There was a discussion at work about what happens to credit card debt when you've shined your last shoe. This all came about as someone said that they knew someone that racked up a big credit debt when the person was in their late years and the response was 'it doesn't matter, the credit card companies just write it off anyways'.
My initial thought was that the credit card company would go after your 'estate' so you would end up paying anyways.
After you die, the credit card company sneaks into the hospital and harvests your organs to pay back your debt.
Your normal organs go to rich members of the Bilderberg group, which keeps them alive and imortal. Your upper horn is ground into a powder and sold to the leader of Omicron Persia 6 as an aphrodisiac.
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There was a discussion at work about what happens to credit card debt when you've shined your last shoe. This all came about as someone said that they knew someone that racked up a big credit debt when the person was in their late years and the response was 'it doesn't matter, the credit card companies just write it off anyways'.
My initial thought was that the credit card company would go after your 'estate' so you would end up paying anyways.
Thoughts?
FlamingC
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What if you're a worthless student like myself with thousands of student loans and credit card bills? Now who pays? Are my parents and siblings legally liable? That seems hardly fair. And I have no big assets to pay for this all.
If the assets don't cover the bills? "If there isn't enough money, credit card companies would have to, as my students say, 'suck it up,' " says Doug Rendleman, law professor at Washington and Lee University.
Creditors are notified that the estate is insolvent. They write off the bills, and often that's the end of it. Children, friends, or relatives can't inherit debt. A card company can't legally force someone else to pay.
If the assets don't cover the bills? "If there isn't enough money, credit card companies would have to, as my students say, 'suck it up,' " says Doug Rendleman, law professor at Washington and Lee University.
Creditors are notified that the estate is insolvent. They write off the bills, and often that's the end of it. Children, friends, or relatives can't inherit debt. A card company can't legally force someone else to pay.
Not really all that useful information.
So much debt has been defaulted on in the USA that I think its actually become their Official National Sport.
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In my experience the Credit Card Companies contact the Estate and inform them of the outstanding balance. The personal representatives of the Estate have an obligation to deal with legitimate claims of the Estate and this would most definately be one.
One thing to watch though, is occasionally an Estate administration will linger on. Very fact specific situations, but the credit card co may have limitation issues. Talk to the Estate lawyer to get advice on point.
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If you're not religious and don't believe in karma, who the F cares? You're six feet under ground; nothing applies to you anymore physically or emotionally since your brain rotted away and your body was eaten by Father time and maggots.
What if you're a worthless student like myself with thousands of student loans and credit card bills? Now who pays? Are my parents and siblings legally liable? That seems hardly fair. And I have no big assets to pay for this all.
Unless your parents/family were guarantors on the debt, the bank or whoever owns your debt is SOL.
Here's a question, who gets first crack at collecting? Let's say your estate is worth $10K, but you owe $10K to the government, and 2 $5K loans to 2 different banks. Who gets to collect. Or is your estate divvied up between the creditors, like $5K would go to the government and $2.5K to each bank?
Last edited by yads; 07-29-2010 at 10:41 AM.
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Unless your parents/family were guarantors on the debt, the bank or whoever owns your debt is SOL.
Here's a question, who gets first crack at collecting? Let's say your estate is worth $10K, but you owe $10K to the government, and 2 $5K loans to 2 different banks. Who gets to collect. Or is your estate divvied up between the creditors, like $5K would go to the government and $2.5K to each bank?
Section.2 of the BIA defines a "creditor" as a person having a claim, unsecured, preferred by virtue of priority under s.136 of the BIA or secured, that can be proved as a claims under s.124 of the Act. The creditors may be divided into four categories:
Secured creditors are creditors, whose claims are guaranteed by some security in bankrupt’s property. The secured creditors are on the top of the bankruptcy priority of claims scheme. They still need to prove the claim to the trustee in bankruptcy or in the court, however they can always apply for an order to take possession of their security as soon as they give a reasonable notice of their intention to do so to the bankrupt or the trustee in bankruptcy.
Preferred creditors are creditors, whose claims come second under priority of distribution in the BIA by virtue of s.136(1) of the BIA. The priority of claims is justified by necessity to protect vulnerable individuals (employee’s wages, spousal payments, child support), administration of the bankruptcy process (trustee in bankruptcy’s fees, cost of administration of the estate), public purse (municipal taxes) or other public policy rationales (landlord’s rent claims). If property of the bankruptcy estate is insufficient to compensate all preferred creditors, the property is distributed proportionally to the amounts of preferred creditor’s claims (pari passu principle in s.141 of the BIA). The preferred creditors become unsecured creditors for the rest of the uncompensated claim. Secured and preferred creditors must be fully compensated, where a consumer proposal is made to the unsecured creditors.
Unsecured creditors are the creditors, whose claims are not guaranteed by some security in bankrupt’s property and do not have priority under s.136(1) of the BIA. If the property of the estate is insufficient to compensate all unsecured claims, the property is distributed proportionally to unsecured creditor’s claims (pari passu principle in s.141 of the BIA).
Deferred creditors the creditors whose wages are deferred for public policy reason, i.e. family bonds to the bankrupt. Their claims can be compensated only after unsecured creditor’s claims are fully repaid. The deferred claims include back wages to bankrupt’s spouses (s.137(2)) and back wages to other relatives (s.138).
If you're not religious and don't believe in karma, who the F cares? You're six feet under ground; nothing applies to you anymore physically or emotionally since your brain rotted away and your body was eaten by Father time and maggots.
Awesome! Thats hilarious because I basically give this same speech (not so graphically) to my young clients that have no dependants or co signer on their loan. For young people disability on their loan I think is very important due to more active lifestyle choices, but for some single guy, with a decent life insurance policy through his employer, life insurance is kinda stupid to take if you are under 35-40. The higest cause of death in young adults are traffic fatalities, which will be covered by the auto insurance policy anyway, and the rest of the causes break down to something like a 1/12000 chance if you are under 40. So in a lot of cases you are usually double, and sometimes triple dipping coverage.
Credit Card debt after you expire
