After cremations as part of the cremation services offered in Beltsville, MD, families of the deceased have to wrap up the affairs of their loved ones. One of those may be debts that are owed to creditors.
If you die with life insurance or valuable assets, then your family will be in a good financial position and will be able to take care of all your affairs. However, any debt that you have accrued doesn’t die with you. If the debts you have are substantial, then they could wipe out any financial security that you left behind to take care of your family.
If you don’t have life insurance or any valuable assets that could be sold, then your family may be responsible for paying off any debt that you leave behind. This could be a real quagmire for them and affect their financial outlook for years to come.
Almost 73% of adults have outstanding debts that need to be paid when they die. The average debt that includes a mortgage is $61,554, while non-mortgage debt averages out to be about $12,875.
The question become whether your loved ones inherit your debt when you die. In many cases, surviving relatives do not individually become responsible for paying off your debts. However, your estate, which includes life insurance, property, and financial assets, is responsible for settling all the debt that you owe. If the debt is secured, such as that with a car loan or a mortgage, then the car or home can be sold and the proceeds used to pay off the loans. The only other option for the estate is to allow the financial lender to foreclose on or repossess the property.
In the case where a family wants to keep the family home that everybody grew up in, the person in the family who gets the house will have to finance a new loan in their name, making them liable for the debt that they are incurring.
If debt is unsecured, such as credit cards or an unsecured personal loan, then the estate is responsible for paying those off with any money that the estate has before anyone is named as a beneficiary receives their inheritance. If the estate does not have enough money to pay off unsecured debt, then the estate is declared to be insolvent and the executor will have to go through the legal system – probate – for determination to be made as to which debts should be paid.
Any other debts than these are the sole responsibility of the deceased, so they get discharged (meaning they don’t have to be paid).
If the debt left behind has a cosigner who is still living, then the debt will be the cosigner’s responsibility to pay. On some cosigned loan agreements, the lender requires that the debt is paid in full immediately after the borrower dies. This can present a real challenge for cosigners, especially if they are not beneficiaries of the estate and don’t have the money on their own to pay the debt off.
For joint loans, such as a married couple taking out a mortgage together for a house, the borrower who is still alive is responsible for the remaining debt.
If you want more information about cremation services offered in Burtonsville, MD, you can talk with our expert staff at Donald V. Borgwardt Funeral Home, P.A. You can drop by our funeral home at 4400 Powder Mill Rd., Beltsville, MD, 20705, or you can contact us today at (301) 937-1707.