What banks do when borrowers die with unpaid loans

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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.

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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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OSIX AFRICA
Osix Africa is a talented Ghanaian blogger who is making several Impacts among the new crop of bloggers emerging from West Africa. His influence in the blogging scene saw him emerge as Student Blogger of the Year at the 2021 edition of the Ghana Colleges Entertainment Awards and was also adjudged Youth Blogger of the Year at the 2023 edition of the Volta Youths Awards among other nominations from several high-profile awards schemes. Born as Godsway Charles Tudi, the young blogger boasts of a rich background of education, having completed his first degree at the Emirates University of Aviation in Dubai (UAE). He also studied at the northern-based University for Development Studies (UDS) and currently having a top-up study with the University of Cape Coast in Ghana. He is the CEO of Osix Travel Hub, a travel agency based in Ghana and UAE.