The inheritance includes not only the property, but also the debts of the deceased. That is, creditors have the right to demand their repayment from the heirs. We are figuring out which debts will have to be repaid, and which ones can be waived.
By law, heirs are obliged to repay debts only within the value of the property that they inherited. Simply put, if you received an inheritance for a certain amount, this is the maximum amount of debt that you are obliged to pay for the deceased.
What debts are inherited?
Not all debts are inherited. For example, alimony or fines for the deceased do not need to be paid.
But the rest of the debts will have to be settled if you accept the inheritance. In particular, you will need to pay:
How to find out to whom and how much a person owes?
To find out if a person had debts and to what extent, a notary who conducts an inheritance case will help you.
At your request, he can request this information from the Credit History Bureau and the Federal Bailiff Service. In the Federal Tax Service, he can clarify whether the testator has fiscal debts.
If you know which banks, MFOs or PDAs the testator borrowed money from, inform the notary about it. He will be able to immediately request data from these organizations, and this will speed up the process of assessing the amount of debts.
Creditors can show up themselves. If the borrower suddenly stops paying and the financial institution cannot find him, then it checks the information about whether the debtor is alive and whether someone has opened his inheritance business.
So creditors can present their claims in time, and heirs can find out about the debts of the deceased before entering into the inheritance.
What should I do if the debts are discovered after entering into the inheritance?
Lawyers of the Federal Notary Chamber explain that in this case the creditor has the right to present his claims to the heirs — all at once or any of them. He can also divide the debt between the heirs and demand from each his share of payments. And if he does not receive money from someone, he has the right to forward the debt to another.
At the same time, it is worth remembering that each of the heirs is responsible for the debts of the deceased only within the value of the property received by him. For example, the bank requires you to repay the balance of your loved one's loan debt, which amounts to a certain amount. And your share of the inheritance is much smaller. It is better to immediately inform the bank about this — and it will forward its demands to return the remainder of the debt to other heirs (if any).
If the debt is more than the total value of the inheritance, the lender simply writes off the remainder of the debt.
In cases where the creditor fails to reach an agreement with the heirs peacefully, he usually goes to court. Moreover, he files a lawsuit immediately against all the recipients of the inheritance who refused to pay the debt.It may happen that you have received an inheritance in equal shares with other heirs, and the creditor has made his claims only to you. At the same time, your share of the inheritance exceeds the total amount of the debt, but you consider it unfair to pay alone.
If you do not want to sue a bank, MFI or other organization, you can pay off the debt for other heirs, and then demand that they reimburse you for their share. This can also be done through the court.
How to assess whether debts do not overlap the value of the inheritance?
To do this, you will need an assessment of the market value of the testator's property. It can be made by specialized appraising companies. You can entrust the choice of an appraiser and communication with him to a notary.
Also, you have the right to use the cadastral value of real estate for calculation — it can be requested in the registry. But it does not take into account many factors: for example, the condition of the apartment, the quality of repairs, the availability of built—in furniture and appliances - and can be both lower and higher than the market.
It is important to know that the valuation of the property is made before entering into inheritance and then cannot be revised. For example, you got an apartment that was valued at a certain amount at the time of inheritance. Even if then its market price increases by 1.5 times, you will be responsible for debts only within the cost of the apartment.
The data obtained will allow not only to correlate the value of the inheritance with the amount of debts, but will also be useful for calculating the state duty that the heirs must pay.
The document with the result of the property assessment must be handed over to a notary.
Is it possible to refuse to take on other people's debts?
Yes. To do this, you need to refuse to accept the inheritance.
If you did not open the inheritance case, you can simply not go to the notary and do not submit any applications. But in this case, you also should not use the inherited property. Moreover, it is impossible to perform any actions with him. For example, to pay debts on housing and communal services for the apartment of a deceased relative, to give it for repair or to insure his car. Otherwise, it will be considered that you have agreed to inherit the property, and with it the debts, representatives of the Federal Notary Chamber emphasize.
If you have already applied for inheritance, you can change your mind until you have received a certificate of your rights to the deceased's property. You need to contact the notary who conducts the case and write a statement of refusal of inheritance. This decision can no longer be reconsidered.
It will be possible to give up the property after you enter into inheritance rights only through the court.
For minor heirs, their guardians can refuse the inheritance — but only with the consent of the guardianship authorities.
How to repay debts inherited?
Creditors have the right to demand anything from heirs only when they receive a certificate of inheritance.
