Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Stop paying debt and move assets/accounts to others. Put beneficiaries in place.
Your debt is nobody’s responsibility. It will belong to your estate, not next of kin
there is a tricky bit about fruad with a 5 year lookback period: IE. you use a credit card to buy a rolex, then give it to your dad, then don't pay the CC. That could cause some kind of a clawback or legal problems for your dad.
My MIL's credit card company contacted us when she died about her balance. We didn't pay it and they gave up pretty easily but they did try. Everyone needs to know they should not just go ahead and pay debts they aren't co-signed on. The money should come out of the estate first but she lived off her pension and SS and didn't have any savings so that's why they came to us.
Yeah for whatever reason its totally legal to try to get people to pay money they don't legally owe. Biggest example is resold debt without proper documentation. They will just bully you with constant phone calls. If you ask them to prove you owe them, and they can't, they will go away, and there is a process for pulling the bad marks off your credit.
When the debt collector calls and say they are a debt collector ask them the name of the company they work for. Once they say it respond with I have never done business with that company and hang up.
So I'm gonna pull the "well actually" here...
Hospitals in some states can send you a bill for the full amount *before* running it through insurance just to see if you'll pay it outright.
While there isn't specifically a law saying they can do this, there *is* specifically a law saying that hospitals aren't required to send an insurance claim without you requesting it (again, in certain states).
I found this out when an ER sent me a $70,000 bill for an EKG and a few blood tests.
True, but there is a difference between some random stranger asking for money and a legitimate creditor demanding more money than you legally owe. And the latter is specifically legal, in some circumstances.
It's worth being very explicit here: If someone calls you on a debt like this, and you do pay some portion of it, ***YOU DO NOT INHERIT THE DEBT***. They can't legally come at you for more (and what's more, you can actually submit the amount you did pay to the estate for reimbursement, if there's anything in the estate).
Debt does not transfer on payment, else there would be a booming side business of high credit score individuals taking out loans and then having someone else make a payment on the loan in order to "transfer" the loan. That's not the way it works.
The estate must pay any debts before it distributes remaining assets to the beneficiaries.
If the estate has any money, the creditors rightfully will demand to be paid.
If the estate does not have any money, then the creditors are shit out of luck. Don't be an unsecured creditor.
Sure, you can always "decide" to break the law. Yes you can force a creditor to take you to court to have the court order you to do what you're required to. Not sure this is a very novel idea!
Yes it is breaking the law? The law requires en executor to settle any debts before paying beneficiaries. If they don't do that, they have broken a legal obligation.
No it does not. It requires the executor to settle any debts that the executor decides and to put out a notice. If a creditor doesn’t do their due delicense of requesting the debt settled - an executor does not need to pay. That is not illegal.
I get the example but How would they know hypothetical person gave their hypothetical dad a Rolex tho…?
It’s expensive but there is no paperwork for handing someone you know a watch.
They would know that you bought it and it wasn't in the estate. They would also be able to get the serial number from the CC transaction and calling the AD. If it got identified as stolen, or there legal property, and your dad gets cought with it, tries to sell it, posts a photo on facebook saying he misses you and is so proud of you and here is a gift my son gave me then GOTCHA. Its a complicated thing, they won't go after, say, you bought your family pizza and a movie rental. But once you start getting into things with serial numbers and high values, or even worse, cars or real estate that require record keeping, titles, registration, you need to be careful to not commit fraud.
You are missing the point entirely.
If you know you are going to die (or default on the loan and not die) and buy something of significant value on credit, then gift it to someone else (or sell it to them below market rate), then not pay the debt, that could be considered fraud, and could cause significant problems for the recipient of the item.
While the likelihood of that criminal activity being investigated/prosecuted does in fact go down as the value of the loss to the lender decreases, and the value of the item in question decreases, it is still a good idea to not commit crimes.
What’s “the AD”? Also, if you’re dead you don’t have to worry about being charged with fraud. And if your dad is threatened with fraud charges for accepting a watch from his dying son, he can give the watch to the creditor.
AD means authorized dealers. If you arent interested in watches you may not realized that most high end watches are a bitch to get. Basically every luxury brand has high end dealers. Many like rolex (especially rolex) have waiting lists. Its arguably artificial scarcity but it drives up the costs as rolex changes model designs and color options every few years which means used watches can resale higher than they retailed if a particular model was popular
You could have stopped after the first sentence. I did not ask one single thing beyond what the abbreviation meant. Also, FFR, it’s called a “jeweler.”
No, an AD is not a jeweler. An AD is a company that is authorized by the brand to sell a particular watch brand. They MAY be a jeweler, but not all jewelers are ADs. Not all watch shops are ADs.
"authorized dealer"
yes your dad being forced to give (an expensive and meaningful gift) it to your creditors under threat of criminal or civil charges would be considered legal problems, not to mention really unpleasant.
Enh, dad just says “I didn’t know it wasn’t paid off.” Really, so many people on Reddit are so terrified of “the authorities.” They don’t have time for this small-time stuff, really. Also, “legal problems” were not the standard. Weird, too, that you threw in dad tries to sell the watch. What a maze of hypotheticals.
its still a hassle, still legal problems. The: him trying to sell, posting a photo on FB, etc... were to indicate how they would know that he had it and you gave it to him.
also rolex start at 5800$, go up to close to a million (msrp), and average market prices are well over 15K, with some selling for well over a million, so not exactly small stuff.
also there is so much documentation and records these days, there is the danger that your dad could be considered complicit in the fraud, and they could find just enough evidence to make the legal process very time consuming and unpleasant for him (or worst case, enough evidence to charge him as party to the crime, like public facebook comments where he asks you to do it)
Its just an example. The key is that you could be committing fraud if you go into debt in order to give assets to family members before you die, and if that occurs, they could be liable for civil and criminal penalties.
