How does debt work when the debtee passed away?

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How does debt work when the debtee passed away?

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3 Answers

Anonymous 0 Comments

All the stuff you owned becomes an imaginary entity called “your estate”.

Everybody you owed money in life gets in line, and the estate pays everyone until it runs out of money.  

 Some debts get to cut in line and others might be pushed to the back, and if the estate doesn’t run out of money, it goes to their heirs.

Anonymous 0 Comments

If the debtee passes away, the the loan giver will make claim to your assets. (Things you own, e.i. your House, Car, Guitar, and so on) these things will be sold for money and the loan will get first dibs on your cash, before your family gets a chance to take it.

Anonymous 0 Comments

It all depends on the laws wherever you live.

Broad strokes: in the US, when a person dies their remaining assets are used to pay any outstanding debts. After that, any remaining assets are distributed among the person’s heirs according to their will. It’s not generally possible for a person to inherit someone else’s debt unless they were a co-signer or something.