There is no inheritance, but there is debt. One girl in Utah got into such an absurd situation. She learned of her uncle’s death. There were no other heirs. She wrote an application for acceptance of the inheritance from a notary. Only later it turned out that the testator did not have property, but his uncle had debts. It would seem, what is terrible here. After all, the heir is responsible for the debts of the testator within the value of the inherited property In other words, no inheritance – no debt. In practice, everything turned out to be much more complicated. The bailiff and the creditor began to collect the debt from the girl’s salary. The case went to court.
Before accepting an inheritance, learn about debts. Indeed, it is quite possible that the debts cover the value of the testator’s property. Then there is no point in accepting the inheritance. Besides, you can get into an unpleasant situation, like that girl. The dream of inheriting and becoming a wealthy person may have the other side of the coin.
The presence of debts will be checked by a notary. Modern technology provides a tremendous opportunity. Today, a notary can make inquiries with credit organizations to find out whether they have bank accounts, safe deposit boxes, metal accounts, and so on. At the same time, the notary has the possibility of the testator’s debt obligations. Moreover, it is possible to find out the size of the debt burden. Based on this information, the heir can already decide on the inheritance.
How Else Can You Find Out About The Debts Of The Testator
In fact, today the primary information about debt obligations is kept in the public domain. Card file of cases in the Arbitration Court on the bankruptcy of an individual. You can go to the website of the Regional Arbitration Court and type the name of the deceased. If there is a bankruptcy case, it will be in the case file. It is noteworthy that even if a person started the bankruptcy procedure, in the event of his death, the case does not stop, because there are his heirs. Card file of cases in a court of general jurisdiction. It’s a little more complicated here. You can find out the magistrate’s court and the district court of the testator at his address. Then, in the section on court proceedings, you can find out about the presence / absence of court cases with the testator.
Site of bailiffs-executors. If enforcement proceedings were initiated against the testator, then on the website of bailiffs in the search for debtors section, you can get this information. Pledged car or real estate. On the website of the Federal Notary Chamber in the section of the register of pledges on movable property. As for real estate, you can make online inquiries for a statement for a specific property.
Below is a simple explanation of good and bad debt:
Good debt: If your debt helps you generate money and build net worth, it can be considered as good debt. It is money owed for things that help you increase your income over time and build wealth. Debt such as student loans, home loans, business loans, etc. can be considered good debt.
Bad debt: If your loan is used to purchase a depreciating asset, it is a bad debt for you. If a debt won’t generate income or go up in value, then you ideally should not take it. For example, a loan used to buy a car, clothes, make investments, or do debt consolidation is considered as a bad debt. Also, things like credit cards and other consumer debt do little to improve your financial outcome. If you are a salaried individual or a self-employed professional with abrupt personal needs, you might have a cash crunch towards the end of the month. Often, it gets difficult for many individuals to meet their obligations. And thus, debt may end up becoming a part of your life.
Below Is How You May End Up Falling Into Debt:
Disregarded credit usage: You may resort to a personal loan or a credit card to meet your personal needs. However, this easy credit can spiral you in a downward direction. People find using credit cards easy, but they usually lose track of their spending in doing so. As you do not have to shell out cash in the transactions you make using a card, it can considerably increase your spendings.
Lack of contingency funds for emergencies: Unplanned events like a medical emergency, job loss, etc., can force you to borrow beyond your repayment capacity. Such situations are more often than not the starting point of falling into a debt trap. You can avoid such sudden financial shocks by maintaining an adequate contingency fund.
If you understand debt and know that you are getting into debt, you will manage and get out of it. But a debt trap is often a result of a gradual slide into debt. It is dangerous as it stays unnoticed until you are deep in debt. Many telltale indications show that you are falling into a debt trap.
Signs Showing That You Are Falling Into A Debt Trap
The most common sign is when it gets problematic for you to meet monthly expenses without taking on extra debt. However, some other indications that are typical of unhealthy personal finance and show the possibility of your falling into a debt trap are:
Debts Owed By The Executor
Typically the person who a testator names as executor is a relative or a close family friend. Thus, it follows that it is not unusual for an executor to owe a testator money, as loans between family and friends is quite common. Just because a person accepts the position of executor does not mean that his or her debt is automatically forgiven.
The executor of an estate has a fiduciary relationship with the estate. In doing his job, the administrator is required to do what is in the best interests of the estate and the beneficiaries. Thus, if the executor owes a debt to the estate, he must pay it when it is due, just like any other person or entity that owes a debt to the estate.
Debts Owed A Deceased Person
The obligation to pay a debt does not go away when the person to whom the debt is owed passes away. The debt is still owed to the estate. In fact, debts owed to the estate are considered assets of the estate. It is the job of the executor or in the absence of the will, the estate administrator to collect debt owed to the estate. Such debt could be personal loans, rent, refunds, or other types of debt. If the debt is a business debt, there may be an added layer of complication that should be sorted out with the help of a probate administration lawyer serving Utah. If the testator does not forgive the debt owed and the debtor is also a beneficiary, the disposition to that beneficiary may be offset by the amount of the debt.
Debts owed to the estate by the executor, or by a non-executor family member or friend must be handled with care. Oftentimes there is no written record of the transaction. If payment was made on the loan, there may not be records. Thus, it may be difficult for the executor to prove the amount of the original debt, how much has been paid, if any money is still owed, or if the debt was forgiven. It is not surprising that such debts are common causes of disputes during probate.
However, the law allows a testator to forgive a debt owed by the executor or by anyone else. A testator can discharge a debt by including language in his will that states that if the debt has not been paid at the time the testator passes away, the debt is discharged. In order to ensure that the language in the will is clear, consult Ascent Law Firm Attorney. However, if the estate has significant debt, the clause forgiving the debt may not be honored.