill your family”. As criminals, loan sharks aren’t known for their propensity for following the law, and their interpretation of what happens to the debt may very well be that you owe it to them now. In this case, I suggest you find a way to pay the debt as, again, the collateral is “we’ll kill your family.”
I mean loansharks are criminals where you are at? If so their process is whatever they want. Its like asking if they can steal from a place because of circumstance or mug someone. As for legal debt I am under the impression where I am at that some can put a lean on the estate or such but they can’t go after another person unless its transfered to them or they are on it like a mortgage. Even then I don’t think it works like that. I mean if they are on it sure but I would assume they would need to get a new mortgage to pay off the old one or something.
As has been mentioned by a few people, the debt does not pass on. Any creditors will take what is owed to them first out of any estate that would be passed on to next-of-kin or the beneficiaries of any will the boyfriend had.
If there is no will and you aren’t married it’s incredibly unlikely you’d inherit anything anyway.
Any assets owned by the deceased will have to be sold in order to settle any debts first before anything else can be passed on.
If the estate isn’t valuable enough to cover multiple different debts, I wonder how it is decided which debts get first, second, etc, priority. First come, first served? Oldest debt first? Largest debt first? Disperse monies to each debt owner equally?
If there’s an inheritance, then the inheritance gets chipped away at until it’s either gone or the debt is paid.
Then, the beneficiary gets what’s left.
How it works if the house was his, I don’t know. Defer to an attorney. You should defer to an attorney anyway. In addition, unless you can legally claim common law wife in your state, if there’s no written, legally notarized will, in most cases the default inheritance is going to be parents or kids. Again, you should talk to an attorney.
But no, legally, you’re not personally responsible for his hospital bills or anything like that. Send them all death certificates and then return to sender or whatever his bills until they stop.
Since loan sharks are outside the law there’s no telling what could happen there.
