# What prevents old/dying people from taking out a bunch of loans and giving the money away before they die? **URL:** \ **Category:** Factual Questions\ **Created:** [November 10, 2021, 5:57am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095 "2021-11-10T05:57:03Z")\ **Posts on this page:** 16\ **Page:** 2
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [November 10, 2021, 11:07pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/21 "2021-11-10T23:07:00Z")
When my mother died she had a couple of credit cards that she rarely used, but they would have allowed £15k credit between them. She lived in a rented house and her furniture was worth a few hundred at best. Credit cards were easier to get back then than they are now, but with many years of good credit history and living at the same address for decades, I suspect that an elderly person could easily get £50k credit. Add in some ‘payday’ loans and they could live pretty well for a year or more by maxing out the cards and paying the minimum whenever they got insistent, and there would be very little the lenders could do about it. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [November 10, 2021, 11:46pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/22 "2021-11-10T23:46:58Z")
I’d also be worried that an unscrupulous lender without any obvious security for their loans might have unobvious security, possibly including a guy with a length of pipe who repossesses kneecaps as collateral. ---
**Author:** ![pkbites](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pkbites/32/204_2.png) [@pkbites](https://boards.straightdope.com/u/pkbites)\ **Post date:** [November 11, 2021, 12:33am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/23 "2021-11-11T00:33:49Z")
Back in the mid-90’s I knew a guy who had well over 40 credit cards. They just kept approving and sending them to him even though he didn’t own any real assets and had a low paying job. Each card had a cash advance amount of 5K. He said he was going to max out the cash advances and then declare bankruptcy. Don’t know if he ever did or if that would even work. He said he was going to claim he lost the quarter mil playing penny slots. ---
**Author:** ![Spiderman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spiderman/32/230_2.png) [@Spiderman](https://boards.straightdope.com/u/Spiderman)\ **Post date:** [November 11, 2021, 4:28am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/24 "2021-11-11T04:28:18Z")
> [@Machine\_Elf](#): > > AIUI, part of settling an estate is to publicly announce the person’s death (usually with an obituary in the newspaper), which constitutes sufficient notice for lenders to file claim against the estate. After a sufficient waiting period, the decedent’s will is executed, or if there’s no will, the probate court settles the estate. If lenders have made their claim, they may get paid from the estate (assuming the estate can produce sufficient funds). Mortgage and auto lenders can either repossess the collateral, or expect the executor to pay off the outstanding amounts of those loans. But if there’s not enough money in the estate to pay outstanding unsecured loans, then the lenders of those outstanding loans have no legal claim against the survivors. Nit: An obit is a news story, reserved for (in)famous people or people who did something remarkable. Death notices are paid advertisements informing the public of someone’s passing & typically details of their funeral / memorial service. As they usually only list name & town & not whole address they are not sufficient for a creditor to know it was their client. ie. How many John Does or Jane Smiths are there in NYC? ---
**Author:** ![md-2000](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@md-2000](https://boards.straightdope.com/u/md-2000)\ **Post date:** [November 11, 2021, 10:14pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/25 "2021-11-11T22:14:28Z")
The only reason for an elderly person to repay their loans is that they need to keep living. If they know they are dying shortly, why bother? Why? Because their debts are settled against their assets. If they have nothing, no big deal. If they have even just some equity in their mortgaged house, then the creditors get it before the heirs. The problem with dementia is - I presume anyone (relative who benefits?) who assists the elder person in obtaining a loan or such, knowing they are not competent, is guilty of assisting the crime of fraud - or being the principle, if it’s obvious to the people making the loan that they are putting the elder person up to it. I do wonder what those “quickie” loan places have for checking someone’s eligibility - certainly they will see whether the person has income, other assets, etc. if they do a credit check. There are enough unreliable people, particularly those that use the service, that they must have a means of verifying to total deadbeats. I suppose if you know you’re going to die soon, and have no assets or used them all up, then using credit and then letting death cancel the debt is one strategy. > [@bob\_2](#): > > I suspect that an elderly person could easily get £50k credit. Add in some ‘payday’ loans and they could live pretty well for a year or more by maxing out the cards and paying the minimum whenever they got insistent, and there would be very little the lenders could do about it. most credit cards have approx. 20% (sometimes higher) interest rate. So that would imply £10k/yr or more, about £1k a month just in minimum payment. IIRC you need to pay the minimum 10% _or_ that plus the amount over your limit, and if your debt goes up by £1,000 a month, you need a certain amount just to stay alive. It’s a very short-term strategy. you cards will be declined until you have your account out of arears. ---
