Broker Check

Death and Debt

| April 05, 2017

Household debt levels are once again a major concern in the US. According to a recent report by, the high levels of household debt are evident in the amount owed by people who passed away in 2016. reported that 73% of Americans were in debt when they passed away. The majority (68%) had credit card balances while 37% had mortgage debt, 25% had auto debt, 12% had personal loans, and 6% had student loans.

For those who passed away with debt, the average amount of total debt was $61,554. The average mortgage debt was $48,679, credit card balances averaged $4,531, auto loans averaged $17,111, personal loans averaged $14,793, and student loans averaged $25,391.

The high levels of debt held by deceased individuals is creating a number of challenges since some do not have the assets required to pay off their debts, much less pay for funeral expenses. In other cases, the money is locked up in illiquid assets, such as real estate, leading to a cash shortage for executors who are attempting to settle an estate. It is important to note that heirs are not required to pay off the deceased’s debts but, all debts must be paid before any assets can be distributed.