What happens to cc debt when someone dies?

amother

↑ Lemonlime

Thu, Dec 28 2023, 6:51 pm

amother OP wrote:

I think it is safe to assume that most Middle class people, especially religious Jews, these days have significant amounts of cc debt. Those of you who don't, kol hakavod. Please teach me your ways. And unless we catch a big windfall and/or win the lottery in the next 40 years or so, I'd hate to have our kids inherit our debts.

They won’t, they just might not inherit anything else either

amother

DarkRed

Thu, Dec 28 2023, 9:10 pm

My father lived in brooklyn, and without going into too many deets, his death wasn't natural and he left behind almost 15k in cc debt. We didn't have to pay a penny of it. He also had no estate set up cuz he rented and never owned and I never set one up cuz it was very complex (even though I regret not doing so)

amother

↑ Electricblue

Thu, Dec 28 2023, 11:21 pm

I think while many frum middle class families struggle when they have kids at home, once the all the kids grow up and are out of the house, the financial situation improves.

The mortgage gets payed off and you don't have tuition or health insurance for your kids anymore. Even if you host them a lot, and help them financially here and there, once they move past the stage of support - you will be spending a lot less money a month.

At that time usually is when your parents reach 120 and there often is some kind of yerusha. Even if it is only a home, it is often enough to pay off things like credit card debt ( I mean - how much cc debt do you have can't be more then a 100-200k, they don't let you borrow THAT much).

Other people who's parents didn't have a home or any assets, or have so many siblings that by the time its split up its very little money, often choose to downsize to a smaller home/apartment in a retirement community or close to the kids, and pay off the outstanding debt and mortgage.
They don't let you mortgage your home for more then the value of the property - so usually it can be payed off and then you can purchase something small and retirement friendly.

At that point your kids are older with big kids and they don't come often - its at the stage where you start going to them.

Basically, chances are that you will pretty much debt free by the time you pass, and even may possible have a little bit to pass on.

amother

Blueberry

Fri, Dec 29 2023, 2:39 am

amother DarkRed wrote:

What’s the benefit of setting up an estate?

Sorry about your father.