For Mexicans, death is not a complicated issue since it is part of our culture. However, we are not always prepared for your arrival and this can trigger many emotional and economic complications. Next, I will tell you about some important points to consider in a situation as unfortunate as the cancellation of a death credit, among others.
Have you ever wondered what happens if the holder of a loan dies?
It is necessary to inquire between your documents, such as account statements or credit cards. Once you are sure if you had a relationship with a bank or financial institution, it will be time to contact them.
It is better prevent:
Try to have a person (trusted) designated to have access to the necessary data and can review your credit bureau and allow you to confirm which debts are pending settlement, as they will have the status of “active”.
What to do if there are active debts?
In accordance with the provisions of the company, there are a total of 180 calendar days after the death of the holder of a debt, to notify financial institutions, although it is advisable to give notice as soon as possible, to avoid charging interest.
We must take into account that each institution is governed by different terms and processes in these cases. That is the importance of carefully reading the clauses of the contracts and notifying the person in time to avoid setbacks.
Life insurance, the best option …
Today, most financial institutions are implementing life insurance in their loans. Debts that are protected by insurance of this type will be canceled when the holder dies.
It must be taken into account that it is necessary to submit a COPY of the corresponding documents, which are mainly:
- Death certificate of the holder of the debt
- Official identification of the holder
- And the identification of the person in charge
Mortgage and auto loans are mandatory for the purchase of this type of insurance, but it is also being implemented in personal loans and credit cards. In this way, you can save your family many problems if they die.
Are there debts that can remain active after the death of the holder?
The company indicates that there are specific cases in which a debt remains active:
- He assumed responsibility and signed as co-holder of a loan.
- When the holder is married, the debt goes to the spouse.
- If assets such as houses or cars acquired through a credit are inherited.
- In case of having signed an endorsement, the responsibility of the payment is transferred to him.
- An executor is appointed in his will.
Concerns can be prevented thanks to credit protection through insurance, as we reviewed earlier.
In the case of credit cards, it is very important that the person who has been held responsible interrupt the cartoons domiciled to the account and avoid the use of plastic, since, otherwise, the credit cannot be canceled, since that the banking institution takes into account the date of death of the holder for the cancellation of the credit. If use is made after that date, the debt will remain active.
Another reason that causes a debt to remain active even after the death of the holder is that the credit is more than three months late, so it is important to keep our financial health healthy.
Are there debts that must be paid on a mandatory basis?
If any house or car acquired through a credit and not protected by any life insurance is left in inheritance, then the heir will not only receive the property, but also the debts. In this case, the person who inherits the assets has three possible scenarios in which he can decide which suits him best:
The heir assumes full responsibility for the property in question, so he becomes the owner of the debt and undertakes to make the payment, even committing the payment of this up to his own assets.
Inheritance can also be accepted as inventory
This means that the inheritance is accepted, but after payment of the outstanding amount. That is, the financial institution will be charged for the missing credit and the rest will be transferred to the heir. If the assets fail to cover the total debt, the creditors may not charge the heir, but he will not receive anything.
Reject the inheritance
In this case it is important that the rejection be formalized with the help of a trade and a notary. The heir is separated from the assets, as well as the debts.
As you see what happens when a loan holder is a very complex issue, but like many financial issues, prevention is the best weapon. It is important to leave all financial matters and testamentary procedures in order, to avoid wear and tear to our relatives after our death, so to finish do not forget:
- Designate a trusted family member or friend as responsible for your debts in case you die. You must have access to all of these information.
- The person in charge must immediately notify the financial institutions of your death, to initiate the corresponding cancellation procedures.
- Hire life insurance in your credits, usually the financial institution will offer it to you from the beginning
- If you are designated to take responsibility for the credits of a deceased person, make sure you have access to contracts, documents, electronic banking passwords, insurance policies, etc., that make any process that has to be done easier.