What happens if I inherit a debt that I can’t pay?
Although institutions are obliged to provide life insurance when a loan is granted, it may be the case that the owner has not paid the insurance, so it will not be active and in the event of death the debt will not be covered immediately. .
One of the scenarios that can arise in this case is that the heir does not have the means to pay the debt even though he is interested in keeping the asset. Chávez gives as an example a mortgage loan, in this case the bank can auction the property and collect from there, if it is not enough, it is not the heir’s problem, since the specialist emphasizes that the debt is paid on the estate.
When an asset is auctioned, it may also happen that there is money left over from the transaction, in this case the organization that provided the credit takes the part that is owed and the rest is given to the heir.
Coperva points out that when it comes to departmental debts, these must not only be paid, but continue to generate interest even after the death of the person and, in 95% of these cases, it will again be the designated owner who is obliged to pay.
Is beneficiary the same as heir?
Chávez explains that when signing a credit contract, the owner designates beneficiaries who may not coincide with the heirs, in this case, the asset will remain in the hands of the heirs; The beneficiaries are there, for example, in case there is a surplus payment on the credit, in this case it is delivered to them.
“The first thing is that when you take out a loan, insurance is automatically taken out. The contract includes a series of beneficiaries, these are not necessarily going to be the heirs. If the will says that they are other people, they are the ones who inherit, “The beneficiaries are there in case, for example, there is a surplus, for example if 3 more monthly payments were paid, then that money is returned to them. They are not beneficiaries of the property but of the insurance,” he details.
The personal assets are managed by the executor and, if there is no will that designates him, an administrator will be appointed, who will have control over the assets but will also be in charge of resolving debts if the assets are not sufficient. This administration usually extends mainly to the person’s partner or children, who end up inheriting the debts.