What happens if someone dies overdrawn?

[wilteddandelion]

Purely hypothetically speaking, if someone dies with an overdraft, what happens to it, especially if they have no material assets (e.g. house, car). Do their next of kin have to pay it off, is it written off, or does it depend on the bank/building society it's with? Assuming an interest free one.

If there are no assets, it’s written off. Next of Kin do not have to pay.

does that apply to student debt too?

If the net value of their estate is nil, all debt will be written off including any student loan.

If they own assets, e.g property, car etc or have money, tax rebates, life assurance etc the value from those will be used to clear any balances.

This. All sound advice. Itll be written off if no assets

Hey - this sounds serious, e.g. someone with student debt dying would be young. I am very out of my depth with this kind of advice but the Samaritans are meant to be really helpful if you or someone you know if feeling lost or hopeless.

@wilteddandelion student debt even more so - definitely written off, but student loan company would have zero claim on any assets of the deceased whereas other creditors would - student loan repayments only come out of salary via a fixed formula so once the final pay packet from the deceased's employer has been paid (with final student loan repayment deducted) nothing further is due to them

For almost all other creditors, the debts of the deceased would be added up and compared to the magnitude of the assets. If the value of the deceased's assets is 33% of the total debt then each creditor gets 33% of what they are owed, the rest is written off. Family have no obligations.

Exeption is mortgage debt - the mortgage lender has first call on the property asset. So if the deceased has a mortgage of £500,000 and other debts of £250,000 and the only asset is a house worth £400,000 (assuming house prices dropped) the mortgage lender gets all that money and the other creditors don't get anything.

What doesn't and cannot happen is family inheriting assets when debts went unpaid but there's never obligation to take on debt incurred by someone else once all assets have been distributed to creditors.

Are you ok OP? This is a very concerning post. Please speak on here and to someone close and GP if my concerns are founded.

Agreed. Reach out OP. I used to work at Citizens Advice and if you are personally in any debt there is support. Debtline, step change, citizens advice....me 😁. Also student loans are only paid back if you earn over a certain amount... overdraft repayments can be negotiated between debtor and bank, if no joy you can get someone from debt charity to negotiate for you.
I hope its just a general enquiry post but if not, reach out

I was in debt, overdrafts, very bad credit. I couldn't pay my mobile bills, couldn't buy much food. It was awful.
But I managed to worked my way out of it. It took some years but you can do it!
Nothing is worth losing life over. Seriously

Please let us know how you are, OP.

I'm ok folks.......really.
but thank you for caring.

is my mental health good, no (lol). But I am going to do something irreversible, also no. I'm not in massive debt, and I'm not suicidal over money.
But again - thank you for caring.

If you need debt advice please dm me OP XXX

Unless you live in Greece…where apparently debt passes on to family members. I stand to be corrected though.

Thats true. I think? OP in uk xx

Debt doesn't pass on in the UK. If you have no assets it is simply written off. If you are having money worries, please contact stepchange, it's not worth harming yourself over.

Absolutely it doesn’t pass on to family. Didn’t stop NatWest telling me I was liable for BIL’s overdraft when he died. I told them to fuck off.