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Monster
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Discussion Starter · #1 ·
Just wondering, does anyone know what happens to a person's debt if they die? Credit cards, student loans, etc?
 

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Just wondering, does anyone know what happens to a person's debt if they die? Credit cards, student loans, etc?
I don't know about credit card debt due to that is an unsecured loan. But I know secured loans can be taken from the deceased estate. That is what happened to my moms parent's. They sold the house to pay the debt.
 

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I think a court takes from your estate to pay off bills first. If you don't have any property or money then they go after co-signers to your loans (usually student loans have a co-signer). But the credit cards are unsecured and generally get wiped out. So it depends on the debt.
 

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Monster
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Discussion Starter · #5 ·
Good to know. Thanks.
 

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Any debt would be collected out of your estate. But if you have credit card debt & student loans I suspect that estate has basically no assets to collect from so your creditors will get nothing. After all, if you had much in the way of assets why would you have any credit card debt?

After my brother's death I was more than happy to provide all his creditor's with his wife's name & phone number so they could harass the hell out of her. She had money to pay the debts from life insurance and other assets she got upon his death and payment of those debts was her legal responsibility as a spouse.

I think a court takes from your estate to pay off bills first.
Not all assets pass through probate court. If I died I'd have no assets to probate. All my securities have a TOD registration (Transfer On Death -- where I name my beneficiaries). My checking accounts have a POD registration (Pay On Death -- same as TOD). My two life insurance policies have beneficiaries named as do my IRA accounts. Those simply pass to a beneficiary as quickly as they can show the company holding the asset a death certificate.

I own no real estate nor car, so the rest of my estate consists of my personal belongings which have a fair market value of basically zero. In the real world the way such personal belongings get divided up is whoever gets there first gets it.
 

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Monster
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Discussion Starter · #7 ·
Alright, here's another one: If you have consolidated your loans, do the original cosigners still apply?
 
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