From: Louis Newstrom (louisnews@comcast.net)
Date: Mon May 27 2002 - 09:14:03 MDT
From: "Dossy" <dossy@panoptic.com>
>
> Maybe I'm mistaken, but in the US, if parents rack up debt and
> pass away (with insufficient life insurance to cover their debts)
> the kids (if any exist) are left paying the debts, no?
>
I'm not a lawyer, and I don't even play one on TV...
But here goes anyway...
I think this misconception comes from inheritance laws. What often happens
is that the parents owe money on a house. The kids "inherit" the house.
They actually have the right to walk away and say "That's not MY debt." But
most don't.
They are so used of calling it "my parent's house" that they forget that it
is NOT their parent's house until the mortgage is paid off. It still
belongs to the bank. So what is really happenning is that the kids agree to
take over the mortage. They continue the payments, and at the end of the
loan, they get the house.
What they perceive happening, is that they inherit their parents debt. I've
never gone through this, but I suspect that the banks draw up the papers and
phrasology so as to naturally assume the kids will do this and not make a
point of telling them they don't have to.
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