What Happens to the Loan Debt of the Deceased Person?
In the Event that the Deceased Person Has Life Insurance For the Loan
First of all, it should be noted that one of the most important points in this issue is whether the deceased person had life insurance when using the loan. Getting insurance, especially when using a mortgage loan, is more important for loans that pay high amounts in such long maturities. Life insurance, which we consider as an extra expense when using a loan, becomes important in such a situation, and the debt of the deceased person is paid by the insurance. However, in the absence of insurance, these debts are transferred to the person’s heirs.
In Case You Have Life Insurance
Although life insurance is not required for loans, it is generally recommended to be made by banks. This insurance is carried out on your use of all types of loans, regardless of housing, needs or vehicle loans.
In fact, it will be the right choice for you to have life insurance. Because the main purpose of insurance is to be obliged to pay your debts. In other words, if a person who continues to have a credit debt loses his life, all debts are paid by the insurance company, except in some exceptional cases.
These exceptions are:
Suicide at the death of the debtor, etc. in case of a suspicious situation, the insurance may not pay. In such a situation, the insurance company may require an autopsy to be performed.
If the person using the loan has an existing disease at the time of making a life insurance policy, but this disease is not specified in the policy, but the insurance company determines that the disease is present in the person at this time, it will not pay.
Can the Loan Amount Paid Off Be Refunded Thanks to Life Insurance?
Can the amount of the loan paid back be refunded if a person who has taken out a loan by taking out life insurance dies before the installments are over yet?
The answer to this question can be taken as yes. Because life insurance is made for the total debt of the loan. In this case, after the remaining debt has been paid, the amount paid by the deceased person must also be paid to his heirs.
However, insurance companies may not be able to repay all or part of the “october loan installments” to heirs, citing additional contractual clauses. In this case, instead of accepting what the insurance companies are saying, it is definitely worthwhile for you to review the insurance contract or consult a lawyer who is an expert in the matter.
In order to receive this payment, you must; apply to the bank by one of the people who are in the probate office together with the death certificate of the deceased person or by someone who has been elected as a trustee. If the insurance company does not agree to make this payment, you can seek your right by legal means.
In the Absence of Life Insurance
If a person who has passed away before the credit debt has not yet ended has not taken out life insurance, his legal heirs must assume all his debts. Because the distribution made in cases of inheritance also applies to borrowing. If the heirs do not want to pay the loan debt, they have the right to refuse the inheritance by refusing the inheritance. In such a case, the liability of the deceased person for his debts will also disappear. If the deceased person does not have life insurance and has shown a guarantor for the withdrawn loan, in this case the guarantor is also followed up. If there is no guarantor, the way of collection from the heirs is chosen.
That is, just as the assets and receivables of a deceased person are transferred to their heirs, their debts are transferred in the same way. For this reason, it is an important issue to take out life insurance without considering it as an unnecessary expense when using a loan. If banks are unable to reach a conclusion on the heirs and inheritance for debts as a result of a person’s death, which occurred by normal means, the debt is considered the most recent sunken loan. In addition, if the cause of death is caused by natural disasters such as floods and earthquakes, banks may go on the path of completely erasing the debt in accordance with their policies.
What Happens to Credit Card Debt?
The same thing happens with a credit card as with loans. In other words, if there is a life insurance policy that the deceased person has made, the credit card debts are paid by the insurance company. In such a case, the amount that the insurance company will pay is the same as the amount of coverage reported in the policy. After the payment of the credit card debt is made on the amount of the deposit, the remaining amount, if any, is transferred to the relatives of the deceased person.
In this regard, what the heirs of the deceased person should do is to go to the bank branch with the death certificate of the deceased’s relatives and make them question the status of the debt. After that, the bank should be contacted with the documents if the insurance has been made by finding out if it has insurance. If the heirs do not want to pay this debt, they can also be exempt from paying the credit card debt by making a rejection-i inheritance.