Will
What Happens To My Debts if I Die and I have a Will
As a general rule, all debts must be paid before money or assets are distributed in accordance with the Will. When a person dies, the person’s assets, money, and property are used to pay debts before anything is distributed from the Will. For example, credit card balances and student loans will be paid before any money or assets are given to the person’s heirs.
An exception to this general rule applies to “secured debts” (such as mortgage loans, home equity loans, car loans, etc.) where property can be distributed along with its debt. For example, if you have a car valued at $30,000 with a $20,000 loan on the car, you may give the car to a person, but that person will be obligated to pay the debt.
On the other hand, if there is not enough cash or value in your assets and property to fully pay your debts, then your assets and property will be sold to pay or satisfy your debts. In this situation, no one will inherit anything despite the provisions in the Will. For example, if you owe $20,000 in credit card debt, but only have cash and property worth $10,000, then your property will be order to be sold by the probate court and the $10,000 will be paid to the credit card company.
