More Americans Are Passing Away with Debt Than Ever

A recent study of 220 million consumers in Experian’s File One database, indicated that up to 73% of consumers are passing away with debt in high numbers. For those individuals who do not have a home loan, the average debt was $12,875. However, consumers with a mortgage carried approximately $61,554 in debt.
You may assume that debts are no longer your issue if you pass away, but that’s not true if there are assets inside your estate that may cover a portion or all of these debts. If you have communicated to your loved ones that you intend to give them particular assets, but those are seized and sold as part of your estate plan, you may wish to discuss your options for changing your estate plan with an experienced lawyer.
thumb_alternateThe types of debts most common included credit card balances, mortgage debt, auto loans, personal loans and student loans. Debt belongs to the deceased individual when he or she passes away. That means that creditors can pursue asset sold in the estate as part of their payment.
If there aren’t enough assets to satisfy debts, then creditors may lose out on all or some of their payments. But in the event that there are assets in the estate to pay out creditors, then your beneficiaries may actually receive nothing. This is why it may be important to discuss other opportunities such as a life insurance policy or advanced planning strategies with your knowledgeable estate planning attorney.

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