– When someone dies, what happens to their direct debits and debts?

Question

When somebody dies, how do the companies and banks know, and what happens to their outstanding debts/payments?

For example, car insurance, direct debits for services, and what happens to outstanding balances on credit cards/loans and car financing?

In: 3

Answer 1

It’s up to the executor of their estate to cancel/close accounts, deal with cars, mortgages, etc. Any debts are paid from the estate before remaining assets are distributed to heirs. Some loans can be assumed if desired, ie. a spouse keeping house/mortgage or a kid taking over car loan. Many accounts/contracts can be cancelled w/ proof of death, unused portions of things like car insurance would be refunded on pro-rated amount.