what happens to the Personal Loan after the borrower died
7 months ago
My father was Sub inspector of Police in Tamilnadu, he has a salary account in SBI, he took a personal loan our family are not aware of this, and we haven't signed any documents related to the personal loan, now the SBI manager asking us to repay the amount because we are the legal heir of the deceased, does legal heir have to repay the remaining loan payment? he said they will submit a legal notice if we don't take liable for the loan
A.Dear Client,
When a person passes away, their outstanding debts, including personal loans, are typically settled from their estate. If your father had a personal loan from SBI, the bank would usually look to the deceased person's assets and estate to recover the outstanding loan amount. The legal heirs, such as the spouse, children, or other beneficiaries, are generally not personally liable for the deceased person's debts unless they have co-signed or guaranteed the loan.
Here are some key points to consider:
Estate Settlement: The process of settling your father's estate involves identifying his assets and liabilities, paying off debts, and distributing the remaining assets to the legal heirs as per the applicable inheritance laws.
Loan Repayment: If your father's estate has sufficient assets, the bank will typically recover the outstanding loan amount from the estate's assets. This may include savings accounts, fixed deposits, or other assets held in your father's name.
Legal Heir's Liability: As legal heirs, you are generally not personally liable for your father's debts unless you have provided personal guarantees for the loan or co-signed the loan agreement. If you have not done so, the bank cannot legally hold you personally responsible for the repayment.
Legal Notice: If the bank is threatening to send a legal notice, it is essential to consult with a lawyer who specializes in debt and inheritance laws. They can advise you on the best course of action and help protect your rights.
Probate: In some cases, the process of obtaining a probate certificate from the court may be required for settling the deceased person's estate, especially if there are disputes or complex assets involved. A lawyer can guide you through this process if necessary.
Thank you.
When a person passes away, their outstanding debts, including personal loans, are typically settled from their estate. If your father had a personal loan from SBI, the bank would usually look to the deceased person's assets and estate to recover the outstanding loan amount. The legal heirs, such as the spouse, children, or other beneficiaries, are generally not personally liable for the deceased person's debts unless they have co-signed or guaranteed the loan.
Here are some key points to consider:
Estate Settlement: The process of settling your father's estate involves identifying his assets and liabilities, paying off debts, and distributing the remaining assets to the legal heirs as per the applicable inheritance laws.
Loan Repayment: If your father's estate has sufficient assets, the bank will typically recover the outstanding loan amount from the estate's assets. This may include savings accounts, fixed deposits, or other assets held in your father's name.
Legal Heir's Liability: As legal heirs, you are generally not personally liable for your father's debts unless you have provided personal guarantees for the loan or co-signed the loan agreement. If you have not done so, the bank cannot legally hold you personally responsible for the repayment.
Legal Notice: If the bank is threatening to send a legal notice, it is essential to consult with a lawyer who specializes in debt and inheritance laws. They can advise you on the best course of action and help protect your rights.
Probate: In some cases, the process of obtaining a probate certificate from the court may be required for settling the deceased person's estate, especially if there are disputes or complex assets involved. A lawyer can guide you through this process if necessary.
Thank you.
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