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Does your family have to pay your student loans off if you die?

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Does your family have to pay your student loans off if you die?

Postby esmund » Wed Jul 31, 2013 3:45 pm

What about a car loan? Credit cards? Medical bills? Other bills?!
Is there a grace period???? Can some be forgiven?
I'm in a dark place in my life right now, I'd like to end it. I thought about it though... I love my family too much to leave them with that burden.
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Does your family have to pay your student loans off if you die?

Postby burgh77 » Wed Jul 31, 2013 3:49 pm

No one is obligated to pay bills for a deceased family member UNLESS they have co-signed or is a joint owner on the bills. Unless they have signed for the credit card, signed that they are responsible for medical bills, co-signed for a car loan - then they are not obligated in any way. Even if creditors call and ask - which many do - saying "Johnny would have wanted you to pay this".

Unless they have signed - they are not obligated.

If an estate is set up - assets can be sold and debts paid from that. What cannot be paid is written off by the creditor.

That being said - hope you come out of your dark place. There isn't much that can't be gotten through.

So I hope you don't take the extreme step of ending it.
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Does your family have to pay your student loans off if you die?

Postby dino64 » Wed Jul 31, 2013 3:52 pm

When you die you have an estate. That consists of all your assets minus your debts. Secured lenders have the right to get the item used to secure the loan,000. Lets say you have a car that is worth $50,000 and you only owe $10,000 on the loan. If nothing is done, the bank can seize the car, sell it, get their $10,000 plus costs for the seizure and sale, and return the remainder to the estate. Problem is, they could sell the car for $30,000 and after expenses, the estate gets $25,000 for a car that was actually worth $40,000 to the estate. It would have been far better if other assets of the estate had been used to pay off the car.

On the flip side, if the estate is worth less than the total debt, the lenders are going to go looking for someone to pay it off. In many cases a parent was a co-signatory on the student loan. In that case the parents get to pay the bill off as they signed it. They do not get forgiven as they are equally responsible for it.

If you love your family, ending it is not going to help them. Things may look bad now, they may even get worse but five years from now, things will be much better. You will be a graduate, you will have a job, you probably will have a steady relationship and you will be glad you got thru this.

Suicide is also totally stupid. I do not think your parents feel you are stupid.
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