When a person dies, their closest relatives, if they have not left a will, inherit the assets they left. However, just as assets are inherited from a deceased, liabilities are also inherited, as is the case with bank debts. This; however, it only happens if the person who died did not purchase credit life insurance when applying for the loan or credit.
Everything you need to know about whether or not bank debts are inherited
In this post we want to talk a little more about what happens with bank debts of the deceased and how they affect their families.
Are bank debts inherited?
According to the Peruvian civil code, bank debts are inherited, so the relatives of the deceased must assume the payment of these. However, this does not imply that the assets of the debtors are affected, but rather that the same assets of the deceased person are used to pay off the outstanding debt.
Despite the above, if a family member has been the guarantor of the debt, it will be this person who assumes the responsibility of paying it off.
How to avoid that the debt is inherited?
The only way to prevent a debt from being inherited is by purchasing credit life insurance. This type of insurance is activated when the debtor dies to free them from paying the debt or loan acquired. This, as long as the death of the person was not due to suicide, participation in criminal acts, among other circumstances established in the contract.
Does credit life insurance activate itself?
No, when a person dies, their family members must activate the credit life insurance. To do this, they must approach the bank with the necessary documents to notify the death and activate the insurance. Likewise, it is important to remember that, for the insurance to be activated, the debtor must have been up to date in the payment of said insurance.
What type of credit life insurance can I purchase?
There are two types of credit life insurance that you can purchase to protect your family from your debts. One is debt relief insurance, through which the insurance company pays your debt in full at the time of your death. The second is the initial amount, through which the insurance company, in addition to paying the remaining debt, provides your beneficiaries with the amount of the credit that you canceled until the moment of death.