Are family members liable to settle loans of deceased?
The situation may become challenging for surviving family members if the deceased has left an outstanding loan
The untimely death of someone not only leads to emotional trauma but financial distress as well. The second wave of Covid-19 has caused immense hardships to the family members of those deceased due to Covid-19. Things become more challenging for the surviving family members if the deceased has left an outstanding loan.
In such a case who is supposed to pay those dues?
Expert view
Renu Maheshwari, founder, Finscholarz, said if one gets the assets he/she also receives the liabilities of the deceased. The family member should first analyse all the assets and liabilities left, see if there is any property or money that can be used to pay off the loan. This is also applicable to credit card dues.
Maheshwari suggests that if a person has any money, he/she should first and foremost pay off the credit card dues. The credit card dues are high and can be very difficult to handle.
“If a person has left EMIs on the house loan, and the surviving family member can afford to pay EMI, then he/she should continue paying it because it will give tax benefits. In case the family member is not working but has some money, and then pay off the loan. If the person is not living in that house and cannot afford to pay EMIs it is better to sell it off and pay off the loan from that money,” Maheswari said.
Query
In a Money9 Helpline episode, a caller from Ahmedabad has asked that he had some pending loans from his deceased father.
“My father had two pending dues- a home loan and a personal loan. The money due on a personal loan is less and manageable for me but the home loan amount is big. If I am unable to pay off the home loan, will my property be seized?” asked Rakesh Vyas.
Responding to this Maheshwari said that, legally it can be seized. But considering the tough times due to Covid-19, most of the financial institutions, NBFCs, etc. will consider such a situation and offer some kind of support.
She advises that an individual should discuss with their bank or institution, as they might provide some moratorium on humanitarian grounds.
Watch the full episode here:
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