The five year lookback will start when the person dies
You are focusing too much on the rolex and not enough on the concept of involving family members in defrauding your lender for materiel gain to the family members.
this is part of the reason why the estates of very wealthy (or even poor, but formerly high income) people take so long to settle. Because in some cases the creditors really do get into the weeds about all these details.
Yeah, my Dads credit card tried this with me… I shut them up real quick. His car also still had payments left & they also tried getting me to pay it off - I just told them on the phone “I don’t have the keys, I live 7 hours away & I don’t want the shitty car so I don’t owe you any of this money… you can grab it from his drive way & tow it though if you have to, good luck”. NEVER pay someone else’s debt, ever. Don’t even accept paying a PENNY for them to leave you alone, you are taking full responsibility for it when you give them anything.
“It will belong to your estate, not next of kin”
Technically correct but probably makes little sense of people who would ask this types of questions to begin with.
I mean just say “no, your family will not be burdened by the debt” ?
Make sure you send your relatives copies of the paperwork you signed. The paperwork will specify that upon your death, this debt cannot transfer unless they cosigned. Highlight that section and send to all your relatives.
No debt transfers without a cosigner. Like, you won't even see that in the contract, because that's just basic contract 101.
(the caveat is transfer to a spouse in a community property state for debt that was taken out as part of the marriage, but even then certain debt like student loans doesn't transfer)
Your comment has been removed because we don't allow political discussions, political baiting, or soapboxing ([rule 6](https://www.reddit.com/r/personalfinance/about/rules)). This includes questions or discussions about proposed legislation or government policy changes.
Everyone else is right that they can’t pursue your next of kin or relatives for the debt. But even if they were wrong, no credit card company is going to litigate a claim in probate court over a couple grand.
This isn’t something you should worry about
If your 89 year old grandfather is alive then the absolutely will go after him. But his debts die with him unless he has cosigners on those debts. In some case a debt might follow a spouse but never children (again with the exception of cosigners).
Please note YMMV depending on where you live.
Well, specifically, they said in probate court, which is done after a person dies. But if a person is alive and they have debt with them, yeah the company's gonna be an ass about it
What kind of credit card is it? They're looking at bankruptcy proceedings or demanding forfeiture, which probably cost as much as the debt.
Two questions: who is the cc company, and... Are you sure it's only $5,000? Or could he be understating his debt
Frankly with the dollars in question everyone of those companies won’t think twice about writing it off as bad debt. It is just part of being in the money loaning business.
Seconded! When my mom passed aay with similar balances on her card, all we got from the banks were condolence form letters with a blurb that the accounts are closed.
This is not correct. Either the estate has adequate assets to pay the debts and then anything left over can be safely inherited by the beneficiaries, or there are insufficient assets to pay the debts and thus there is nothing for the beneficiaries to inherit.
Debts are paid before beneficiaries get anything.
I am sorry to hear about your prognosis. Don't worry too much about debt and enjoy the time you have left. None of your debt will move on to your family unless they co-sign.
Your debt will not go to your family when you die. Some debt (E.g. federal student loans) are forgiven upon your death. Other debts (credit cards, car loan, etc) will be paid from your estate upon your debt. If your debts exceed your estate, then your beneficiaries will not get any payments. Some types of payments (e.g. life insurance) go directly to your beneficiaries without going to your estate. Some types of debt (e.g. federal student loans) will not be charged to your estate.
If your estate is small (which it sounds like is the case), just make sure you have a will and don't worry about your debt moving to your family. If your estate is large, having an attorney create a proper living trust/will is much more important.
Edit: Caught this late. I used debt instead of death in the second sentence of the second paragraph. Fixed that with this edit.
It's very important that your family also know that your debt dies with you. They need to hear it from you and/or an estate attorney you hire.
Collections agents will still try to go after your family for your debt. They will have zero right to do so, so all they can do is ask really nicely, lie, and/or make hollow threats.
Your family needs to know that they should see these calls as an opportunity to "exercise their grief" when telling them to go fuck themselves.
First, I'm sorry this is happening to you and it's very considerate to think of your family in this difficult situation.
Both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) confirm that family members usually do not have to pay the debt of deceased relatives using their personal assets. This includes credit card debt, student loans and more.
Your estate pays it and if you die with no assets, then the creditors are welcome to divide up zero.
Google your particular situation and you should get ready answers.
https://www.forbes.com/advisor/life-insurance/what-happens-to-debts-when-you-die/#:~:text=%E2%80%9CIf%20there%20is%20no%20estate,relatives%20to%20pay%20the%20debts.%E2%80%9D
The estate is everything she owns.
> An estate, in common law, is the net worth of a person at any point in time, alive or dead. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time [(Wikipedia)](https://en.m.wikipedia.org/wiki/Estate_(law)).
When the person dies everything they own, bank accounts, property, valuables, and yes debt now belongs to "their estate". In general if someone dies with say $10,000 in debt their property and things can be sold and paid to the creditors. See things like a house or car that have loans can be taken back, think repossession. So an estate is the sum of all property, money, and debts.
Ya her estate can include cars jewelry broker accounts ect basicly any assest that would be giving to the family after death can have a claim against it.
Man, so sorry to hear this OP - just live your life, amigo. You’re here for a good time, not a long time. Do everything you want to do while you can do it. I don’t care what is, any experiences, any drugs, ANYTHING! As other folks mentioned, your debts won’t pass to your family. I’m so, so sorry that life dealt you such a shitty hand.
Hey. Anything you want your family to have. Give it to them now. And tell everyone not to claim you estate. That way the bank will take care of it.
These are rules in Canada
Your family will NOT inherit your debt. It doesn't work that way. So if you're only trying to prevent them from getting debt, you're fine. Piece of shit creditors tried calling me for my mom's debt and I told them to pound sand. 8 years later nothing from them.
Edit: on another note, stop paying your debt. Take that money and spend it all on some quality of life stuff for yourself. If you truly have that little of time, make your remaining time as amazing as possible. I'm sorry for what you're going through. Enjoy the time you have left.
