What Happens To Your Credit Debt?
what happens with your credit depends on who is connected to your account.
For example, if you have a cosigner or a shared account, the other person
listed on the account is responsible for all of the remaining money owed, no
questions asked. In fact, that is one of the primary risks of being a
cosigner on an individual's line of credit.
are allowed to go after your estate. If you have a great deal of items you
owe, especially items that are still in debt (though homes, cars, savings,
etc. are considered part of your estate even if they have been paid for in
full) then banks will try to take what they are owed out of your belongings,
starting with any money you have saved and moving on towards what you
Credit agencies can and will do whatever they can to go
after the money that you owe. Their business depends on finding ways to get
people to pay back their debts regardless of financial status or, in your
(Note: There are a few exceptions. School
, for example, are void if you pass away. But if you have
refinanced the school loan under a new lender then the loan may still be
subject to collection). What Credit Agencies Can't
Despite being allowed to pursue what they are owed,
their scope only goes as far as you, your estate, and all those who have
cosigned onto an account with you. After that, they have no scope.
Many credit agencies, however, try to go beyond the scope and pursue
your family, claiming they can force your family members to pay back the
debt. This, however, is not allowed. Family members that are not part of a
joint account have absolutely no responsibility to pay back their loved one's
debts, regardless of the amount that they owe. Dealing with
The amount you owe is still outstanding, and
if you were hoping to pass a hefty inheritance to your family on your
passing, you will be unable to do so if the money you have saved is going to
be transferred to your creditors.
In addition, if your spouse was jointly invested
with you, she or he will still be subject to the debt repayment ,
and any money the two of you have saved for your passing will immediately
But at the very least, your family members are not forced to pay
back any debt or loans they did not cosign for. So make sure your family
members know that if a bank or lender tells them that they must pay it
back they know they do not need to pay it and need to send the bank the