Student loan debt in marriage?

[Mass Effect]

I'm getting married soon. I know my fiancee inherits my debt, but if I die, does my debt still die with me even if I'm married or will it become my fiancee's responsibility?

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[Redtwogreen]

If it is a federal student loan, it dies with you (the debt is discharged by the gov't when you die). Otherwise, it depends on the terms of you agreement with your private lender(s). Usually private loans do not die with you.

 

[Mass Effect]

It is a federal loan. I just wanted to make sure my fiancee won't have to pay it if I die after we get married.

 

[RangerBob]

Federal loans die with you. All the private loans I have die with me as well--but some don't as pointed out above.

However, that doesn't mean the banks/debt collectors won't go after your family to recoup the loan. It's pretty sickening, but they have been known to pressure surviving family members into paying loans that they are not legally responsible for. I haven't heard of the government ever doing this.

 

[cpants]

Probably still worth it to refinance. If you are worried about the loan surviving you, just take out a 10 year term life insurance policy for the amount of the loan. Assuming you are healthy in your 30s this will probably cost you 100-300 bucks a year in the amounts most people carry in student loan debt. Cheap stuff! Will be well worth it if you are saving 3 points interest on a couple hundred thousand bucks. Good opportunity to assess your other life insurance needs also.

 

[edmadison]

No one inherits your debts. At most, creditors owning debts that are not forgiven at death may go after your estate for the debt. If your estate has no money, the creditor is done. Of course, that doesn't mean unscrupulous collectors won't try to come after your relatives. Another point -- in the vast majority of situations, life insurance is not part of the estate. Thus, your heirs can keep the life insurance proceeds even if the estate is in debt.

Ed

 

[jacksparrow82]

Get a decent life insurance policy and you won't have to worry about your wife's finances if you die. If you're young and healthy a good term life insurance policy will be pretty darn cheap. If you die, she gets a big fat check (as a physician you should expect a 3-5+ million dollar life insurance policy) and she can invest that money and be taken care of for the rest of her life. A policy like that should cost no more than 120-180 dollars a month if you're healthy and don't smoke. In my opinion its a great piece of mind and its especially important if you end up with kids.

 

[Student Loan Planner]

Term life for about $130 a year probably gets you a $250,000 policy. Seems like that would be a good idea either way.