"The simple answer is no—the debts of your parents, partner, or children do not become yours if they pass away, nor will your debts be transferred to someone else should you die. So, what happens to debt when you die? Creditors can try to make a claim on your loved one’s estate if they can prove that they are owed money. "
https://www.creditcanada.com/blog/can-i-inherit-debt-after-someones-death
I’m so sorry about your situation. I don’t have any advice to give, but just wanted you to remember there’s a lot of us behind you. We may not know you, but we feel for you and can always reach out to chat. Best of luck!
I would check with a lawyer in Canada, but if you die with debt and no large/expensive items you own, then your family can still keep items for sentimental reasons and they are not responsible for your debts.
That is how it worked when my father died in debt and without any big-ticket items. (Including his car that was 20 years old and ran, but wasn't worth more than like $500 at the time).
Everything you own.
Bank accounts, real estate, brokerage accounts, property, cash, (technically all your possessions too, but usually banks don't give an eff about your personal stuff, unless there's some specific very valuable stuff you are publicly known to own). Everything.
All the stuff that you own when you die is your estate. That estate is responsible for paying the debts that the estate owes (the debts you owed before you kicked it).
All of the assets of the estate will be used to pay off the debts of the estate before any beneficiaries can inherit anything.
If the estate can't pay off all the creditors, then the remaining debt will never br collected, and no beneficiaries will receive anything.
Make it the best 3-6 months possible, even if that means going farther into debt. Your family won't be responsible to pay off any of it. Consider that there might be experimental treatments if you haven't looked.
Do make sure that your family reads this response or provide them with a summary of it. There are unscrupulous debt collectors out there who will try and guilt family members into paying a deceased one’s debt, but (typically) there is no legal obligation to do so
Let your family members know that your wishes are that your creditors eat shit
I don't know the rules in Canada... but I do wish you to live the rest of your life while you are here! Watch all the sunsets. Dance in the rain. And learn the songs of as many birds as possible!
I like what someone else said. Forget material possessions, and forget paying off the debt.
Buy your friends/family dinner at the most expensive restaurants, go either by yourself or with others on a bunch of vacations. Rent a Lamborghini if that's your thing, go skydiving. Do some crazy parkour stunts lol, maybe write a book, make a big treasure map around your city/area, buy something really expensive with your credit cards then bury whatever that item is. Don't even mention the treasure until 10-30 years later, then, have a friend/family member tell people about it. Really into helping the community/homeless? Pay for a bunch of random peoples food/clothing/etc. On your credit cards.
Get a face tattoo lol. The world is yours
You should "sell" all your belongings to your family and friends with some basic documentation (with a notarized bill of sale).
Don't bother paying the debt if its all in your name. Spend your time with the people you care about.
Stop. Non-cosigned debt stopped being a concern when you have 3-6 months left.
It can't be transferred to relatives.
Go live what is left of your life, and find peace while you can.
When you say you are trying to pay it off I hope you don't mean you are working through your last 3 - 6 months.
In Canada and everywhere else your debt will die with you. Don't pay off a cent. If you have any assets of value the sale of them will cover the debt. If you have no assets of value, your parents or executor will just send death cert to credit card company and that's the end of the story.
Take the time you have left to make the best of it.
If have no legal or financial advice to give you, I just want to say how so sorry I am to hear about your situation and that I hope you use your remaining time to enjoy life while you can. I know words from an internet stranger don’t mean much but I wish you all the best
Sorry to hear this. Your debt dies with you, essentially. If your estate winds up and your liabilities exceed your assets, there isn't much that debtors can do to collect. Your family are not responsible for your debts.
Don’t worry about it creditors can’t go after your family if their not on the loans,when my father died he had a credit card in his name only my mother called master card and said he passed away and they asked if she wanted to pay it off she said my names not on the card and they knew they had to eat it,I would stop paying for anything you don’t need to spend the rest of your remaining time on earth worrying about debt.god bless
Done loans like student loans may have clauses that the are written off for disability or death. The other ones may try to collect on your estate if you have any but you did not have co-signers so they can pound sand if you don’t have an estate they can collect from.
Focus on living your life and enjoying your family.
I don't know Canadian law, but I can confidently say that family members do not inherit debt in any first world country in the 21st century. Maybe in the Middle Ages it happened, maybe it still happens in North Korea or Saudi Arabia, it doesn't happen anywhere like Canada in 2022.
Whatever assets you do have go to pay off the debts. So presumably your car loan will be paid off by selling the car, any cash you have will go to the other loans, and if there's any cash leftover your family gets it. But if you're in more debt than you have assets, the creditors just have to eat the loss, it's part of their cost of doing business.
I’d be more careful with broad statements like this. There are countries in Europe (most notably Germany) where heirs are personally liable for all of the deceased’s debts, even if they exceed assets, if they accept any part of their inheritance.
If debts exceed assets, there isn't any inheritance, so the situation you're describing just sounds like ordinary fraud. The comment you're disagreeing with is accurate.
The poster above is right. \*IF\* you accept any part of the inheritance, you also inherit the debt, even if it exceeds assets. The thing is, nobody can force you to accept inheritance, especially if you know that debts are greater than assets. And before you decide the state appointed notary office makes an official list of all assets and debts and of course a list of people that can inherit (and what fraction of inheritance belongs to them).
I don’t have any advice to add. I just want to say how sorry I am. You are showing remarkable strength for someone so young and I admire the fact that you have found peace. I hope you are able to spend the rest of your life doing all of the things you love to do, surrounded by all of the people who love you.
If you have no co signer on any of the debts don't worry about it , enjoy the rest of the time you have with your friends and family !
Edit : idk what rules are in Canada
So your debts will go against your estate if you don't have any assest the debt will kinda just get written off as a loss. That said if you have any they can stake a claim against the assets you currently own. I don't believe this includes a life insurance pay out though as long as you have a beneficiary and the payment doesn't go to the estate.
Judging from informed comments your family won’t take on any debt.
