When our spouse leaves us, many questions arise to us without our having anticipated them. How then manage consumer loans and mortgages?
What happens if my companion dies? Do I have to repay the credits? Are there different situations? What is death insurance for? When our spouse leaves us, many questions arise without us having anticipated them.
In this case, mortgages differ from consumption credits. Indeed, mortgages are obligatorily insured in the event of death while consumer credits are not always insured. It is therefore important to take stock of your situation with your bank (or the lender) and your notary in charge of the estate. He will be able to propose solutions adapted to your situation.
Your insurance company may also inform you of your rights if you or your spouse had taken out a life insurance policy. You have 8 days to notify the bank and one month for insurance and credit organizations.
Real estate loans or consumer loans in the name of the deceased
If the deceased had credits in progress, the refund of these credits is borne by the heirs if no death insurance has been taken out. If, on the other hand, consumption and real estate loans are covered by such insurance, the insurance company will pay the monthly repayment according to the terms of the contract.
To find out if the loan is covered by death insurance or not, ask the lender. Then, for the insurer to take over the monthly payments, you must declare him the death.
Real estate loans or consumer loans co-borrowed with the deceased
As for a credit only the name of the deceased, if you do not have life insurance, the bank will ask you to repay the entire loan. This is called solidarity between co-borrowers.
On the contrary, if you have taken out life insurance, the extent of coverage can vary, usually depending on the income of both parties. Thus, the widowed person only reimburses his share of the consumer credit or mortgage credit. However, some insurances provide full capital and interest coverage in the event of the death of one of the borrowers. In this case, the widowed person will not be required to repay the credit.
To note :
Disability death insurance is offered (often imposed) for the credit buy-back organizations. This insurance makes it possible to guarantee the repayment of the credit to the bank, in the event of death of the borrower, without the heirs having to bear the weight of the monthly payments. Wishing to limit the risks taken by its customers, does not grant repurchase of credits to retirees without life insurance.