It will be necessary to pay the debt according to the payment schedule that was originally specified in the contract with the lender. If you managed to agree on a temporary "freeze" of the debt for the period until you entered into the inheritance, the schedule will simply shift for this period.
It may turn out that the payment amounts are too large for you or, conversely, you would like to repay the loan faster. In this case, you can discuss with the lender an alternative schedule or refinance the loan.
It is important to discuss all the difficulties that arise when paying off the debt immediately with the lender. This will help to resolve problems in a timely manner and not get bogged down in debt.
Can debts grow after the debtor's death?
Financial organizations have the right to charge interest on loans and borrowings even after the death of the borrower.
At the same time, fines and penalties for late payments cannot grow. The creditor is obliged to fix the amount of fines on the day of the person's death. And it cannot charge new penalties until someone accepts the borrower's inheritance along with his debts.
It is better to immediately contact the bank, MFO or CPC, as soon as you find out that your loved one remains their debtor. There you will have to present a death certificate and demand not to charge fines until the inheritance and financial obligations officially pass to you.
If the creditor found out about the death of the debtor late and managed to calculate additional penalty interest, you have the right to demand to recalculate them after you enter into the inheritance.
If the amount of debt is large, by the time you enter the inheritance, large interest rates on the loan or loan may run up. Discuss with the lender whether it is possible to "freeze" the debt until you accept the inheritance.
It is especially important to negotiate if the amount of debt is large or the creditor has the property that you should inherit as collateral. In addition, there are cases when there are several heirs and you do not yet know how the property will be distributed among you, and therefore, which part of the debt you will have to pay, and which — to other legal successors.
If you are the sole heir and you know that you will have to pay the debts, find out from the creditor if you can immediately start making payments for the deceased. Ask them to give you a payment schedule. If the amount is small, it may be more convenient for you to repay the loan or loan ahead of time in order to save on interest payments.
Financial organizations most often meet heirs halfway. Restructure the debt — shift payments to a later date. Or they agree to accept money from a person who was not specified in the contract as a co-borrower or guarantor.
Usually, it is easier for banks, MFOs and CPC to peacefully negotiate with debtors and receive all payments under the contract than to seek repayment of the debt through the court or to reissue and sell the collateral.
You can ask creditors to recalculate the amount of debt after you enter into the inheritance. But this threatens to turn into unnecessary trouble. It is possible that by this time the lender will have time to transfer the overdue debt to collectors — and it is not always possible to agree with them on the restructuring of the loan or loan.
How to act if the loan was taken on collateral or surety?
It may turn out that the apartment or car that you inherit is pledged to the bank. When you come into the inheritance, you will get ownership of it and will be able to use it. But you will not have the right to sell or donate it until you repay the loan. And if you do not pay your mortgage or car loan on time, the bank will be able to take this apartment or car through the court to repay the debt.
If you realize that you cannot afford to pay the loan, you can voluntarily transfer the collateral to the lender and thus repay the debt.
You may have inherited a loan that has a guarantor. But under the terms of the loan agreement, his liability may end in the event of the borrower's death. Then creditors will demand repayment of the debt only from you.
By law, heirs are obliged to repay debts only within the value of the property that they inherited. Simply put, if you received an inheritance for a certain amount, this is the maximum amount of debt that you are obliged to pay for the deceased.
Not all debts are inherited. For example, alimony or fines for the deceased do not need to be paid.
But the rest of the debts will have to be settled if you accept the inheritance. In particular, you will need to pay:
- Bank loan
- A loan from a microfinance organization (MFO) or a consumer credit cooperative (CPC)
- Debts on utility bills
- Tax debts
How to find out to whom and how much a person owes?
To find out if a person had debts and to what extent, a notary who conducts an inheritance case will help you.
At your request, he can request this information from the Credit History Bureau and the Federal Bailiff Service. In the Federal Tax Service, he can clarify whether the testator has fiscal debts.
If you know which banks, MFOs or PDAs the testator borrowed money from, inform the notary about it. He will be able to immediately request data from these organizations, and this will speed up the process of assessing the amount of debts.
Creditors can show up themselves. If the borrower suddenly stops paying and the financial institution cannot find him, then it checks the information about whether the debtor is alive and whether someone has opened his inheritance business.
So creditors can present their claims in time, and heirs can find out about the debts of the deceased before entering into the inheritance.
What should I do if the debts are discovered after entering into the inheritance?
Lawyers of the Federal Notary Chamber explain that in this case the creditor has the right to present his claims to the heirs — all at once or any of them. He can also divide the debt between the heirs and demand from each his share of payments. And if he does not receive money from someone, he has the right to forward the debt to another.
