A mortgage loan is an agreement concluded between the bank and the borrower. The bank decides to make a specific amount available for a specific purpose, and the borrower undertakes to repay the loan (together with commission and interest) within a specified period. Such a loan is granted for the purchase or construction of real estate. It is usually a very high sum and the repayment period is several dozen years.
What happens to the loan after death? The bank will not cancel such a transaction
A mortgage loan is secured by a mortgage. If the borrower is in default, he or she can sell the mortgaged property to get money. What does it look like when the borrower dies and the loan has not been repaid? First of all, it doesn’t disappear and you still have to pay it back.
The contract may include a provision regarding the maturity of the claim, i.e. the case that the creditor will demand immediate repayment. Such information may appear in the contract, but it does not have to. It all depends on the bank. If the contract does not mention the maturity of the claim, then the Civil Code regarding inheritance applies.
Loan Photo Andrea Piacquadio / Pexels
Loan forgiveness after the borrower’s death. When can you ask for it?
Pursuant to Art. 922 of the Civil Code “The property rights and obligations of the deceased are transferred at the moment of his death to one or more persons in accordance with the provisions of this book.” This means that the loan must still be repaid by the heir or heirs of the deceased. An inheritance can be inherited on the basis of a will or statutory inheritance. Then you have to repay the installment every month, just like the deceased borrower did. However, there is an exception to this rule. When a loan was taken out jointly with another living person (e.g. ), that person is responsible for the repayment. If you don’t want to pay, you have two options: you can reject the inheritance or apply for loan forgiveness. The bank may write off the loan if only the deceased was responsible for maintaining the family and the spouse is unable to work. However, there is no guarantee that this will be successful, because such cases are considered individually. If you feel like it, vote in our poll below.
Source: Gazeta
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