Debts after death. Do heirs have to pay for the negative balance on a deceased relative's card

In 2017, Tetiana, a designer from Dnipro, lost her mother. A few weeks later, she started receiving calls and threats from debt collectors demanding that she repay her mother's loan debts. The amount of the debt continued to grow, even though the borrower had already passed away. As it turned out later, the bank had no information about the client's death. Only after a statement was filed and a death certificate was provided was the debt recalculated to reflect the date of death, after which Tetiana paid about UAH 10,000 and fully settled it.How to deal with such a situation and in which cases credit card debt passes to relatives after the death of the account holder, and when the bank has no right to demand any payments – investigated LIGA.netIn which cases does debt not pass to relativesAfter the client's death, credit card or overdraft debts do not automatically disappear, but they also do not automatically pass to relatives.Such obligations are part of the inheritance and are regulated by the Civil Code. Only those heirs who have officially accepted the inheritance can be held responsible for the debt – and only within the value of the inherited property. "If an heir renounces the inheritance, they incur no obligations to the bank," the press service notes PUMB.A similar approach is also used in Oschadbank. They state that after documentary confirmation of death, the bank verifies the existence of credit obligations, cancels the unused portion of the credit limit, and stops accruing interest. "Further debt settlement is carried out when heirs contact the bank," the press service of Oschadbank explains.Read alsoNot by "5-7-9" alone. What's happening in the affordable lending market for businesses?When relatives have to pay off loansUpon a person's death, the inheritance includes not only property and funds, but also all existing debt obligations.This refers, in particular, to overdrafts on payment cards, installment plans, and "pay-in-parts" programs, which banks legally consider to be loans. "This is not a 'conditional' product, but a full-fledged consumer loan within the meaning of the Civil Code," notes Yakiv Voronin, head of the committee of the National Bar Association of Ukraine.Clicking a button in a banking app is legally equivalent to signing a contract, so such obligations are inherited on general grounds – just like traditional loans.An important nuance is that an inheritance cannot be accepted partially. If a person agrees to receive even one asset, they automatically accept all the deceased's obligations. "You cannot take an apartment or a deposit and at the same time refuse the loans," emphasizes Maksym Cherednichenko, a lawyer at the law firm "Maksym Boyarchukov and Partners."However, debts are transferred to heirs only after the official acceptance of the inheritance. If a person renounces the inheritance, no debts will be transferred to them, and the creditor has no right to make claims.At the same time, the most common misconception in understanding such disputes is the identification of an heir with a "next of kin." A bank cannot collect a debt simply because a person is the spouse, child, or parent of the deceased. This is according to Tetiana Nevmerzhytska, a civil and criminal law attorney at Proctor Law Firm.Read alsoThe energy market's debt trap: why delaying a solution is more expensiveWho has to pay and how muchIf the heirs have officially accepted the inheritance, they may be obliged to repay the deceased's debts – but only within the value of the property they received. "If the debt is UAH 50,000 and the inheritance is valued at UAH 30,000, the liability is limited to this amount, and the rest of the debt is written off," explains Ilya Kolesnyk, a lawyer in the bankruptcy and restructuring practice at Prykhodko &amp; Partners Law Firm.If the heirs have renounced the inheritance or no one has accepted it, the bank has no right to demand repayment of debts from relatives. In this case, the debt is recognized as hopeless and is not collected.A separate issue is how the debt is divided among several heirs. Banks often try to impose joint and several liability, demanding the entire amount from any of the relatives. "The Supreme Court consistently states: the liability of heirs is partial – each pays proportionally to their share in the inheritance," emphasizes Yakiv Voronin.Another crucial point is the fixation of the debt on the date of the borrower's death. All interest, fines, penalties, and commissions accrued after this date cannot be collected from the heirs. "Default due to death does not involve the debtor's fault and therefore cannot be a basis for penalties," Voronin explains.In practice, this means that heirs have the right to demand a recalculation if the bank includes penalties in the claim that were accrued after the person's death – and the courts support such claims.Read alsoHow banks will operate during a blackout. Scenarios from Sense Bank, Oschadbank, and OTPCan this be appealedA bank's claims for debt after the cardholder's death are not a death sentence. In some cases, heirs can challenge them if the bank violated the procedure or overcharged.The most common ground for objections is that the inheritance was not actually accepted. If the relative did not submit an application to the notary and did not use the deceased's property, the bank's claims may be deemed unfounded.The second typical situation is when the bank has missed the deadlines. The creditor has a limited time to assert their claims against the heirs, and violating this deadline often becomes an argument in favor of the family. The bank must assert its claims against the heirs within six months from the moment it became aware of the opening of the inheritance. This is according to Tetiana Nevmerzhytska, a civil and criminal law attorney at Proctor Law Firm.The bank must also prove what property the heir received and how much it is worth. If this is not done, the court will either reduce the amount of the claim or refuse to collect it altogether.At the same time, the absence of a certificate of inheritance does not always mean the absence of liability. The acceptance of an inheritance can also be confirmed by actual actions – for example, if you started using the property (apartment, car, etc.).

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