**Author:** ![Sigene](https://avatars.discourse-cdn.com/v4/letter/s/df788c/32.png) [@Sigene](https://boards.straightdope.com/u/Sigene)\ **Post date:** [November 12, 2021, 12:43am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/26 "2021-11-12T00:43:58Z")
I’m pretty sure in many states, the surviving spouse would be on the hook for any credit card debt ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [November 12, 2021, 1:02am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/27 "2021-11-12T01:02:32Z")
> [@Sigene](#): > > I’m pretty sure in many states, the surviving spouse would be on the hook for any credit card debt This article indicates that the answer is, “it depends,” and there are only ten states in which the community property law would apparently apply to credit card debt. > [@](#): > > Although you’re generally not responsible for paying credit card debt after a relative or loved one’s death, there are some exceptions, including the following circumstances: > > - **You co-signed a credit card account with the deceased person.** In this case, you would be responsible only for the debt on that particular card. > - **You had a joint credit card account with the deceased person.** Again, you would be responsible only for the debt on that specific card. > - **You’re the surviving spouse and live in a community property state** like Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Oklahoma (if a special agreement is signed), Texas, Washington and Wisconsin. The obligation would only be for community property, but not separate property the surviving spouse may have. > - **You’re the deceased person’s spouse and state law requires that you pay for the debt** , like certain [healthcare expenses](https://www.creditkarma.com/advice/i/medical-debt-after-death) paid for with a credit card. > - **You were legally responsible for administering the estate** and didn’t comply with certain state probate laws. > > Credit card authorized users aren’t usually responsible for credit card debt after a relative’s death unless one of the rules above applies. That’s because authorized users were allowed to use the card but didn’t formally agree to being responsible for paying off the balance. > **[Credit card debt after death: Who’s responsible and what’s forgiven?](https://www.creditkarma.com/credit-cards/i/credit-card-debt-after-death)** > > Credit card debt typically isn’t passed on to relatives after death, but there are exceptions to this rule. Learn more. ---
**Author:** ![Drum\_God](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/drum_god/32/44_2.png) [@Drum\_God](https://boards.straightdope.com/u/Drum_God)\ **Post date:** [November 12, 2021, 1:02am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/28 "2021-11-12T01:02:34Z")
When my father in law died, we used the money he had in the bank to pay his final credit card bill, final cell phone bill, and a few other odds and ends. With each payment, we closed the related account. It was really quite easy. The difficulty has been knowing for sure that all of his medical bills have been settled. I had a friend who was diagnosed with a terminal form of cancer. He did, in fact, die about eleven months after diagnosis. In his waning months, he and his wife went to Sears and bought all new kitchen appliances. They put it on a credit card with his name and purchased the credit life policy that was offered. In the few months of life he had, they made the credit card payments (including the life premium) on time. When he passed on, the credit life paid the remainder of the amount owed. No one ever lied about anything and he answered every question put to him honestly. Given he was really getting a raw deal out of life, I didn’t feel too bad that Sears was taking the hit. Of course, Sears only lasted a few years longer than he did. ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [November 12, 2021, 1:09am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/29 "2021-11-12T01:09:49Z")
> [@Drum\_God](#): > > In his waning months, he and his wife went to Sears and bought all new kitchen appliances. They put it on a credit card with his name and purchased the credit life policy that was offered. In the few months of life he had, they made the credit card payments (including the life premium) on time. When he passed on, the credit life paid the remainder of the amount owed. No one ever lied about anything and he answered every question put to him honestly. In that case, it’s on them if they issue credit life policies without asking for information about how long the client’s life is likely to be. I guess that’s the kind of brilliant management that put Sears where it is today. ---
