You’re probably going to die with some debt to your name. Most people do. In fact, 73 percent of consumers had outstanding debt when they were reported as dead, according to December 2016 data provided to Credit.com by credit bureau Experian. Those consumers carried an average total balance of $61,554, including mortgage debt. Excluding home loans, the average balance was $12,875.
The data is based on Experian’s FileOne database, which includes 220 million consumers. (There are about 242 million adults in the U.S., according to 2015 estimates from the Census Bureau.) To determine the average debt people have when they die, Experian looked at consumers who, as of October 2016, were not deceased, but then showed as deceased as of December 2016. Among the 73 percent of consumers who had debt when they died, about 68 percent had credit card balances. The next most common kind of debt was mortgage debt (37 percent), followed by auto loans (25 percent), personal loans (12 percent) and student loans (6 percent).
These were the average unpaid balances: credit cards, $4,531; auto loans, $17,111; personal loans, $14,793; and student loans, $25,391.
So, who’s paying that off?
Their kids, depending on where you live.
However, almost 30 states have instituted laws that require children to pay some part of their parent’s unpaid medical bills if there are insufficient funds in the estate.
If you leave your home to one of your children and that home has a mortgage, the mortgage isn’t wiped out. Instead, your child will be responsible for making monthly mortgage payments just as you would have.
Most other debt is covered by whatever is left in the estate, meaning that after the creditors take their cut, your inheritance will be small or nonexistent.
63% Of Americans Don’t Have Enough Savings To Cover A $500 Emergency
The car brakes go on the fritz. The refrigerator stops refrigerating. The dog gets his paws on a batch of chocolate chip cookies and earns himself a trip to the vet ER.
These are just three of any number of things that could go wrong during the course of the year. Recovering from any one will set you back about $500, which means these scenarios fall closer to the “undesirable inconvenience” category than they do the “massive calamity” one. And yet, nearly two-thirds of Americans do not have enough money in savings to cover the cost of a single one of these unplanned expenses.
According to a brand new survey from Bankrate.com, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.
It’s not news that Americans are terrible savers. In November, Pew Charitable Trusts reported that one in three American families have no savings at all. In December, Magnify Money released the results of a study that found that 56.3% of people have less than $1,000 in their checking and savings accounts combined. Sensing a trend? You should: America’s saving struggle has been a problem year after year after year.