Debts are one of the most important financial aspects of your life. You don’t want to die with debt. But what if you do? There are a few things that may happen if you die with debt. And they don’t sound too exciting. Before your estate can be divided according to your will, your debts must be taken care of. This will be done before any assets are distributed to beneficiaries. Anything of value in the estate will also be sold to cover your debts. Think of it this way: the value of your estate will go down if you owe money to other people. In order to calculate the value of your estate, simply subtract the amount of debts from the value of your assets in your estate. One thing to keep in mind is that children or spouses are not responsible for your debt unless they acted as a cosigner. There are a few things you can do if you owe money to other people. List the name of your creditors as well as the amount of debts you owe. If you owe money alongside someone else, list the portion of debt that you are responsible for. You should also appoint a trusted person who will administer your debts.
Although it is true heirs will not be responsible legally for your debts, you should still make a plan for your debts after death. Islamically, a person is still responsible for their debts even after they have died. So it’s best to make a plan for your debts. The Prophet (peace be upon him) refused to pray funeral prayers on a man with debts until a man offered to pay off his debts. The Prophet (peace be upon him) also said: “The soul of the believer is held hostage because of his debt until it is paid off.” Narrated by al-Tirmidhi (1078). Don’t take this matter lightly!