It’s stressful living with debt, but imagine dying with a debt of $62,000? According to a new survey, that’s exactly how much Americans are leaving behind, on average, when they pass.
“In fact, 73 percent of consumers had outstanding debt when they were reported as dead, according to December 2016 data provided to Credit.com by credit bureau Experian. Those consumers carried an average total balance of $61,554, including mortgage debt. Without home loans, the average balance was $12,875,” reported USA Today. Experian’s FileOne database, which includes 220 million consumers, was used to determine the debt.
When breaking down the numbers, among the 73 percent of consumers who died having debt, about 68 percent still had credit card balances; 37 percent had mortgage debt; 25 percent had auto loans; 12 percent still owed personal loans; and 6 percent had outstanding student loans. “These were the average unpaid balances: credit cards, $4,531; auto loans, $17,111; personal loans, $14,793; and student loans, $25,391,” reported USA Today.
This debt most often is passed on to loved ones if your estate cannot pay off the debts. “Debt belongs to the deceased person or that person’s estate,” said estate planning attorney Darra L. Rayndon, in the USA piece. This is just one major reason wills are important to have.
“If you don’t write a will, your state of residence will write one for you should you pass away,” added James M. Matthews, a certified financial planner and managing director of financial planning firm Blueprint. “Odds are the state laws and your wishes are different.”
And while you’re alive, it’s important to have a solid handle on your debt. “One way to make sure debt doesn’t make a mess of your estate is to stay out of it. You can keep tabs on your debt by reviewing a free snapshot of your credit report on Credit.com, in addition to sticking to a budget that helps you live below your means. You may also want to consider getting life insurance and meeting with an estate planning attorney to make sure everything’s covered in the event of your death. If you’re worried about leaving behind debt after death, here’s more on how protect your loved ones,” reported USA Today.
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