What about a loan after death?

Written By : on August 31, 2019

A decline is usually associated with an unexpected increase in wealth: an increase in savings, a car or a house. Unfortunately, the inheritance of the deceased person’s debts , not only regarding liabilities incurred to banks, but also to non-bank entities and other creditors, is inherited.

Types of inheritance – why is this important?


Before discussing the issue of inheritance of debts , it is worth distinguishing between types of inheritance. Pursuant to Article 992 § 1 of the Civil Code, property rights and property obligations of the deceased at the time of his death pass to one or several persons. If we are heirs, it is worth finding out as soon as possible whether we inherit any payment obligations from the deceased person. As soon as possible, because time is of the essence here. Inheritance provisions can be found regarding specific deadlines that must be adhered to when deciding on specific actions to protect us from inherited debts.

You can say, among others on statutory inheritance. Pursuant to the Act, the children of the heir and his spouse are appointed to the estate first. In the absence of children, he inherits the spouse and parents of the deceased. The Act includes specific provisions specifying who inherits in the event of the death of a parent (inherits then the siblings of the deceased) or stinks of siblings (then inherit the children of the siblings). You can also speak of willful inheritance, in which property (and debts) are transferred to a person included in the will. This distinction is important because we have various dates according to which we must comply if we do not want to inherit debts.

When do we inherit debts?

When do we inherit debts?

If we are heirs inheriting from the Act in the first place, we inherit the inheritance at the time when we learn the death of the testator. If we are a further legal heir , we inherit the estate when we learn that the closer heir has rejected the estate. As you can guess, the will will inherit when he learns to call him in the will.

The above deadlines are important because the heir has six months from the day he learns about the inheritance to make a statement (before a court or notary public) in which he will accept or reject the inheritance. Inheritance includes both assets and debts, so if we decide to accept it, we inherit everything, including liabilities to pay. Similarly, with the rejection of an inheritance: by giving up debts, we also give up the estate of the deceased. If after six months we do not make any statement, the inheritance is granted to us with the benefit of inventory. This means that the heir, although inherits the debts of the deceased person, inherits them to the value of the goods he received in the inheritance. This can be illustrated with a simple example. Inheriting a motorbike worth PLN 10,000 and a debt of PLN 15,000, we are responsible for debt only up to PLN 10,000.

Before and after the amendment of the act

If the legal status prior to the amendment to the Act of 18 October 2015 continued, we would not deal with inheritance with the benefit of inventory, but with inheritance. Before the amendment, failure to submit a declaration of acceptance or rejection of an inheritance within six months of becoming aware of the inheritance automatically assumed the full responsibility for the debts of the deceased. This rule is called a simple takeover. The amendment was introduced to protect the interests of people who inherited debts not through their fault, but only because they were burdened with the obligations of their relatives. At present, it can be concluded that the heir is responsible for the inherited debt in a limited way

The amendment of 18 October 2015 also applies to the conditions under which the inventory is created. Before the amendment, it could only be prepared by a court bailiff. After the amendment, it is possible to prepare such a list by an heir who accepts the estate with the benefit of inventory.

Who inherits the co-borrower’s debts?

Who inherits the co-borrower

It is worth outline one more possible scenario, i.e. taking a loan with a person who later died. Much depends here on the type of loan taken. In mortgage loans (and in other loans amounting to higher amounts), life insurance is necessary. In the event of the co-borrower’s death, the insurer is responsible for paying back part of the deceased person (exception is suicide or death as a result of alcohol or drug consumption).

As you can see, the decline is not only about financial benefits. Legal changes that took place in 2015 protect the heirs’ interests to a greater extent. Despite this, it is worth having knowledge of the dates on which we can renounce the inheritance. The simplest solution that will protect our loved ones from credit inheritance remains a life insurance policy. It will ensure the repayment of the remaining part of the deceased person’s loan by the insurer.

Michael O'hare

Author: Michael O'hare

Michael is a Experience Auto Financing Specialist that Prides himself on Providing a Full Scope of Options for all His Clients and Customers. Not only does he provide guidance and assistance for those looking into getting a Car Loan, but helps those who have challenging credit scores to get approved for the lowest rates possible!