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Most America Citizen Shockingly Dies with Unpaid Debt:
Good living sometimes can only be achieved by investing some of the property through mortgage and credit loan. However, not everything will go as planned and the sudden death of a person can leave haunting thousands of dollar unpaid credit or mortgage to close relatives and heirs. The data was found when Credit.com use its accurate system to track about 220 million customers. 73% of the customers has died and left the average shocking amount of $61.554 mortgage and debt.
The data is based on Experian’s FileOne database, which includes 220 million consumers. (There are about 242 million adults in the U.S., according to 2015 estimates from the Census Bureau.) To determine the average debt people have when they die, Experian looked at consumers who, as of October 2016, were not deceased, but then showed as deceased as of December 2016. Among the 73 % of consumers who had debt when they died, about 68 % had credit card balances. The next most common kind of debt was mortgage debt (37 %), followed by auto loans (25 %), personal loans (12 percent) and student loans (6 %).
There are lots of ways things can get messy. Say your only asset is a home other people live in. That asset must be used to satisfy debts, whether it’s the mortgage on that home or a lot of credit card debt, meaning the people who live there may have to take over the mortgage, or your family may need to sell the home in order to pay creditors. Accounts with co-signers or co-applicants can also result in the debt falling on someone else’s shoulders. Community property states, where spouses share ownership of property, also handle debts acquired during a marriage a little differently.
The fact behind the numbers:
Most of the debt was accumulated from left credit cards bill and unpaid mortgage. The numbers are actually very logical considering the deceased is having a personal credit card that still active during the time of death. Buying properties also require long-term payment which is a very risky factor in terms being fully paid without any trouble. Below is the detailed information of the type of credit and the statistic
1. Credit cards:
The first common form of the debt is the personal credit cards. 68% of the deceased owed credit card debt on average $4,531. After someone has passed, their estate is responsible for paying off any debts owed, including those from credit cards. Relatives typically aren’t responsible for using their own money to pay off credit card debt after death.
2. Mortgages:
37% of the debt were in the form of a mortgage. Mostly they are in terms of family properties which lead incredible total amount of an average of $48,679 per person. debt is recouped from your estate when you die. This means that before any assets can be passed onto heirs, the executor of your estate will first use those assets to pay off your creditors. Or, the surviving family may make payments to keep the mortgage current while they make arrangements to sell the home.
3. Auto loans:
Followed by auto loans where most people depends on to buy personal or family rides. The 25% of the deceased leaving averages $17,111 for relatives to deal with. Car loans are not forgiven at death so, if your estate can’t cover the debt, the person that inherits the vehicle needs to decide whether they want to keep it. If they do want to keep the car, the inheritor can take over the auto loan payments and maintain possession of it.
3. Personal loans:
Since it is not very common and more difficult to obtain, personal loan held by 12% of people, with an average of $14,793.
4. Student loans:
The last portion of the result acquired by student loan for about 6% of the deceased with an average amount of $25,391.
How it would affect the close relatives:
Although the family members, heir, and the close relative were not necessarily responsible for the left out debt, there is some condition that can make the shoulder the burden as well. This condition will likely determine how severe is the trouble that might come
1. Personal belonging:
All the personal assets of the debtor will be taken by the creditor, even if it was bought or paid together with another person. If the deceased co-owned an account, it is also possible the partner will have to handle the rest of the amount.
2. Family properties:
The family properties sometimes can also be acquired if there is some discrepancy. Usually, the family member will have to move out if they cannot handle the rest of mortgage of the property where they lived.
