April 10, 2017

There is a good chance that you may pass away with some debts in your name. In fact, a recent study conducted by credit.com, identified that 73% of consumers have outstanding debt that was reported after they passed away. Those consumers carried an average balance of $12,875 in debt not associated with a mortgage. For an individual who had a mortgage, the debt was $61,554. 

More than 220 million consumers had their data crunched for this particular study. Among the 73% of consumers who passed away with debt, approximately 70% of them had credit card balances. The next most frequent kind of debt was a mortgage debt at 37% followed by auto loans, personal loans, and student loans. When you pass away, your debt may still affect the people that you leave behind. Debt belongs to a deceased individual or the deceased person’s estate.

In the event that there are enough assets to cover these debts, creditors are paid and then beneficiaries receive whatever is left afterwards. If there are not enough assets to satisfy debts, then creditors will lose out. There are many different ways that things can get messy in this process. It’s important to consult with an experienced estate planning attorney to understand how debt may influence your estate.