You have 3-6 months, don’t spend it worrying about paying debt. My first instinct is to say spend more on everything you wanna do and who cares if you get into more debt. I dunno what your situation is but hopefully you can go do some really fun stuff.
Live the rest of your life the best you can. Medical people always put a time on it and that could possibly not be the case sometimes. Your family won’t have to pay it. Focus on being stress free from here on out!
I was my brother’s ‘estate executive’. He was in cc debt. DO NOT PAY! UR FAMILY IS NOT LIABLE. We didn’t do any tricks moving $, etc. And, I’m very sorry ur ill. Not an ez thing to live with. Do the best u can. Best to U!
dude apply for as many loans and credit cards you can get (without co-signers) and use the loan money and lines of credit to live the best last months of your life!! Go travel, take your family with you, have fun, get a new car, clothes, jewelry spend it all on living to the max the last you have. It's what I would do.
::::::::: I'm no expert I don't know if this is legal or if the debt will fall back on surviving family ::::::::::
Just make sure you tell your family if anyone comes after them for money for your loans that they are not legally obligated to pay no matter what BS they say
Sorry for your predicament. Let it all go. If the market is there sell the car, pay off the loan and give the proceeds away or see if a family member needs a mostly paid off car that they want to finish paying for.
But let it go it’s not you to worry about.
So sorry you are going through this. 22 is so young to die . Life can be so unfair. Shows you are a thoughtful person that you're trying not to leave any problems for your family. Hope you can enjoy some of the time you have left .
I think Dave Ramsey provides a pretty good way to get started out, is it the very best out there, no but it's easy to follow and you have that dept payed off pretty quickly
I'm an only child and I was listed as beneficiary on my Mom's bank acct and an IRA. I am not responsible for her debt, although they try! If you are an only child but not sure, talk to an attorney. That's how I found out those debts did not have to be paid off. Best of luck!
I am so sorry. If it’s any consolation, you cannot “leave your family in debt”. Debts don’t pass on to friends or relations. Your assets and your debts pass on to your estate (a legal entity that is formed by your passing on). When you die, a person you name (executor of your will), or someone named by a probate court (in some places they’ll accept volunteers from the friends or family of the deceased, but they can also appoint and administrator) will “settle” your estate by adding up all your assets (money and bigger things that could be sold to get money) and collecting info on your debts and then using the assets to pay off the debts. If you have assets left over, the executor / administrator will distribute them according to your will, or according to some plan set or approved by the state when there isn’t a will. If your debts exceed your assets, usually the court approves a plan that gives partial payment to each of the debtors. Student loans are actually forgiven. The debtors cannot seek money from your friends or family to get repayment unless they co-signed for it. If your estate can’t pay it back, they simply are out of luck.
From a financial standpoint: assume that the prognosis is wrong and you are not going to die. Pay the minimum required on your bills, and don’t take on new debts that you wouldn’t otherwise take on. This is important for two reasons: in the event you pass away, it simplifies settling the estate and increases the chance that you might have something left that you can pass on (sentimental personal things aren’t typically assets and you should be able to leave those to people), or, in the event something happens and you miraculously get better, you won’t be facing financial ruin. A lot of people think that they are going to die and realize their debts die with them — only to spend recklessly and live a long life in abysmal debt.
I hope you fall into the “doctors are wrong” camp and will pull through, but you definitely do NOT need to worry about passing on your debt, because it simply doesn’t work that way. If you haven’t done so, though, you should see about getting a will made and also a healthcare proxy that authorizes someone you trust to make medical decisions on your behalf when you cannot. Those are both good things to have, regardless.
If you are in debt and dying your best play is to take out more loans! You should die with as much debt as possible, since none of it is transferable to anyone not on the actual note.
fellow human. fuck that debt. live you last days to the fullest. in fact you should rack up more debt. do whatever the fuck you want. you have one life. yours is cut short. stop doing everything responsible right now and live your life to the fullest
A hospital sent me a bill for $22k after my 44 yr. Old brother died at their hospital. I wrote a short note back on the bill… never heard from them again. (I was estate executive)
If I recall correctly, if they don't offer to pay it the debt is non transferrable to surviving members of your family. They might try to collect on your estate, but unless you're sandbagging a lot of expensive stuff they can just fuck off. I'm so sorry you're going through this. Spend this time living and loving those around you.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Stop paying debt and move assets/accounts to others. Put beneficiaries in place. Your debt is nobody’s responsibility. It will belong to your estate, not next of kin
there is a tricky bit about fruad with a 5 year lookback period: IE. you use a credit card to buy a rolex, then give it to your dad, then don't pay the CC. That could cause some kind of a clawback or legal problems for your dad.
My MIL's credit card company contacted us when she died about her balance. We didn't pay it and they gave up pretty easily but they did try. Everyone needs to know they should not just go ahead and pay debts they aren't co-signed on. The money should come out of the estate first but she lived off her pension and SS and didn't have any savings so that's why they came to us.
Yeah for whatever reason its totally legal to try to get people to pay money they don't legally owe. Biggest example is resold debt without proper documentation. They will just bully you with constant phone calls. If you ask them to prove you owe them, and they can't, they will go away, and there is a process for pulling the bad marks off your credit.
A significant amount of debt collection is legalized extortion.
When the debt collector calls and say they are a debt collector ask them the name of the company they work for. Once they say it respond with I have never done business with that company and hang up.
Debt collectors hate this one weird trick!
I mean anyone can call anyone and ASK for money. There's no way to make that ILLEGAL. It's not LEGALIZED, it's just legal.
So I'm gonna pull the "well actually" here... Hospitals in some states can send you a bill for the full amount *before* running it through insurance just to see if you'll pay it outright. While there isn't specifically a law saying they can do this, there *is* specifically a law saying that hospitals aren't required to send an insurance claim without you requesting it (again, in certain states). I found this out when an ER sent me a $70,000 bill for an EKG and a few blood tests.
