 TITLE: What Happens to Debt When You Die CONTENT: Who Is Responsible for Debts of a Deceased Relative?\n----------------------------------------------------\nAfter you die, your debts will be classified as secured and unsecured. Secured loans such as mortgages and auto loans are backed by collateral—assets that can be taken by the lender if they don't get repaid. Most credit cards, student loans and other unsecured loans lack collateral.\nDepending on the assets of your estate and the provisions you make before you die, your estate could entirely pay off your secured debts or make installment payments through a trust or other legal entity. Also, your property may be sold, refinanced or turned over to the lender to take care of the debt.\nAny unsecured debts that belong to you will likely need to be paid from your estate. If you die with $10,000 in your savings account and $5,000 in student loan debt, for example, the lender would usually be paid before the remaining $5,000 can be distributed to your heirs.\nIf there are multiple creditors with total claims greater than the amount held by your estate, the laws in your state will determine who gets paid and how much. Your unsecured debts will go unpaid if your estate lacks sufficient funds to cover them. END