Can a bank transfer parents credit card debt to the children if the parent dies?

[Waaib]

As per topic ...

[Archer]

Why wouldnt it?
If your parents had a house in their name and still owed the bank R500k, the bank isnt going to write off that debt just because your parents die. Harsh maybe, but thats the way it works

[alisiaoh]

No they cannot unless you signed as a surety for your parents' debt

[Kosmik]

As per topic ...

No.

The bank can charge the estate the debt which must be settled prior to the disbursement of the estate to the benficiaries but unless the debt is in the childs name ( impossible as a child cannot be liable for debt by our laws, hence the mandatory guaridan signature etc ) then it could be.

How old a "child" are we talking about? If it's a minor, no however if it's a adult and the "child" aggreed to the debt ie: transfer of bond into childs name, then they can quite easily be liable as the debt is not actually the parents but the childs.

[Waaib]

So ... Parent dies with no assets but a heap of debt. Bank attaches debt to children who had nothing to do with the debt. Attaching to the estate (insolvent estate I'd think) would make sense. Attaching debt to children doesn't seem right to me?

[lucifir]

A house I can understand, they can take over the house, but a credit card debt?? I would not think so, but I do not know the law.

[Jola]

Why wouldnt it?
If your parents had a house in their name and still owed the bank R500k, the bank isnt going to write off that debt just because your parents die. Harsh maybe, but thats the way it works

Doesn't work like that.

They can claim from the estate, but they cannot claim from the children.

If the estate is big enough to meet the debts, then that is fine, but if the debts exceed the estate then it is tough luck for the bank !

[Waaib]

How old a "child" are we talking about? If it's a minor, no however if it's a adult and the "child" aggreed to the debt ie: transfer of bond into childs name, then they can quite easily be liable as the debt is not actually the parents but the childs.

Adult children. E.g Parents die aged 75 and kids are in their 40's. No mortgages or assets involved. Essentially parents ran out of cash and lived on credit cards till they died.

[Jola]

Adult children. E.g Parents die aged 75 and kids are in their 40's. No mortgages or assets involved. Essentially parents ran out of cash and lived on credit cards till they died.

Nope - tough luck for the bank - they didn't do their work properly !

[Archer]

Doesn't work like that.

They can claim from the estate, but they cannot claim from the children.

If the estate is big enough to meet the debts, then that is fine, but if the debts exceed the estate then it is tough luck for the bank !

Loophole time!! So all you gotta do is get your parents/grandparents to give you lots of gifts and use their CC to pay for it? Obviously need to get the timing right

Live and learn I guess. Always thought the debt has to go somewhere, no matter what form it takes.

[Kosmik]

Adult children. E.g Parents die aged 75 and kids are in their 40's. No mortgages or assets involved. Essentially parents ran out of cash and lived on credit cards till they died.

Then sorry for the bank. Only the person who signed surety for the cards is liable, bank is actually at fault for not detecting a defaulter pattern. The worst the bank can do is go against the estate.

Did the children sign surety?

[Nick333]

I actually had this argument once. Not unless you signed surety for the credit card. You are a separate legal entity from your parents. You can't be liable for someone else's debt unless you are a co-signer for a specific debt.

It's really wierd to me that people would think otherwise. If one was liable for your parents they could essentially sell you into a type of slave because of your genetic heritage.

[Kosmik]

Live and learn I guess. Always thought the debt has to go somewhere, no matter what form it takes.

Thats the whole purpose of the Credit Act, to protect both the public and the banks from loaning money to people who cannot afford to pay it back. If they had access to the funds , it's because the bank deemed that they would be able to pay the debt back or there was enough collaterol to claim on in the case of death/defaultment. Also a lot of CC's request a life policy for the card, ie: you pay a small premuim a month that settles any outstanding credit debt in case of death.

[alisiaoh]

Doesn't work like that.

They can claim from the estate, but they cannot claim from the children.

If the estate is big enough to meet the debts, then that is fine, but if the debts exceed the estate then it is tough luck for the bank !

Nope - tough luck for the bank - they didn't do their work properly !

yup the bank will have to write that debt off unless they can get something out of the parents' estate

[Waaib]

Did the children sign surety?

No-one signed surety. It's a colleague that is in this pickle and the bank (I think an FNB branch staffer) told her that the debt will go to the children. I know there are if's and buts like assets and estates etc but I was sure that the advice was wrong.