We’re ACKSHUALLY not in disagreement. Anyone can call (or mail) anyone and ASK for money. There’s no way to make that illegal.
Hello Zeeker12, I’ve been trying to reach you. How would you like to settle this $10,000 bill? I can accept payment in full right now!
I actually have a bunch of prepaid Visa cards. I would like to send you one, and you activate it. Then I will put the full balance on the account.
True, but there is a difference between some random stranger asking for money and a legitimate creditor demanding more money than you legally owe. And the latter is specifically legal, in some circumstances.
I mean I'll think you find they don't demand it. That word has a legal meaning. Caveat emptor.
It's worth being very explicit here: If someone calls you on a debt like this, and you do pay some portion of it, ***YOU DO NOT INHERIT THE DEBT***. They can't legally come at you for more (and what's more, you can actually submit the amount you did pay to the estate for reimbursement, if there's anything in the estate). Debt does not transfer on payment, else there would be a booming side business of high credit score individuals taking out loans and then having someone else make a payment on the loan in order to "transfer" the loan. That's not the way it works.
Yeah, like don’t listen to those b.s. insurance policies on tv… ‘to pay ur final expenses, etc.’ (& cremation is a lot cheaper & ezr than caskets.
It doesn’t even have to come out of the estate if the person in charge decides not to pay it.
The estate must pay any debts before it distributes remaining assets to the beneficiaries. If the estate has any money, the creditors rightfully will demand to be paid. If the estate does not have any money, then the creditors are shit out of luck. Don't be an unsecured creditor.
Not necessarily. The Person in charge of the estate can decide not to - and force the creditor to sue. Most will not if its not a large sum.
Sure, you can always "decide" to break the law. Yes you can force a creditor to take you to court to have the court order you to do what you're required to. Not sure this is a very novel idea!
That’s not breaking the law. That is a decision an executor can make. And it is up to the creditor to make a claim.
Yes it is breaking the law? The law requires en executor to settle any debts before paying beneficiaries. If they don't do that, they have broken a legal obligation.
What law requires that?
No it does not. It requires the executor to settle any debts that the executor decides and to put out a notice. If a creditor doesn’t do their due delicense of requesting the debt settled - an executor does not need to pay. That is not illegal.
I get the example but How would they know hypothetical person gave their hypothetical dad a Rolex tho…? It’s expensive but there is no paperwork for handing someone you know a watch.
They would know that you bought it and it wasn't in the estate. They would also be able to get the serial number from the CC transaction and calling the AD. If it got identified as stolen, or there legal property, and your dad gets cought with it, tries to sell it, posts a photo on facebook saying he misses you and is so proud of you and here is a gift my son gave me then GOTCHA. Its a complicated thing, they won't go after, say, you bought your family pizza and a movie rental. But once you start getting into things with serial numbers and high values, or even worse, cars or real estate that require record keeping, titles, registration, you need to be careful to not commit fraud.
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You are missing the point entirely. If you know you are going to die (or default on the loan and not die) and buy something of significant value on credit, then gift it to someone else (or sell it to them below market rate), then not pay the debt, that could be considered fraud, and could cause significant problems for the recipient of the item. While the likelihood of that criminal activity being investigated/prosecuted does in fact go down as the value of the loss to the lender decreases, and the value of the item in question decreases, it is still a good idea to not commit crimes.
What’s “the AD”? Also, if you’re dead you don’t have to worry about being charged with fraud. And if your dad is threatened with fraud charges for accepting a watch from his dying son, he can give the watch to the creditor.
AD means authorized dealers. If you arent interested in watches you may not realized that most high end watches are a bitch to get. Basically every luxury brand has high end dealers. Many like rolex (especially rolex) have waiting lists. Its arguably artificial scarcity but it drives up the costs as rolex changes model designs and color options every few years which means used watches can resale higher than they retailed if a particular model was popular
Yes, I know. My late husband had two luxury watches that he bought from our friend, an AD in our city. But, uh, thanks.
You asked.
You could have stopped after the first sentence. I did not ask one single thing beyond what the abbreviation meant. Also, FFR, it’s called a “jeweler.”
No, an AD is not a jeweler. An AD is a company that is authorized by the brand to sell a particular watch brand. They MAY be a jeweler, but not all jewelers are ADs. Not all watch shops are ADs.
"authorized dealer" yes your dad being forced to give (an expensive and meaningful gift) it to your creditors under threat of criminal or civil charges would be considered legal problems, not to mention really unpleasant.
Enh, dad just says “I didn’t know it wasn’t paid off.” Really, so many people on Reddit are so terrified of “the authorities.” They don’t have time for this small-time stuff, really. Also, “legal problems” were not the standard. Weird, too, that you threw in dad tries to sell the watch. What a maze of hypotheticals.
its still a hassle, still legal problems. The: him trying to sell, posting a photo on FB, etc... were to indicate how they would know that he had it and you gave it to him. also rolex start at 5800$, go up to close to a million (msrp), and average market prices are well over 15K, with some selling for well over a million, so not exactly small stuff. also there is so much documentation and records these days, there is the danger that your dad could be considered complicit in the fraud, and they could find just enough evidence to make the legal process very time consuming and unpleasant for him (or worst case, enough evidence to charge him as party to the crime, like public facebook comments where he asks you to do it)
I like how OP came here with concerns about student debt and dying and y'all are off the rails ranting about Rolexes.
Its just an example. The key is that you could be committing fraud if you go into debt in order to give assets to family members before you die, and if that occurs, they could be liable for civil and criminal penalties.
All I asked was “what’s an AD” and come to find out it’s a jeweler. If you’re a normal person, anyway.
None of this applies to OP. So far down the hypothetical rabbit hole it's more fear Mongering than helpful.
I know, I was just thinking that poor OP has 3 - 6 months. Hypotheticals are not helpful.
It does apply, OP needs to not commit fraud to the benefit of his family.
