Originally posted 2012-01-30 15:57:48. Republished by Blog Post Promoter

One of the many things that we often worry about is debt. The amount of the debt may not always be very high yet the mere fact that we owe someone money can still cause us to get overwhelmed. Debts basically come with several questions in mind and not only “how to pay for debts” but also “what happens when you die – what becomes of your debts”? This may be a very common question that you can come across with because of the fear instilled within us that when someone we are related to dies and leaves behind a huge amount of debt then we could well find ourselves placed with the burden of paying for them.

Perhaps it may be because of hearing too much about people clamoring when someone close such as a spouse dies and leaves behind quite a number of financial obligations due to some creditors. Or maybe because debts for some reason simply give you much worry which is why people who are left behind can’t help but worry about paying more debts adding to their already existing list of personal debts to pay for.

So, what really happens to your debts when you die? They come buried with you, for the most part. When you die, your debt becomes part of your grave as well; that is if you do not have any estate to cover payment for some of your creditors. An estate may be well defined as the total asset left behind from your properties, investments or remaining funds and whatever other funds that may be collected upon your death like insurances and such. When you die in other words, creditors will get paid by getting the amounts due from this collection of funds prior the distribution of assets, properties, cash and investments to your heirs as explained here.

It should be left to the burden of the executor of the will to sell the deceased person’s properties in order to generate the fund needed to pay off his or her debts. This should ensure the heirs that what is left to be distributed amongst them would have to be clean fund or whatever may be left after dents are paid. The bad news for creditors however is when the deceased person dies broke hence not be with any estate nor the capacity to generate the fund for debt payments.

If the case however is that a property is bequeathed to a kin that is however collateral for a debt, the one who holds the property at present shall be held responsible with the debt such as a mortgage. All in all, debt is not as much of a worry for someone left behind by a deceased loved one particularly with fund to cover for the remaining debts.

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Filed under: Debt Collection Articles

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