Posted on June 5, 2009 at 1:32 am I know that I can pass my wealth on to my loved ones according to the lawful order of-- my wife first and then my legal children, but how about if, by some unfortunate turn of events, I have gotten into so much debt, and heaven forbids--that I get into an accident too and dies--what happens to my debts?

Posted on June 5, 2009 at 1:42 am You are right that it is a common question and just like with your assets, your debts too would be passed on to your surviving family members. The process maybe indirect, for example, you left a will and it basically states their what happens to your finances in the event of your death. That will serves as a guide as to whom something is to be given, and how much(assets, not debts).This is now where your debts come in, before any assets can be distributed to your loved ones, all the debts must first be satisfied and only after all the debts are cleared will the remaining assets (if there are any) be enjoyed by your  loved ones (that are in your will).

Posted on June 5, 2009 at 1:56 am As far as I know when someone in debt dies,  those debts are going to be paid out of their estate  or whatever valuables: money, properties, stocks, etc. that they leave behind. I found it a little funny that you were concerned about your debts when you die and not about your loved ones well being Mister Henry! Here's what's going to happen if you die and your wife and you had a joint loan or co-signed an agreement or provided a loan guarantee - she is going to be liable for all of those debts when you are gone.

Posted on June 5, 2009 at 2:52 am You may also want to check with your state's law on inheritance. It is possible that in the state that you live in (community state) your assets as well as your debts are the responsibility of your legal family, whether or not they have co-signed a debt. One way to understand this possibility is that if they are willing to inherit your assets, it should follow that they also should stake a claim to your liabilities. The reason why I suggested you check your state law, is that some states have placed limitations on how much of the deceased estate a creditor can claim. That should be a relief to your family members. Of course most creditors would still attempt to collect on the full amount.

Posted on June 5, 2009 at 2:54 am If my parents die for example, and left no "estate" whatsoever, only debts...I'm an only child. Is it possible for the creditors to go after me?

Posted on June 5, 2009 at 3:00 am As far as I know, the only way that debts will be forgiven is if there is no "estate"  left behind, like in your case, I believe the term is "insolvent"--the logic behind it is if there is nothing to collect, especially if the surviving (next of kin) is still a minor, or disabled, or a senior citizen, then it is better to let go of it.Would anybody know if--- for example, the next of kin, is well off, like a son or a daughter, but his/her wealth has nothing to do with his/her parents---the creditors can go after him/her?

Posted on June 5, 2009 at 3:16 am If my husband dies, and left behind debts, and we have no other assets or estate aside from our home? Is it possible for it to be taken away from me?

Posted on June 5, 2009 at 3:38 am Like what the others have said, whatever the deceased has left, will be used to cover his debts. It is possible to lose your home to a sale (initiated by the probate court) but you may be able to avoid it depending on if you and your husband owned it as tenants in common or as joint tenants. If you are tenants in common - the debts get paid off from the house. In this case other people have a claim on the house too. If the amount of debt exceeds the house, then you lose your house to the debt--unless you are able to negotiate or come into an arrangement with the other tenants and creditors to let you keep the house .If you are joint tenants - it is just you and your husband. What the creditors can can bring against you is  what is called an Insolvency Administration Order anytime within 5 years after the death. What they might do is try to go after his part of the house, which would leave you with the half. What you can do is speak with them, if they succeed, and try to just pay off the other half.It is important for you to gather your papers especially the Transfer or Lease by when the property was acquired, also the Trust Deed or it could be in the Will. You may have to consult with a lawyer regarding this matter. If you can't find those paper try the Land Registry records.

Posted on June 5, 2009 at 3:50 am The consumer may also want to check for insurance that may cover those debts like number one: pension (death in service) especially if the deceased was not pension age. Check for payment protection cover too (for personal loans, credit cards) and death cover for a mortgage.

Posted on June 5, 2009 at 6:55 am As far as I know, family members are not entitled and aren't liable to inherit debts in the event that the cardholder dies. Debt collectors may pursue the deceased debtor's estate. If they aren't able to collect from there, the deceased person's heirs need to sell the inherited assets to pay for the debts owed.