QUESTION
If a spouse dies and leaves an unpaid property loan, is the living spouse responsible for paying for that loan?
Asked on Mar 05th, 2014 on Estate Planning - Michigan
15 ANSWERS
If the debt was incurred during the marriage in all likelihood it would be considered a community debt and the remaining spouse would be responsible.
Answered on Mar 07th, 2014 at 6:32 AM
The answer to this question has a lot of what ifs. If the spouse is co-signer or guaranteed the loan then yes, check with an attorney. If the loan is on property the spouse expects to retain, then probably yes.
Answered on Mar 06th, 2014 at 4:41 PM
Not sure what you mean by "property loan." If you mean a loan secured by a mortgage on the property, then the surviving spouse is not obligated to pay the loan or fulfill the mortgage obligations unless the spouse signed the promissory note, mortgage, or a guaranty. However, the lender will foreclose the mortgage and take the property if the loan is not paid.
Answered on Mar 06th, 2014 at 4:41 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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You didn't specify what type of loan the husband left unpaid. If it is the mortgage on the home, if the surviving spouse doesn't pay this the mortgage company or bank could foreclose on the home; if this is medical debt the surviving spouse may well be obligated to pay that. On credit card debt it may depend on how the account was set up and whether the surviving spouse used the card or not; was this business debt? There are many unanswered questions and I suggest you retain counsel.
Answered on Mar 06th, 2014 at 4:40 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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When you say "property loan," do you mean a mortgage? If so, yes; whoever inherits the property inherits subject to the mortgage.
Answered on Mar 06th, 2014 at 4:40 PM
2 Awards
If the loan is secured by the property, then the beneficiary can either continue to pay the loan or give up the property in most cases.
Answered on Mar 06th, 2014 at 4:39 PM
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Is the loan secured to the property? Is the property going back to the lender or to the spouse. These questions should be addressed with an attorney. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
Answered on Mar 06th, 2014 at 2:24 PM
2 Awards
Yes. The loan is secured by the property. If the spouse wants to keep the property, they must pay the loan. At James Law Group we make every effort to respond to you quickly and efficiently. This means we may be responding to you from a mobile device. As you know, responding on these devices can result in typographical errors that my otherwise not occur. In order to provide this extra service, please be aware of this and excuse any errors that may be caused by responding in this forum.
Answered on Mar 06th, 2014 at 2:19 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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If it is community property and you want to keep the property, yes. If you don't want the property and the estate does not have the funds to pay the debt, then give the property back to the lender.
Answered on Mar 06th, 2014 at 2:18 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Yes, if you want to keep the property. Otherwise the bank will foreclose and sell the property to satisfy the loan.
Answered on Mar 06th, 2014 at 2:17 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I would have to know more about the circumstances, but loan and/or a security interest in the deceased spouse's property would survive and be an obligation of the estate. I would strongly suggest that you take the documentation and explain the entire situation to the attorney of your choice. If you are in Michigan you are welcome to call Musilli Brennan Associates at 586-778-0900 to engage my firm, and with additional information.
Answered on Mar 06th, 2014 at 2:15 PM
If you do not pay it they will foreclose on the home.
Answered on Mar 06th, 2014 at 2:08 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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If the loan is secured by real estate then the security interest remains in place and follows the real estate to the new owner. If the spouse succeeds to the ownership of the property then the spouse would have to pay the loan to assure enjoyment of the property. If the spouse the sold the property the debt would have to be paid out of the sale proceeds. The debt is not a personal obligation of the spouse (provided it is not a family debt or the spouse did not join in the obligation as a co-borrower). The spouse could abandon the property or surrender it to the lender. If the loan is a typical mortgage then it is likely that it contains a due on sale clause that gives the lender the right to call the loan when ownership is transferred to a non-borrower. If the loan is a personal obligation of the decedent then it must be paid out of the assets of the decedent's estate, just like any other creditor claim, before the estate assets can be distributed to the heirs and legatees of the decedent. This could result in the forced sale of the property if no other assets are available to pay the claim.
Answered on Mar 06th, 2014 at 2:07 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Not directly. If the loan is a lien on the property, however, and the spouse fails to pay, then the property can be lost to foreclosure. Without more facts from you, it is hard to provide any more detailed information.
Answered on Mar 06th, 2014 at 2:06 PM
Edwin K. Niles
If by ?property? you mean real estate, yes. Unless of course you don?t want to keep the property. The lender will foreclose on the property if the loan payments are not made.
Answered on Mar 06th, 2014 at 2:06 PM