Usually the requirements to apply for a personal bank loan are not difficult to achieve, but what happens in case of death? Through the following guide we will tell you What happens if the holder of a loan dies Are debts inherited from parents to children? We will answer this and other questions below, in addition to what you should do.
The first thing is to notify the bank of the death of the debtor
Before anything else, it is imperative that the relatives of the deceased person notify the bank or institution of the death. In this way, the procedures related to the acquisition of the debt will begin, which is carried out in most cases as we will show you below.
In any case, before starting, it is very important that you bear in mind the importance of notifying these types of events. Don’t do it usually carries fines (depending on the types of personal loans offered by the bank and their characteristics). For this reason, the first thing is always to notify the bank of the death of the family member.
If the owner of a loan dies, who inherits the debt?
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It is very important to note that there are variants in relation to this problem, but most of them all lead to the heirs. Clearly, as you can imagine, the deceased’s will and those who are established there as heirs are taken into account.
In most cases, the heirs are the children or direct relatives of the person who dies. However, this is not always the case, because sometimes other people are taken into account to fulfill this role.
In any case, regardless of who the heir is, it is fair to point out that he will not only acquire the assets proposed within the inheritance, but also the debts of the deceased. In any case, there are certain conditions that must be taken into account in relation to inheritances.
Inheritances are not mandatory
There is a very relevant point that must be considered in relation to debts and that is that heirs are not required to accept the inheritance. In other words, there is the possibility of accepting the inheritance, which in turn would entail accepting the debts, but there are other possibilities.
The heirs can also reject the inheritance, this would also entail rejecting the debts, but clearly you cannot opt for the deceased’s assets. Similarly, there is the possibility of accepting the inheritance by subtracting the debts. Clearly, this last option is only possible if debts are less than assets.
There are some circumstances in which the deceased purchased life insurance. Depending on the nature of the insurance, this may be cover part or all of the debt. Clearly this depends on the conditions proposed by life insurance, but it is a good way to protect yourself against any eventuality, including death.
For this reason, it is very important to know the procedures to do in Social Security when a family member dies. Undoubtedly this can save us from very complicated situations.
Variations and other things to consider (The guarantors)
It is very important to note that the vast majority of banks require a person who fulfills as guarantor. That is, to take care of the debt in the event that the debtor cannot take over, something that also comes to the fore when the debtor dies.
In fact, in the first place, the guarantor will be responsible for paying the debt, therefore it is important to know the requirements that must be met to be a guarantor of a bank loan.
In conclusion, the responsibility it will fall to the heirs only if there is no guarantor. Similarly, when the loan was made by two people, it is considered that the debt is divided by 50% for each party.
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