Who has to repay student loans if the student is deceased?
Thursday, August 26th, 2010 at
5:21 pm
Stephanie asked:
I am making out my last will and testament and was curious about who becomes responsible for my student loans? Or my auto loan for that matter? Anyone know?
I am making out my last will and testament and was curious about who becomes responsible for my student loans? Or my auto loan for that matter? Anyone know?
Tagged with: Loans Student • Student Loans • Will And Testament
Filed under: Student Loans
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the answer is no one unless ther are co signers that could be liable due to contract signed.
No one is responsible for your loans after you die. What will happen though is that your estate would pay off any outstanding loans then what ever is left over can be given to survivors.
When a person passes, the assets of the decedent are encumbered.
If there are no remaining assets, there is no money to be paid. The lender suffers.
If you are young and in no excessive fear of death, you are able to provide for your debts in your will or in your living trust.
Suggestion: If you are youthful, contemplate a living trust to help maintain the privacy of your assets and your desired distribution of those assets. Your will could then be a ‘pour over will’.
In short, if you have no plan to protect those who trusted you (i.e., loaned you money), there is no other person who will have to cover your debts. The manifest exception is contractual obligations signed by one or more other parties.
Keep asking easy questions and you can have most of your answers handled at no cost.
Incidentally, if you desire, you can ask some of your questions in the Yahoo section on LAW so that attorneys can answer. I am a Chartered Financial Consultant, so I cannot answer with the same level of authority as a practicing lawyer.