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
So unless a family member chooses to take over the loans, the loans will all essentially go into default, and creditors get first dibs on your assets to make themselves whole. If you had a car loan, they’re gonna repossess that car. If you had a mortgage, they’re probably foreclosing on the home. If you had money in a bank account, they’re gonna take that.
If they take it all and there’s still outstanding debt, then they’re just shit out of luck, they eat the loss. Your surviving family members never inherit your debt unless they themselves were cosigners to the debt, or they choose to take over the debt, like if they lived in your house and they want to keep living in it. The flip side is that any inheritance you try to leave them gets eaten into by those creditors first.
(unless you bury a suitcase full of cash in the backyard and don’t tell anyone about it except them 😉)
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