It is important for anyone to manage debts when they have them, and seniors are no exception. To manage debts before death is something that all seniors must consider and know how to do. Therefore, in order to pay off debts before death, you should manage your debts no matter your current stage of life so that you will be as close to debt-free when you pass away as possible. There are also services that can help with debt management. In the sections below, we will discuss how to manage debts before dying as well as what happens to your debts when you die.
How to Manage Debts Before Dying
The best way to manage debts before death is to pay off as much as you can. There are many ways to manage debts, but paying off as much as possible is possibly the most important, if simplistic, goal.
Managing senior debts, of course, is more complicated than this overarching goal. If you are attempting to manage debts, then learning a few debt management tactics can help. Seniors can pay off debts before death by following three main steps:
- They can craft and follow a clear and accurate budget for their debt management.
- They can contact creditors of their debt to work with them on the money owed.
- They can seek debt management help from assistance professionals.
To manage debts well, the first thing you need to do is create an accurate budget. Paying off debts before death is impossible if you are not realistic about your entire financial standing, including the extent of your debt and your ability to pay it off. Start by recognizing your exact income from various sources as well as how much money you spend on debt but also other things. Learn more about managing your debt with a budget by downloading our comprehensive guide today.
You can also pay off debts before death by reaching out to your creditors. You may not realistically be able to manage debts before death, but you may be able to negotiate terms with your creditors. You should contact creditors if you are having difficulty paying off debts in addition to your other necessary expenses. Explain that you are managing your debts and explain your life circumstances that make it difficult to pay the debt. Ask that your debt payments be reduced. You should manage debts as far as you are able, since you will not be able to do so once the debt has been given over to a debt collector. However, if your debt is turned over to a debt collector, you should know that there are laws around when and how they may contact you. While you manage debts, you may request that collectors stop contacting you in writing if you wish.
To pay off debts before death is difficult if you fall behind on your payments, but it is not impossible. Senior debt payment may require reducing your mortgage or other payments with your lender for a temporary amount of time so that you can survive and then later pay off the debt. However, know that you may be required to pay extra after the temporary reduced payment period is over.
If it is hard for you to manage debts before death, you should seek help from an agency. Debt management help is provided by the following types of agencies:
- Housing counseling agencies
- Your state’s Department of Housing and Urban Development
- Credit counseling agencies
- Other debt relief services
If you reach out for debt payment help from an agency such as a credit counseling agency, you may be advised to follow a debt management plan. Debt management plans help seniors repay debts, although you should be well-informed about them before enrolling in one.
What Happens if You Do Not Pay Off Debts Before Death?
To manage debts is a difficult thing for anyone to handle, but particularly so for seniors who do not wish to pass on their debts to relatives. The good news is that even if you do not pay off debts before death, your relatives will not be required to pay them in most cases. Whenever possible, managing debts after your death is handled by your executor or representative, and these debts are paid from your estate rather than from that person’s pocket. For example, money made from the sale of your house and other items may be used to pay off debts. But no one managing your debts is required to personally pay your debts. Further, your loved ones are protected by certain rights from debt collectors who would try to contact them illegally.
If you do not pay off debts before death, your debts do not go away. Unpaid debts before dying are still owed after death. These debts are paid from your estate as much as possible with the help of the will executor, and if any debts remain after your estate has been handled, they are usually left unpaid. No individual is left managing your debts when you pass away. However, there are some exceptions, which you can learn about by downloading our free guide.