Settling Inherited DebtsWhat happens when a family member passes away

and leaves you with unsettled scores.

Common Types of Inherited Debt• Credit card debt

• Mortgage or home loan

• Car loan

• Student loan

• Personal loan

What happens if the debt is unsettled?• Cash from the deceased’s real estate will

be used to settle all loans.

• If cash is unsufficient, the loans will not be legally transferrable to the deceased’s heirs.

• Heir can still take ownership of the loans to inherit the deceased’s estate.

Common Types of Inherited Debts

Mortgage• A secured loan which uses the first

property to purchase a second property and the next.

• The lender will seize ownership of the first property and sell it off to cover for the remaining debt.

• When debt is settled, inheritors will get the ownership of the second property.

• Inheritors can continue paying for the mortgage if desired.

Car Loan• Inheritors can take over car loan in behalf

of the deceased.

• With approval from lender, inheritors can refinance the car loan.

• Can also use cash from the deceased’s assets to pay off the remaining loan.

Credit Card Debt• The remaining debt will be covered from

the cash of the deceased’s estate or assets.

• If the fund is not enough to cover for the overall amount of debt, banks will usually write them off.

• Inheritors can also choose to take financial aids such as CIMB personal loansto settle the debt.

Student Loan• If the student loan is obtained from the

government or federal, the remaining debt will be written off.

• Remaining amount from private student loans will be settled by using cash from deceased’s assets.

Can the debt fall on someone else?

• Yes. If the loan is made with a second-party on hand, then the debt will fall onto the person who signed the agreement of the loan.

How do I avoid this?

• If a family member or a close acquaintance is having trouble with finance, then it is best to discuss and devise a plan to settle the debts.

• Always be wary and alerted with loans you sign as the second-party so you know what your financial status is.

• If you’re an elderly, think twice about taking a new debt as you do not want the burden to fall on your inheritors.

• Settle unfinished debts with personal loan: http://www.imoney.my/personal-loan/cimb/