my loan is in my deceased dads name

by mike
(north carolina)

my motorcycle loan is in my dads name and he just passed away friday wat happens with the loan? i have been paying the payments all along so wat happens now?

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Feb 09, 2012
 my loan is in my deceased dads name
by: Debtcollectionanswers

Sorry about your loss.

When someone dies owning assets, a process called probate must be initiated. If the person wrote a legally valid will, it must be filed with the probate court by the individual named in the will as executor. Otherwise, a representative of the deceased should file a special form with that court.

Once the probate process has begun, all of the deceased's assets and debts are inventoried, the deceased's creditors are notified of the death and the creditors are given an opportunity to file claims with the court. Then, the legally valid claims are paid using the assets in the deceased's estate. This may require the sale of some of the assets.

If there is not enough money in the estate to pay everything the deceased owed at the time of his death, then those debts go unpaid. The exception would be if a debt were a joint debt in which case the other borrower would be responsible for paying the outstanding balance.

Some assets are not included in the probate process in NC, however. They include assets that are held in joint ownership with rights of survivorship, and assets like a 401k, IRAs life insurance policy or annuity. Also assets that are in a trust do not usually go through probate.

What all of this means to you is that if your father was the only one on the note for the motorcycle and if the loan is not paid off during the probate process, then the remaining balance on the loan will be forgiven and you are not legally obligated to pay it. Even so, it's possible that debt collectors may contact you for the money, assuming the bank that made the loan turns the debt over to a collection agency. However, if you were not on the note, you do not have to pay the money regardless of what a collector may tell you. To learn more about this subject, go here deceased person’s debt FAQ. And, if you have additional questions, contact a probate or estate planning attorney in your area.

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