People have a lot of questions about money, but unfortunately we don’t have a lot of people to ask about money.
In fact, according to one news report, most people only have their spouse or a family member to ask about money matters. That leaves a lot of misinformation out there.
When inflation hits or we don’t get that raise we needed, we sometimes need to take out a loan.
But what happens to that loan if the worst happens? There are generally three things that could happen if you pass away with any debts, like personal loans. We’ll break them down for you, here.
If You Leave Behind Money or Property…
When we die, our debts don’t die with us. Specifically, if we leave behind any assets, like money in a checking account or any real estate, automobiles, or anything else worth any money, then our debts will follow too.
Basically, if you leave a house or a car to someone, then you’re also going to be passing your debts to that person, too.
Generally speaking, when you take a loan out, you provide your social security number and other identifiers. When you pass away, and your property is passed to someone else, your lenders may be able to find out who you passed the assets to. When they find that out, they’ll send a bill.
If You Don’t Leave Behind any Assets…
Now, if you don’t have anything to leave behind, then the debt is written off. Outside of your having passed away, this is the best case scenario. That is, unless you’re married and live in a Common Property State (see the next section).
If you’re Married in these Nine States…
If you pass away in any of the nine states listed below this paragraph, and you’re married, your spouse could be held responsible for all or some of your debts. Even if you don’t leave behind any property. These states are referred to as Common Property States, and the law there is that married people share debts–even after one of them dies.
Common Property States:
Other Things to Consider
Of course, if you took on a personal loan with a co-signer, or if there’s anyone on your joint accounts–whether you’re married, related, or not–then they will be responsible for your debt when you pass on.If you have any other questions about Personal Loans and Finance, be sure to check out my other articles here.