Are debts inherited- Everything you need to know!

According to the law, heirs are only obligated to repay debts up to the worth of the property that they have inherited. Simply expressed, if you get an inheritance of $10,000, this is the highest amount of debt that you will be obligated to pay for the deceased's funeral expenses.

What debts are inherited?

Not all debts are passed on through families. For example, alimony or fines owed to the deceased are not required to be paid by the estate.

However, if you accept the bequest, you will be responsible for paying off the remainder of your obligations. The following fees will be due in particular:

  • Bank loan
  • A loan from a microfinance institution (MFI) or a credit consumer cooperative (CCC) is a type of financial assistance (CPC)
  • Utility bills
  • Accounts receivable

Furthermore, not only will it be essential to repay the principal obligation, but it will also be necessary to repay any interest, fines, or penalties that had accumulated by the time of the testator's death.

What is the best way to find out who a person owes money to and how much money they owe them?

A notary who is handling the inheritance issue will be able to assist you in determining whether or not a person owed money and to what degree. Upon your request, he will contact the credit bureau and the Federal Bailiff Service to obtain this information for you. He can obtain clarification from the Federal Tax Service as to whether the testator owes any taxes.

Inform the notary if you know which banks, microfinance institutions, or cooperative credit cooperatives the testator borrowed money from. He will be able to obtain information from these firms on an instantaneous basis, which will expedite the process of determining the number of debts owed.

Lenders may also choose to appear in person. If the borrower suddenly stops paying and the financial institution cannot find him, then it checks the information about whether the debtor is alive and whether someone opened his inheritance case. As a result, creditors will be able to present their claims on time, and heirs will be able to learn about the debts of the deceased before receiving their inheritance.

What should you do if you learn that you have debts after inheriting a property?

Counsel from the Federal Notarial Chamber clarifies that in this situation, the creditor has the right to present his claims to the heirs in whatever order, whether all at once or individually. Furthermore, he can split the debt among the heirs and require that each successor make his or her half of the installments. And if he does not get payment from one party, he has the authority to transfer the obligation to another party at his discretion.

In addition, it's important to note that each successor is only responsible for the debts of the deceased up to the value of the property that he or she has inherited from the deceased. For example, a bank may compel you to pay the remaining sum of your loved one's loan obligation - in order to avoid legal consequences. If the overall value of the bequest exceeds the whole value of the loan, the creditor simply writes off the rest of the debt as a loss.

When a creditor is unable to reach an amicable agreement with the heirs, he or she will most likely resort to going to court. Furthermore, he initiates a lawsuit against all of the beneficiaries of the estate who have refused to pay the bill as soon as possible.

For example, it is possible that you got an inheritance in equal portions with other heirs, but the creditor solely pursued his or her claims against you. In this scenario, your portion of the bequest surpasses the total amount of the debt, yet you believe it is unjust to be forced to pay the entire obligation on your own.

Instead of using a bank, microfinance institution, or other entity for the debt, you can pay off the debt for other heirs and then expect them to repay you for their portion of the obligation. This can also be accomplished in a court of law.

Is it possible for me to reject to take on other people's debts?

Yes. You must refuse to accept the bequest in order to do this.

If it was not you who initiated the inheritance case, you have the option of simply not going to the notary and without submitting any paperwork. However, in this instance, you should refrain from making use of the inherited feature. Furthermore, you are unable to do anything with it. 

For example, you may use it to settle bills for housing and common services for a deceased relative's flat, or you could use it to pay for repairs or to insure his automobile. It is important to note that if you fail to do so, it will be assumed that you accepted to inherit the property and all of its obligations, as stated by members of the Federal Notary Chamber.

If you have already applied for an inheritance, you have the right to alter your mind until you obtain a certificate confirming your ownership of the dead person's property. You must make contact with the notary who is handling the matter and submit an application for renunciation of the inheritance to them. This decision cannot be reversed at this point in time.

It will only be able to deny property after you have acquired inheritance rights through a judicial proceeding after you have acquired inheritance rights. In the case of underage heirs, their guardians have the authority to withhold inheritance - but only with the approval of the guardianship officials.

What is the best way to pay off debts inherited from family members?

A certificate of inheritance gives creditors the authority to seek payment from the heirs only after they have received a copy of the document. It will be required to return the debt in accordance with the payment plan that was initially stipulated in the agreement with the creditor in order to avoid further legal consequences. If you manage to agree on a temporary "freeze" of debt for a period until you have entered into an inheritance, the schedule will simply shift to this period.

Depending on your situation, you may find that the monthly installments are too expensive, or that you would want to return the loan sooner rather than later. Alternatively, you might negotiate a different repayment plan with your lender or refinance the loan in this situation.

It is critical to communicate with your creditor as soon as possible about any issues you are experiencing in repaying your debt. This will assist in resolving issues in a timely way and avoiding becoming enmeshed in debt.

Is it possible for debts to accumulate after the death of the debtor?

Even after the death of the borrower, financial institutions have the ability to charge interest on loans and borrowings they have made to him or her.

At the same time, the number of fines and penalties for late payments cannot be raised. On the day of a person's death, the creditor is required to determine the number of fines that will be charged. And he cannot collect fresh penalties until the borrower's inheritance, as well as his debts, are accepted by a third party.

It is preferable to call the bank, microfinance institution, or credit counseling center as soon as you learn that your loved one has continued to be in debt. You will be required to submit a death certificate and request that no fines be levied until the inheritance and financial responsibilities are legally passed to you.

If the creditor learned of the debtor's death late and was able to compute additional penalty interest, you have the right to demand that the interest be recalculated when you become the heir to the estate.


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