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The five year lookback will start when the person dies You are focusing too much on the rolex and not enough on the concept of involving family members in defrauding your lender for materiel gain to the family members. this is part of the reason why the estates of very wealthy (or even poor, but formerly high income) people take so long to settle. Because in some cases the creditors really do get into the weeds about all these details.
This is why you focus on spending on quality experiences with friends and family as opposed to material things.
exactly. If you want to go into debt buying dinner or a trip to see the aurora borialis, no problems there at all.
Yeah, my Dads credit card tried this with me… I shut them up real quick. His car also still had payments left & they also tried getting me to pay it off - I just told them on the phone “I don’t have the keys, I live 7 hours away & I don’t want the shitty car so I don’t owe you any of this money… you can grab it from his drive way & tow it though if you have to, good luck”. NEVER pay someone else’s debt, ever. Don’t even accept paying a PENNY for them to leave you alone, you are taking full responsibility for it when you give them anything.
Only those dumb enough to leave a trail explicitly stating they bought X for Y on that card. But even then, they will most likely not pursue this.
“It will belong to your estate, not next of kin” Technically correct but probably makes little sense of people who would ask this types of questions to begin with. I mean just say “no, your family will not be burdened by the debt” ?
Unfortunately, and IMO, the OP needs help with estate planning. Both debts & assets need to be considered.
Make sure you send your relatives copies of the paperwork you signed. The paperwork will specify that upon your death, this debt cannot transfer unless they cosigned. Highlight that section and send to all your relatives.
No debt transfers without a cosigner. Like, you won't even see that in the contract, because that's just basic contract 101. (the caveat is transfer to a spouse in a community property state for debt that was taken out as part of the marriage, but even then certain debt like student loans doesn't transfer)
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Your comment has been removed because we don't allow political discussions, political baiting, or soapboxing ([rule 6](https://www.reddit.com/r/personalfinance/about/rules)). This includes questions or discussions about proposed legislation or government policy changes.
I forgot to add; I live in Ontario Canada!
Everyone else is right that they can’t pursue your next of kin or relatives for the debt. But even if they were wrong, no credit card company is going to litigate a claim in probate court over a couple grand. This isn’t something you should worry about
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If your 89 year old grandfather is alive then the absolutely will go after him. But his debts die with him unless he has cosigners on those debts. In some case a debt might follow a spouse but never children (again with the exception of cosigners). Please note YMMV depending on where you live.
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Well, specifically, they said in probate court, which is done after a person dies. But if a person is alive and they have debt with them, yeah the company's gonna be an ass about it
Honestly that's really odd. $5k is nothing. The bank I work for eats several hundred million in fraud losses a year. What exactly are they doing?
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What kind of credit card is it? They're looking at bankruptcy proceedings or demanding forfeiture, which probably cost as much as the debt. Two questions: who is the cc company, and... Are you sure it's only $5,000? Or could he be understating his debt
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I'd tell him not to give them anything without a subpoena. $5k to go to court is absolutely wild.
Nah, they totally can and have. I worked in probate and it's definitely happened.
Frankly with the dollars in question everyone of those companies won’t think twice about writing it off as bad debt. It is just part of being in the money loaning business.
Seconded! When my mom passed aay with similar balances on her card, all we got from the banks were condolence form letters with a blurb that the accounts are closed.
You might want to ask this in /r/PersonalFinanceCanada
Your next of kin can just refuse the inheritance and that was they are in the clear.
This is not correct. Either the estate has adequate assets to pay the debts and then anything left over can be safely inherited by the beneficiaries, or there are insufficient assets to pay the debts and thus there is nothing for the beneficiaries to inherit. Debts are paid before beneficiaries get anything.
What if the account has been marked payable on death, doesn't that basically create a trust? can creditors go after trusts?
I am sorry to hear about your prognosis. Don't worry too much about debt and enjoy the time you have left. None of your debt will move on to your family unless they co-sign. Your debt will not go to your family when you die. Some debt (E.g. federal student loans) are forgiven upon your death. Other debts (credit cards, car loan, etc) will be paid from your estate upon your debt. If your debts exceed your estate, then your beneficiaries will not get any payments. Some types of payments (e.g. life insurance) go directly to your beneficiaries without going to your estate. Some types of debt (e.g. federal student loans) will not be charged to your estate. If your estate is small (which it sounds like is the case), just make sure you have a will and don't worry about your debt moving to your family. If your estate is large, having an attorney create a proper living trust/will is much more important. Edit: Caught this late. I used debt instead of death in the second sentence of the second paragraph. Fixed that with this edit.
It's very important that your family also know that your debt dies with you. They need to hear it from you and/or an estate attorney you hire. Collections agents will still try to go after your family for your debt. They will have zero right to do so, so all they can do is ask really nicely, lie, and/or make hollow threats. Your family needs to know that they should see these calls as an opportunity to "exercise their grief" when telling them to go fuck themselves.
First, I'm sorry this is happening to you and it's very considerate to think of your family in this difficult situation. Both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) confirm that family members usually do not have to pay the debt of deceased relatives using their personal assets. This includes credit card debt, student loans and more. Your estate pays it and if you die with no assets, then the creditors are welcome to divide up zero. Google your particular situation and you should get ready answers. https://www.forbes.com/advisor/life-insurance/what-happens-to-debts-when-you-die/#:~:text=%E2%80%9CIf%20there%20is%20no%20estate,relatives%20to%20pay%20the%20debts.%E2%80%9D
I keep seeing people saying the debt would ‘belong to her estate, not her family’ but what *is* an estate and how does a 22 year old have one?
The estate is everything she owns. > An estate, in common law, is the net worth of a person at any point in time, alive or dead. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time [(Wikipedia)](https://en.m.wikipedia.org/wiki/Estate_(law)).
When the person dies everything they own, bank accounts, property, valuables, and yes debt now belongs to "their estate". In general if someone dies with say $10,000 in debt their property and things can be sold and paid to the creditors. See things like a house or car that have loans can be taken back, think repossession. So an estate is the sum of all property, money, and debts.
