If I Die, How Will The 3 Year Installment Loan Be Repaid?
Have you ever wondered that what will happen to your loan deal if you die? Recently, there is a number of people who have asked this question. They always wonder if their spouse or their family members are liable to pay back the loan amount or time. The answer to their question is placed on the type of loan deal they have taken. There are specific laws and legal procedures for different loan types that help lenders to get back their money in case of borrower death.
Loan Never Dies With The Borrower
- Co-Signers And Joint Debtors
In case, the loan is allotted to the joint debtor’s then one becomes liable to pay full balanced loan amount. The co-signer can be the spouse, friend or relative of the deceased who became responsible for balanced payment. If the cosigner can able to meet the loan obligation then lender got full right to file the lawsuit against the existing debtor to recover their payment.
- Recovery Of Secured Loan
If one owes secured loan and dies before making the full payment then executor of deceased’s will or their next kin becomes responsible to pay off the pending loan once he/she allocate the assets of the deceased. It is important to note that lender cannot force the deceased’s kin to pay off the debt if they are not willing to take possession of asset put as security against the loan. In that case, lender got the right to seize the collateral under non-payment of the secured loan.
- Recovery Under Unsecured Loan
Unsecured financial services have no connection with the property of the borrower. It means lender have no right on the assets of the borrower in case he/she cant able to make repayment. However, when a debtor dies to leave an unpaid unsecured loan then the lender can file a legal claim against the estate of deceased for repayment. If debtor leaves assets then executor of his/her will should use the property to pay off the deceased’s debt before allotting the items to the heirs as per directions of deceased’s wish list.
In some cases, debtors do not possess any property and die to leave behind an unpaid unsecured debt. In that situation, the lender can’t hope to get the money back as there is no one legally bound to repay the debt. But some unethical lenders try to collect the debt from the family of the debtors by harassing them to make payment. Ethical or genuine lenders simply write off the debt as a tax loss.
3 year loans are consequences of the due debts in case of death of the debtor. Lenders always have the right to file a lawsuit to claim their money from the assets of the deceased