**Author:** ![SpacemanSpiff\_II](https://avatars.discourse-cdn.com/v4/letter/s/e19adc/32.png) [@SpacemanSpiff\_II](https://boards.straightdope.com/u/SpacemanSpiff_II)\ **Post date:** [November 12, 2021, 2:53pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/30 "2021-11-12T14:53:27Z")
> [@Steve\_MB](#): > > In that case, it’s on them if they issue credit life policies without asking for information about how long the client’s life is likely to be. I guess that’s the kind of brilliant management that put Sears where it is today. I highly doubt it. The approach Sears used makes a lot of sense to me. The value of a payout on such a credit life policy used to purchase some kitchen appliances is likely extremely low, as life insurance policies go. The cost of doing substantial life insurance underwriting on a policy that size would far exceed the value that would be gained. Plus you would alienate a lot of customers by probing them about how soon they’re going to die. It’s much more likely that Sears (or whichever insurer underwrote the policies, if not them) simply priced the premiums high enough to reflect that on rate ocasions people with terminal illnesses would “take advantage”. ---
**Author:** ![MulderMuffin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldermuffin/32/2862_2.png) [@MulderMuffin](https://boards.straightdope.com/u/MulderMuffin)\ **Post date:** [November 12, 2021, 3:21pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/31 "2021-11-12T15:21:36Z")
Back in the 90’s I worked at a bank. I don’t know if they still exist, but back then there were a TON of payday lenders of the sort that you wrote them a check for $125, they gave you $100 cash, and on a pre-agreed near future date they’d cash the check, essentially charging $25 for a $100 loan for a week or two. If you didn’t pay (the check didn’t clear), they’d add another fee, and another, and another, until you could owe several hundred for that original $100 loan. This could get really expensive really quickly, and a lot of people took out new loans to pay old loans for months on end in a viscous cycle. I personally talked to many people who said their bankruptcy attorney told them to hit up every site they could to amass the amount needed to pay him his service fee of $1500 or so, then add all of the loans into the bankruptcy case so they didn’t have to be paid back. On the one hand, I found this dishonest and thought it should be illegal. On the other hand, I put some of the blame on the lenders themselves, who were bottom feeders making money from taking advantage of desperate people in need and pushing them further into debt. Scammy lender, scammy lawyer, desperate people looking for a way out of a bottomless debt hole they’d dug themselves into… none of it was good. ---
**Author:** ![Just\_Asking\_Questions](https://avatars.discourse-cdn.com/v4/letter/j/ba9def/32.png) [@Just\_Asking\_Questions](https://boards.straightdope.com/u/Just_Asking_Questions)\ **Post date:** [November 13, 2021, 6:30am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/32 "2021-11-13T06:30:41Z")
> [@Drum\_God](#): > > Of course, Sears only lasted a few years longer than he did. It’s your friend’s fault! 🙂 ---
**Author:** ![Drum\_God](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/drum_god/32/44_2.png) [@Drum\_God](https://boards.straightdope.com/u/Drum_God)\ **Post date:** [November 13, 2021, 10:28pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/33 "2021-11-13T22:28:53Z")
> [@Just\_Asking\_Questions](#): > > It’s your friend’s fault! 🙂 When Sears was selling the Sears Tower in Chicago and moving out to the suburbs, I was way behind on my Sears credit card bill. They called and they made it sound like it was all my fault they were having to sell the Tower. ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [November 13, 2021, 10:42pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/34 "2021-11-13T22:42:23Z")
Ironically, this news story crossed my Facebook feed just now. I admit I was surprised that there were any Sears stores still open at all – according to the article, the current owner of Sears (and Kmart) has declined to say exactly how many stores remain, but the answer appears to be “very few.” > **[Sears at Woodfield Mall, Illinois' Last Remaining Store, Closes Sunday After...](https://www.nbcchicago.com/news/local/sears-at-woodfield-mall-illinois-last-remaining-store-closes-sunday-after-50-years/2683502/)** > > After serving shoppers from around Chicagoland for decades, Illinois’ last remaining Sears store is closing its doors for good this weekend. ---
**Author:** ![commasense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/commasense/32/3017_2.png) [@commasense](https://boards.straightdope.com/u/commasense)\ **Post date:** [November 15, 2021, 4:08am UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/35 "2021-11-15T04:08:13Z")
> [@MulderMuffin](#): > > in a viscous cycle. Auto correct strikes again! ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [November 15, 2021, 12:41pm UTC](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095/36 "2021-11-15T12:41:23Z")
It’s Sid. [Previous page](https://boards.straightdope.com/t/what-prevents-old-dying-people-from-taking-out-a-bunch-of-loans-and-giving-the-money-away-before-they-die/954095.md?page=1)