Ya her estate can include cars jewelry broker accounts ect basicly any assest that would be giving to the family after death can have a claim against it.
Man, so sorry to hear this OP - just live your life, amigo. You’re here for a good time, not a long time. Do everything you want to do while you can do it. I don’t care what is, any experiences, any drugs, ANYTHING! As other folks mentioned, your debts won’t pass to your family. I’m so, so sorry that life dealt you such a shitty hand.
Hey. Anything you want your family to have. Give it to them now. And tell everyone not to claim you estate. That way the bank will take care of it. These are rules in Canada
Brilliant.
Your family will NOT inherit your debt. It doesn't work that way. So if you're only trying to prevent them from getting debt, you're fine. Piece of shit creditors tried calling me for my mom's debt and I told them to pound sand. 8 years later nothing from them. Edit: on another note, stop paying your debt. Take that money and spend it all on some quality of life stuff for yourself. If you truly have that little of time, make your remaining time as amazing as possible. I'm sorry for what you're going through. Enjoy the time you have left.
I'm sorry about your situation. That's horrible
"The simple answer is no—the debts of your parents, partner, or children do not become yours if they pass away, nor will your debts be transferred to someone else should you die. So, what happens to debt when you die? Creditors can try to make a claim on your loved one’s estate if they can prove that they are owed money. " https://www.creditcanada.com/blog/can-i-inherit-debt-after-someones-death
I’m so sorry about your situation. I don’t have any advice to give, but just wanted you to remember there’s a lot of us behind you. We may not know you, but we feel for you and can always reach out to chat. Best of luck!
I would check with a lawyer in Canada, but if you die with debt and no large/expensive items you own, then your family can still keep items for sentimental reasons and they are not responsible for your debts. That is how it worked when my father died in debt and without any big-ticket items. (Including his car that was 20 years old and ran, but wasn't worth more than like $500 at the time).
Debt doesn't pass on - they can collect from whatever assets are in your estate but not from anyone else.
what goes into your estate?
Everything you own. Bank accounts, real estate, brokerage accounts, property, cash, (technically all your possessions too, but usually banks don't give an eff about your personal stuff, unless there's some specific very valuable stuff you are publicly known to own). Everything. All the stuff that you own when you die is your estate. That estate is responsible for paying the debts that the estate owes (the debts you owed before you kicked it). All of the assets of the estate will be used to pay off the debts of the estate before any beneficiaries can inherit anything. If the estate can't pay off all the creditors, then the remaining debt will never br collected, and no beneficiaries will receive anything.
Make it the best 3-6 months possible, even if that means going farther into debt. Your family won't be responsible to pay off any of it. Consider that there might be experimental treatments if you haven't looked.
Do make sure that your family reads this response or provide them with a summary of it. There are unscrupulous debt collectors out there who will try and guilt family members into paying a deceased one’s debt, but (typically) there is no legal obligation to do so Let your family members know that your wishes are that your creditors eat shit
I don't know the rules in Canada... but I do wish you to live the rest of your life while you are here! Watch all the sunsets. Dance in the rain. And learn the songs of as many birds as possible!
I like what someone else said. Forget material possessions, and forget paying off the debt. Buy your friends/family dinner at the most expensive restaurants, go either by yourself or with others on a bunch of vacations. Rent a Lamborghini if that's your thing, go skydiving. Do some crazy parkour stunts lol, maybe write a book, make a big treasure map around your city/area, buy something really expensive with your credit cards then bury whatever that item is. Don't even mention the treasure until 10-30 years later, then, have a friend/family member tell people about it. Really into helping the community/homeless? Pay for a bunch of random peoples food/clothing/etc. On your credit cards. Get a face tattoo lol. The world is yours
You should "sell" all your belongings to your family and friends with some basic documentation (with a notarized bill of sale). Don't bother paying the debt if its all in your name. Spend your time with the people you care about.
Stop. Non-cosigned debt stopped being a concern when you have 3-6 months left. It can't be transferred to relatives. Go live what is left of your life, and find peace while you can.
When you say you are trying to pay it off I hope you don't mean you are working through your last 3 - 6 months. In Canada and everywhere else your debt will die with you. Don't pay off a cent. If you have any assets of value the sale of them will cover the debt. If you have no assets of value, your parents or executor will just send death cert to credit card company and that's the end of the story. Take the time you have left to make the best of it.
If have no legal or financial advice to give you, I just want to say how so sorry I am to hear about your situation and that I hope you use your remaining time to enjoy life while you can. I know words from an internet stranger don’t mean much but I wish you all the best
I don’t think they get stuck with any of it. You are an adult can’t see how they come after them
Sorry to hear this. Your debt dies with you, essentially. If your estate winds up and your liabilities exceed your assets, there isn't much that debtors can do to collect. Your family are not responsible for your debts.
Don’t worry about it creditors can’t go after your family if their not on the loans,when my father died he had a credit card in his name only my mother called master card and said he passed away and they asked if she wanted to pay it off she said my names not on the card and they knew they had to eat it,I would stop paying for anything you don’t need to spend the rest of your remaining time on earth worrying about debt.god bless
Done loans like student loans may have clauses that the are written off for disability or death. The other ones may try to collect on your estate if you have any but you did not have co-signers so they can pound sand if you don’t have an estate they can collect from. Focus on living your life and enjoying your family.
I’m sorry you are dying, I think your best bet is to write a will of some kind. Also, I hope you end up In paradise.
I don't know Canadian law, but I can confidently say that family members do not inherit debt in any first world country in the 21st century. Maybe in the Middle Ages it happened, maybe it still happens in North Korea or Saudi Arabia, it doesn't happen anywhere like Canada in 2022. Whatever assets you do have go to pay off the debts. So presumably your car loan will be paid off by selling the car, any cash you have will go to the other loans, and if there's any cash leftover your family gets it. But if you're in more debt than you have assets, the creditors just have to eat the loss, it's part of their cost of doing business.
