There has always been a debate among many about what exactly banks do when someone who borrowed money from their firm passes away without paying it before their demise.
It is important to note in the first place that there are different kinds of loans and each type of loan has its own way of recovering the debt by the bank.
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Generally, if you happen to have some unpaid debts before your demise, the responsibility for repaying them is passed to your estate. The bank will in most instances go after your assets before contacting your beneficiaries.
Another aspect is that when you die, just as your properties are being inherited by some people, certain individuals are also likely to inherit your debt depending on the relationship between you, the debt and the individual.
Let us look into the circumstances where some individuals will have to bear the responsibility of repaying your loan to the bank.
Joint Account: If your account happens to be a joint account that any other person is a signatory to, the person will be held responsible for payment of the loan when you die.
Spouse: Depending on the legal document signed between yourself and your spouse during your days on Earth, your spouse could be in position to settle your debt.
Co-signers: In a case where you take out a loan from a bank to set up a business or any other thing with another person, they would immediately inherit your debt and will entirely be responsible for payments of your loan after you pass away.
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