death is not a complicated issue since it is part of our culture. However, we are not always prepared for your arrival and this can trigger many emotional and economic complications. Next, I will tell you about some important points to consider in the face of such an unfortunate situation as the cancellation of a credit for death, among others.
Have you ever wondered what happens if the owner of a loan dies?
It is necessary to inquire between your documents, such as account statements or credit cards. Once you have the certainty if you had a relationship with a bank or financial institution, it will be time to get in touch with them.
It is better prevent:
Try to have a person (trusted) designated to have access to the necessary data and review your credit bureau and allow you to confirm what debts are pending settlement, as they will have the status of “active”.
What to do if there are active debts?
there is a total of 180 calendar days after the death of the holder of a debt, to notify financial institutions, although it is advisable to give notice as soon as possible, to avoid interest collection. It must be taken into account that each institution is governed by different terms and processes in these cases. That is the importance of reading carefully the clauses of contracts and notify the responsible person in time to avoid setbacks. Life insurance, the best option …
Nowadays, most financial institutions are implementing in their loans the contracting of life insurance. The debts that are protected by insurance of this type will be canceled when the owner dies.
It is necessary to take into account that it is necessary to present COPY of the corresponding documents, which are mainly:
- Death certificate of the holder of the debt
- Official identification of the owner
- And the identification of the responsible
The mortgage and automotive ask compulsorily acquire this type of insurance, but also being implemented in personal loans and credit cards. In this way, you can save your family many problems in case of death.
Are there debts that can remain active after the death of the owner?
The statastics indicates that there are specific cases in which a debt remains active:
- You assumed responsibility and signed as a co-holder of a loan.
- When the owner is married, the debt passes to the spouse.
- If assets such as homes or cars acquired through a credit are inherited.
- If you have signed an endorsement, you will be responsible for the payment.
- An executor is named in your will.
Concerns can be prevented thanks to credit protection through insurance, as we reviewed previously. In the case of credit cards , it is very important that the person who has been responsible interrupt the charges domiciled to the account and avoid the use of plastic, since, otherwise, the credit can not be canceled, since that the banking institution takes into account the date of death of the holder for the cancellation of the credit. If it is used after that date, the debt will remain active. Another reason that causes a debt to remain active even after the death of the owner is that the credit is more than three months overdue, so it is important to keep our financial health healthy.
Are there debts that must be paid on a mandatory basis?
If a house or car acquired through a loan and not protected by life insurance is left in inheritance, then the heir will not only receive the property, but also the debts. In this case, the person who inherits the assets has three possible scenarios in which he can decide what is best for him:
The heir assumes full responsibility for the property in question, so it becomes the holder of the debt and agrees to make the payment, even compromising the payment of this with their own assets.
The inheritance can also be accepted as an inventory.
This means that the inheritance is accepted, but after payment of the outstanding amount. That is to say, the financial institution will be charged the shortage of the credit and the rest will go to the heir. If the assets fail to cover the total debt, the creditors can not charge the heir, but he will not receive anything either.