Decommissioning a debt after the heir's death is simply a subject that raises many questions and ambiguities. There are no direct provisions in the Polish legal strategy that regulate this issue. This means that the decision to discontinue the debt rests with the bank and depends on its recognition. Therefore, in order to increase the chances of a affirmative examination of the application, heirs should prepare a detailed argument concerning their hard life situation.
Who can apply for a waiver?
The Financial Ombudsman points out that a debt waiver application can only be made by heirs who have accepted the inheritance and thus presume work for the debts of the deceased. The letter to the bank should include:
- Data of the applicant,
- Details of the credit agreement,
- Reasons why the bank should consider decommitment.
Detailed description of the life situation
The proposal should contain a detailed description of the current life, financial or wellness situation of the heir. Typical arguments may include:
- Disability,
- Long-term illness,
- The death of a co-creditor,
- The situation in which the deceased was the sole supplier of the family.
The practice of banks
The banks do not have a uniform practice of redeeming loans after the heir's death. Each application shall be examined on a case-by-case basis and the life situation of the heir shall be a key factor. The redemption of the debt is not automatic and depends on many factors, including the policy of the bank.
Possible scenarios
The Bank may take different decisions on credit redemption:
- Total debt waiver: In this case, the heirs are exempted from the work to repay the remaining debt.
- Decommitment of part of the loan: The heirs will gotta repay the remainder of the obligation. In specified situations, agreements are frequently concluded laying down the arrangements for the payment of the remainder of the debt.
Tax duty
It should be borne in head that the write-off of the loan, even in part, creates a taxation obligation. From the position of taxation law, redemption of credit is treated as income of the debtor. This means that the amount of the decommitted debt represents the value of the income on which the income taxation on individuals must be paid.
Summary
Decommissioning a debt after the heir's death is simply a complicated procedure which requires an individual approach and careful preparation of the proposal. A detailed presentation of the hard life situation and the justification of the proposal is crucial. Although the decision to waive the debt lies with the bank, the heirs have the chance to negociate and present their arguments which may persuade the bank to consider their request positively.
Application example
If Jan Kowalski, as heir to the deceased father, who was the sole host of the family, applies for the waiver of his father's mortgage loan, he should accurately describe his life and financial situation. If Jan is simply a student with no fixed income and his parent is disabled, the bank may consider giving up any or all of the credit, given their hard situation.
Important case law
It is besides worth recalling the case law of the courts, which may be helpful in arguing. For example, in its judgment, the ultimate Court stated that banks should take into account the hard life situation of the heirs erstwhile examining credit cancellation applications.
Thanks to sound preparation and appropriate reasoning, the heirs have a chance to get a credit write-off, which can importantly improve their life situation after losing a loved one.
You have questions or request aid – welcome to contactOh, my God!
The information on the website is simply a description of the legal position at the date of publication and is not a legal advice on an individual case. The legal position of publication may change. The law firm is not liable for utilizing an alert to solve legal problems.Read more:
Retirement of the debt after the heir's death: What should I know?
