What should I do if I have an inheritance with debts?

We are often contacted by Clients with the question of what to do when they have received an inheritance, but it turned out that the testator had debts. 

Taking into consideration that according to the Article 1218 of Civil Code both rights and obligations of the testator are transferred to the heirs, we recommend to estimate whether there is a sense to accept the inheritance. However, there is an inheritance that one can not give up, such as an apartment. So let’s consider what you can do when you have inherited an apartment, and related debts.

Note: Legal support services for the inheritance procedure and protection of interests in court can be provided by our lawyers only within the city of Kyiv.

If the inheritance opened outside the city of Kyiv, we can provide you with legal advice and development of draft documents, for example,primary allegation.

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Inheriting a debt for the utility services

Despite the widespread belief that it is impossible to inherit an apartment until the utility debt is paid off, this is not actually true. Only by inheriting rights, a person also inherits the liabilities of the inheritor. Consequently, the testator’s debt for utility services is not an obstacle to accept inheritance. 

What must the heir do with the debt? The only thing we can advise is to apply to the utility service providers and agree on debt restructuring and gradual repayment. Unfortunately, it is impossible to write off a debt for utility services, so you have to pay them off, if you are going to live in that apartment.

Can I sell an apartment with a debt for utility services? Yes, you can. But the purchase and sale agreement must stipulate that the obligation to pay the debt for utility  services is transferred to the buyer. 

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Our lawyers can draw up such an agreement and support the singing procedure at a notary. It is extremely important to properly convey to the buyer the terms of such an agreement so that he/she understands what he is doing and you don’t have any problems associated with misinterpretation of the agreement in the future. The fact that the buyer understands the terms of the agreement should be specified in the agreement. 

We will provide you with legal assistance for the sale of the apartment with utility debt and ensure that the procedure is conducted in the framework of the law.

Inheriting credit debts

As noted above, by accepting an inheritance, the heir inherits the testator’s debt.

Important nuances about inheriting credit debt:

The death of the debtor is not a basis for suspending the accrual of interest on the loan. So, the heir may not know that the testator had an outstanding loan. However, a person who is unaware of a debt may not escape obligation of paying interest on the credit, including those accrued already after the opening of the inheritance.

Time limits for filing claims against heirs. If the creditor didn’t have time to present its claims to the debtor’s heir within the period specified in paragraphs 2 and 3 of Article 1281 of the Civil Code, its claims can be ignored. These deadlines are as follows: 

• 6 months from the date the heir receives the certificate of right to inheritance;

• 6 months from the day when the creditor found out that the heir had received such a certificate or accepted the inheritance, if it did not know and could not have known before.

And if everything is clear with the first period, then the concept “from the day the creditor learned about...” is quite abstract. In fact, it means that after you receive the inheritance, it may take years before the bank learns about your inheritance. And from that moment on, it has six months to present you with claims. The key condition in this case is that the bank really did not know and could not know that you accepted inheritance.

If you want to prove the contrary, namely - that the bank at least could have known about your accession to the inheritance, you will have to go to court. Therefore, when you come into an inheritance, if you do not know for sure whether the testator had loans, you should make a small publication in the media. Such a publication can be a powerful argument in your favor.

If the bank does file claims against you or the case goes to court, our lawyers will take care of:

• The correct selection of arguments about the bank’s ability to obtain such information; 

• A properly filed defense policy;

• The proper preparation of all documents to protect your interests in court, etc.

If you need help with the inheritance that you inherited with a debt in court, don’t hesitate to call us. Our specialists will analyze your situation, provide legal advice, and if necessary, will make a statement of claim and represent your interests in court. And if you are the defendant, we will protect your interests.