Who has to pay back the loan if the borrower dies?

The popularity of online payday loans is so great that it reaches even those social groups that had little to do with the Internet and new technologies before – just like the elderly. At present, such people are increasingly turning to non-bank loans and even use profiled loans for retirees, while a steady income in the form of a pension guarantees them an easy grant of payday loans. It is sad, but in the case of older people one should take into account that the older person may simply not be able to pay back the loan. In this case, does the family have to repay the loan?

Who inherits debts?

The general principles of inheritance are set out in the Civil Code, and more specifically in its Fourth Book. Despite the fact that the entries that can be found there do not specifically regulate the issue of repayment of loans after the borrower’s death, it is assumed that all obligations and debts of the deceased are included in the estate, which will be inherited. The deceased’s property can be inherited by statute (spouse and children, or in the absence of a further family) or on the basis of a will.

If the borrower dies before paying off the loan, the law says that the content of the civil law agreement, which is the loan agreement, is not modified. Therefore, exactly the same conditions and fees are left as it was when the testator was still alive. However, this may be problematic in the case of payday payments, whose repayment deadline expires after 61 days (this is the longest repayment period currently available), and the inheritance proceedings will last much longer – the heir has at least 6 months to accept or reject the inheritance. The law has found a solution to this situation and until the inheritance is divided in court proceedings, all heirs are jointly and severally liable for the debt. Jointly and severally – that is, each individual is responsible for the entire inheritance, not just for the part due to it.

We inherit the benefit of inventory

Liability for debts that are inherited is not unlimited. Therefore, it is not always necessary to pay back all debts that we have inherited – the law indicates that the obligation to repay obligations extends only to the amount that the accumulated assets of the testator had to pay. However, it should be remembered that the estate will also include real estate and valuable movable property, not only cash, so if we inherited, for example, an apartment, the sale of which can be time-consuming, we will have to pay debts from our own pocket first. If the debt begins to be enforced by the bailiff, he does not have to take the estate, but it can be, for example, the heir’s private bank account or his car.

By law, we are responsible for inherited debts with our property, but – attention! – we inherit debts in proportion to what proportion of the inheritance we have received. In this case, if there were four heirs and all inherited equally, each heir is responsible for a 25% inheritance.

We reject the inheritance – how do you do it?

Nobody boasts about debts, especially older people who are either ashamed of their financial situation or do not want to worry their loved ones. It happens, therefore, that even the immediate family does not realize that the deceased person had debts. So it is good to look through all the documents of the deceased person and check whether he did not take a payday loan, installment loan, bank loan or if he did not buy anything in installments. There may, however, be a problem with finding out at source because the loan company cannot provide such information to third parties (they are subject to banking secrecy). Probably, they will not provide relevant information on the basis of the death certificate itself, but will also require a document confirming the legal title. They will not do it before the legal acquisition or rejection of the inheritance.