At the same time, it is worth remembering that each of the heirs is responsible for the debts of the deceased only within the value of the property received by him. For example, the bank requires you to repay the balance of your loved one's loan debt, which amounts to a certain amount. And your share of the inheritance is much smaller. It is better to immediately inform the bank about this — and it will forward its demands to return the remainder of the debt to other heirs (if any).
If the debt is more than the total value of the inheritance, the lender simply writes off the remainder of the debt.
In cases where the creditor fails to reach an agreement with the heirs peacefully, he usually goes to court. Moreover, he files a lawsuit immediately against all the recipients of the inheritance who refused to pay the debt.It may happen that you have received an inheritance in equal shares with other heirs, and the creditor has made his claims only to you. At the same time, your share of the inheritance exceeds the total amount of the debt, but you consider it unfair to pay alone.
If you do not want to sue a bank, MFI or other organization, you can pay off the debt for other heirs, and then demand that they reimburse you for their share. This can also be done through the court.
How to assess whether debts do not overlap the value of the inheritance?
To do this, you will need an assessment of the market value of the testator's property. It can be made by specialized appraising companies. You can entrust the choice of an appraiser and communication with him to a notary.
Also, you have the right to use the cadastral value of real estate for calculation — it can be requested in the registry. But it does not take into account many factors: for example, the condition of the apartment, the quality of repairs, the availability of built—in furniture and appliances - and can be both lower and higher than the market.
It is important to know that the valuation of the property is made before entering into inheritance and then cannot be revised. For example, you got an apartment that was valued at a certain amount at the time of inheritance. Even if then its market price increases by 1.5 times, you will be responsible for debts only within the cost of the apartment.
The data obtained will allow not only to correlate the value of the inheritance with the amount of debts, but will also be useful for calculating the state duty that the heirs must pay.
The document with the result of the property assessment must be handed over to a notary.
Is it possible to refuse to take on other people's debts?
Yes. To do this, you need to refuse to accept the inheritance.
If you did not open the inheritance case, you can simply not go to the notary and do not submit any applications. But in this case, you also should not use the inherited property. Moreover, it is impossible to perform any actions with him. For example, to pay debts on housing and communal services for the apartment of a deceased relative, to give it for repair or to insure his car. Otherwise, it will be considered that you have agreed to inherit the property, and with it the debts, representatives of the Federal Notary Chamber emphasize.
If you have already applied for inheritance, you can change your mind until you have received a certificate of your rights to the deceased's property. You need to contact the notary who conducts the case and write a statement of refusal of inheritance. This decision can no longer be reconsidered.
It will be possible to give up the property after you enter into inheritance rights only through the court.
For minor heirs, their guardians can refuse the inheritance — but only with the consent of the guardianship authorities.
How to repay debts inherited?
Creditors have the right to demand anything from heirs only when they receive a certificate of inheritance.
It will be necessary to pay the debt according to the payment schedule that was originally specified in the contract with the lender. If you managed to agree on a temporary "freeze" of the debt for the period until you entered into the inheritance, the schedule will simply shift for this period.
It may turn out that the payment amounts are too large for you or, conversely, you would like to repay the loan faster. In this case, you can discuss with the lender an alternative schedule or refinance the loan.
It is important to discuss all the difficulties that arise when paying off the debt immediately with the lender. This will help to resolve problems in a timely manner and not get bogged down in debt.
Can debts grow after the debtor's death?
Financial organizations have the right to charge interest on loans and borrowings even after the death of the borrower.
At the same time, fines and penalties for late payments cannot grow. The creditor is obliged to fix the amount of fines on the day of the person's death. And it cannot charge new penalties until someone accepts the borrower's inheritance along with his debts.
It is better to immediately contact the bank, MFO or CPC, as soon as you find out that your loved one remains their debtor. There you will have to present a death certificate and demand not to charge fines until the inheritance and financial obligations officially pass to you.
If the creditor found out about the death of the debtor late and managed to calculate additional penalty interest, you have the right to demand to recalculate them after you enter into the inheritance.
If the amount of debt is large, by the time you enter the inheritance, large interest rates on the loan or loan may run up. Discuss with the lender whether it is possible to "freeze" the debt until you accept the inheritance.
It is especially important to negotiate if the amount of debt is large or the creditor has the property that you should inherit as collateral. In addition, there are cases when there are several heirs and you do not yet know how the property will be distributed among you, and therefore, which part of the debt you will have to pay, and which — to other legal successors.
