Currently, there is an atmosphere of tremendous instability. Many wonders if the loss of a loved one in death is a financial burden on the family.
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Currently the Corona Crisis is killing a large number of people. About a thousand people are being killed every day. Even the strongest and youngest have died of corona.
So right now there is an atmosphere of tremendous instability. Many wonder if the loss of a loved one in death is a financial burden on the family.
Many families who lost breadwinners are unsure what happens to the deceased’s loans or credit card outstanding.
Engaging with collection agents would be the last thing on their minds. Steps that financial institutions will take for the recovery of dues vary based on the category of the loan.
In some cases, like a home loan, lenders have regulations to help them in recovery. In others, like a personal loan, there is no legal recourse for a lender.
If a person has taken any kind of loan, the question is whether the family has to pay the money after his death. If a person has taken a loan for an auto loan, the loan amount can be recovered by confiscating the vehicle.
However, after the death of a person, there are many difficulties in recovering personal loan, home loan and credit card debt.
In the case of home loans, banks plan the loan based on the possibility of the person’s death. Therefore, if a person dies, it does not affect the repayment of the loan.
In such cases, the bank co-applies to the spouse of the deceased, otherwise to a relative. Money can also be recovered from the borrower’s insurance policy.
Personal loans or credit card loans fall into the unsecured category. Therefore, in case of death of a person, the banks write off the loan and record it in the sunken account.
The family of the deceased is not obliged to repay the loan.
In case of death of the person taking the vehicle loan, the family is asked to repay the loan. If they are unable to do so, the vehicle is confiscated and the debt is recovered.
Educational loans are also not given without any guarantee. If the borrower dies, the loan is recovered from his parents.
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