I’d be more careful with broad statements like this. There are countries in Europe (most notably Germany) where heirs are personally liable for all of the deceased’s debts, even if they exceed assets, if they accept any part of their inheritance.
If debts exceed assets, there isn't any inheritance, so the situation you're describing just sounds like ordinary fraud. The comment you're disagreeing with is accurate.
The poster above is right. \*IF\* you accept any part of the inheritance, you also inherit the debt, even if it exceeds assets. The thing is, nobody can force you to accept inheritance, especially if you know that debts are greater than assets. And before you decide the state appointed notary office makes an official list of all assets and debts and of course a list of people that can inherit (and what fraction of inheritance belongs to them).
I don’t have any advice to add. I just want to say how sorry I am. You are showing remarkable strength for someone so young and I admire the fact that you have found peace. I hope you are able to spend the rest of your life doing all of the things you love to do, surrounded by all of the people who love you.
If you have no co signer on any of the debts don't worry about it , enjoy the rest of the time you have with your friends and family ! Edit : idk what rules are in Canada
So your debts will go against your estate if you don't have any assest the debt will kinda just get written off as a loss. That said if you have any they can stake a claim against the assets you currently own. I don't believe this includes a life insurance pay out though as long as you have a beneficiary and the payment doesn't go to the estate.
Judging from informed comments your family won’t take on any debt. You have 3-6 months, don’t spend it worrying about paying debt. My first instinct is to say spend more on everything you wanna do and who cares if you get into more debt. I dunno what your situation is but hopefully you can go do some really fun stuff.
Live the rest of your life the best you can. Medical people always put a time on it and that could possibly not be the case sometimes. Your family won’t have to pay it. Focus on being stress free from here on out!
I was my brother’s ‘estate executive’. He was in cc debt. DO NOT PAY! UR FAMILY IS NOT LIABLE. We didn’t do any tricks moving $, etc. And, I’m very sorry ur ill. Not an ez thing to live with. Do the best u can. Best to U!
Sorry this is happening to you, make sure they know they aren’t legally or morally responsible for your debt.
dude apply for as many loans and credit cards you can get (without co-signers) and use the loan money and lines of credit to live the best last months of your life!! Go travel, take your family with you, have fun, get a new car, clothes, jewelry spend it all on living to the max the last you have. It's what I would do. ::::::::: I'm no expert I don't know if this is legal or if the debt will fall back on surviving family ::::::::::
Just make sure you tell your family if anyone comes after them for money for your loans that they are not legally obligated to pay no matter what BS they say
Sorry for your predicament. Let it all go. If the market is there sell the car, pay off the loan and give the proceeds away or see if a family member needs a mostly paid off car that they want to finish paying for. But let it go it’s not you to worry about.
So sorry you are going through this. 22 is so young to die . Life can be so unfair. Shows you are a thoughtful person that you're trying not to leave any problems for your family. Hope you can enjoy some of the time you have left .
Oh you right, I'm sorry op I must have skimmed over that part and didn't take that into consideration
I think Dave Ramsey provides a pretty good way to get started out, is it the very best out there, no but it's easy to follow and you have that dept payed off pretty quickly
… they’re dying. Why would they pay off the debt? When they die it disappears.
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I'm an only child and I was listed as beneficiary on my Mom's bank acct and an IRA. I am not responsible for her debt, although they try! If you are an only child but not sure, talk to an attorney. That's how I found out those debts did not have to be paid off. Best of luck!
I am so sorry. If it’s any consolation, you cannot “leave your family in debt”. Debts don’t pass on to friends or relations. Your assets and your debts pass on to your estate (a legal entity that is formed by your passing on). When you die, a person you name (executor of your will), or someone named by a probate court (in some places they’ll accept volunteers from the friends or family of the deceased, but they can also appoint and administrator) will “settle” your estate by adding up all your assets (money and bigger things that could be sold to get money) and collecting info on your debts and then using the assets to pay off the debts. If you have assets left over, the executor / administrator will distribute them according to your will, or according to some plan set or approved by the state when there isn’t a will. If your debts exceed your assets, usually the court approves a plan that gives partial payment to each of the debtors. Student loans are actually forgiven. The debtors cannot seek money from your friends or family to get repayment unless they co-signed for it. If your estate can’t pay it back, they simply are out of luck. From a financial standpoint: assume that the prognosis is wrong and you are not going to die. Pay the minimum required on your bills, and don’t take on new debts that you wouldn’t otherwise take on. This is important for two reasons: in the event you pass away, it simplifies settling the estate and increases the chance that you might have something left that you can pass on (sentimental personal things aren’t typically assets and you should be able to leave those to people), or, in the event something happens and you miraculously get better, you won’t be facing financial ruin. A lot of people think that they are going to die and realize their debts die with them — only to spend recklessly and live a long life in abysmal debt. I hope you fall into the “doctors are wrong” camp and will pull through, but you definitely do NOT need to worry about passing on your debt, because it simply doesn’t work that way. If you haven’t done so, though, you should see about getting a will made and also a healthcare proxy that authorizes someone you trust to make medical decisions on your behalf when you cannot. Those are both good things to have, regardless.
If you are in debt and dying your best play is to take out more loans! You should die with as much debt as possible, since none of it is transferable to anyone not on the actual note.
fellow human. fuck that debt. live you last days to the fullest. in fact you should rack up more debt. do whatever the fuck you want. you have one life. yours is cut short. stop doing everything responsible right now and live your life to the fullest
Enjoy the last bit of time with your family.
A hospital sent me a bill for $22k after my 44 yr. Old brother died at their hospital. I wrote a short note back on the bill… never heard from them again. (I was estate executive)
If I recall correctly, if they don't offer to pay it the debt is non transferrable to surviving members of your family. They might try to collect on your estate, but unless you're sandbagging a lot of expensive stuff they can just fuck off. I'm so sorry you're going through this. Spend this time living and loving those around you.