If you are the sole heir and you know that you will have to pay the debts, find out from the creditor if you can immediately start making payments for the deceased. Ask them to give you a payment schedule. If the amount is small, it may be more convenient for you to repay the loan or loan ahead of time in order to save on interest payments.
Financial organizations most often meet heirs halfway. Restructure the debt — shift payments to a later date. Or they agree to accept money from a person who was not specified in the contract as a co-borrower or guarantor.
Usually, it is easier for banks, MFOs and CPC to peacefully negotiate with debtors and receive all payments under the contract than to seek repayment of the debt through the court or to reissue and sell the collateral.
You can ask creditors to recalculate the amount of debt after you enter into the inheritance. But this threatens to turn into unnecessary trouble. It is possible that by this time the lender will have time to transfer the overdue debt to collectors — and it is not always possible to agree with them on the restructuring of the loan or loan.
How to act if the loan was taken on collateral or surety?
It may turn out that the apartment or car that you inherit is pledged to the bank. When you come into the inheritance, you will get ownership of it and will be able to use it. But you will not have the right to sell or donate it until you repay the loan. And if you do not pay your mortgage or car loan on time, the bank will be able to take this apartment or car through the court to repay the debt.
If you realize that you cannot afford to pay the loan, you can voluntarily transfer the collateral to the lender and thus repay the debt.
You may have inherited a loan that has a guarantor. But under the terms of the loan agreement, his liability may end in the event of the borrower's death. Then creditors will demand repayment of the debt only from you.
Another option is also possible. According to the contract, the guarantor can be responsible for the loan, even if the debt passes to a new borrower (for example, in the event of the death of the former). As a result, the guarantor will be obliged to pay the loan before you inherit, and then will be responsible for the debt together with you.
But it is worth considering that the guarantor has the right to demand that you reimburse him for the costs of paying off the loan. However, only within the value of the property that you inherited.
The borrower was insured. Do I need to pay on his loan?
Banks often recommend borrowers to insure their life and health in favor of the bank, especially if they issue a large loan for a long time. If the testator has issued such a policy, the insurer is obliged to repay the entire debt to the bank. But the insurance contract may contain restrictions and it is important to study them carefully.
Not all types of death can be considered an insured event. For example, if the borrower committed suicide or suffered from a terminal illness, which he hid from the insurance company, the insurer will not repay the debts — they will pass to the heirs. These nuances need to be checked in the terms of the contract.
Does a minor heir have to pay off debts?
For a minor, his legal representatives — parents, guardians, trustees - enter into the inheritance. That is, in fact, the debts for a minor are paid by people who have accepted the inheritance on his behalf.
Can the heir declare himself bankrupt if he is unable to pay the debts of the deceased?
Maybe, but it's more reasonable to declare the deceased bankrupt. In this case, in order to pay off creditors, only his property will be taken away and sold, and the heirs' belongings will not be touched.
The Bankruptcy Law describes in detail the conditions and procedure for action in the event of the debtor's death.
If an apartment or a house was inherited and this housing became the only one for the heir, it will be left. It is only important that this property is not secured by a mortgage loan. Otherwise, it will be sold to pay off the debt to the bank.
But it is worth considering that the guarantor has the right to demand that you reimburse him for the costs of paying off the loan. However, only within the value of the property that you inherited.
The borrower was insured. Do I need to pay on his loan?
Banks often recommend borrowers to insure their life and health in favor of the bank, especially if they issue a large loan for a long time. If the testator has issued such a policy, the insurer is obliged to repay the entire debt to the bank. But the insurance contract may contain restrictions and it is important to study them carefully.
Not all types of death can be considered an insured event. For example, if the borrower committed suicide or suffered from a terminal illness, which he hid from the insurance company, the insurer will not repay the debts — they will pass to the heirs. These nuances need to be checked in the terms of the contract.
Does a minor heir have to pay off debts?
For a minor, his legal representatives — parents, guardians, trustees - enter into the inheritance. That is, in fact, the debts for a minor are paid by people who have accepted the inheritance on his behalf.
Can the heir declare himself bankrupt if he is unable to pay the debts of the deceased?
Maybe, but it's more reasonable to declare the deceased bankrupt. In this case, in order to pay off creditors, only his property will be taken away and sold, and the heirs' belongings will not be touched.
The Bankruptcy Law describes in detail the conditions and procedure for action in the event of the debtor's death.
If an apartment or a house was inherited and this housing became the only one for the heir, it will be left. It is only important that this property is not secured by a mortgage loan. Otherwise, it will be sold to pay off the debt to the bank.