Am I Liable After a Death?

Steve has a fiancée with terminal cancer. She is worried that he will be stuck with her student loan debt when she dies, but he says he doesn't care. Dave tells him why he has nothing to worry about.

QUESTION: Steve in Indiana has a fiancée who has terminal cancer. She is worried that he will be stuck with her student loan debt when she dies, but he says he doesn’t care. Dave tells him why he has nothing to worry about.

ANSWER: That won’t happen. It’s good that you don’t care because it means you have your priorities right.

To start with, any of her debt does not jump over on you as a husband just because you get married. If you signed the note with her, then you would be liable.

The second part of that situation is unique to student loans. Student loan debt doesn’t even survive you at all. Let’s say she had $100,000 in the bank and a $100,000 student loan debt. If it was a $100,000 credit card debt, you would have to pay that upon her death out of her assets before you would receive anything. But student loans are completely forgiven upon death. So nothing that she owns would be sold to pay on the loan. The student loan just takes zero upon her death.

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