Ask HN: Dying with debt?

Let&#x27;s say the interest rate on your credit card is around 20% per year. Suppose you max out your credit line and then make the minimum monthly payment for several years (i.e., you&#x27;re paying mostly interest and hardly any principal). After around five years of 20% interest, the credit card company will have gotten back 100% of what it lent you, as interest payments. After that, they&#x27;re making pure profit. So unless you die very soon after racking up your debt, they&#x27;ll have no real losses (although there may be losses deducted for tax purposes; I&#x27;m not sure how that works).<p>People have been dying for even longer than credit cards have been around, so we should expect that this ubiquitous phenomenon has been accounted for in the credit industry&#x27;s business model.

Not sure why this is relevant to HN.<p>When someone dies, their debts don&#x27;t disappear - the debts are paid from the assets owned by the decedent before heirs&#x2F;beneficiaries are allowed to inherit.<p>Credit card balances can be negotiated down after death - but that happens pretty frequently with living people, too, through bankruptcy or otherwise.<p>Lenders don&#x27;t expect that every debt will be repaid in full - it&#x27;s part of the business model.

You&#x27;re worried about credit card companies going bankrupt? That.. does not seem like a very wise worry to have.

There is a moderately scummy debt collection biz complete with &quot;I&#x27;m sure your great aunt would have wanted that debt paid off while she was still alive&quot; complete with hitting up the entire family with the hope of multiple times repayment. Often the claimed debt doesn&#x27;t even exist, or you get five different scammers all who looked up the same prop tax &#x2F; mortgage records. So yeah its a thing. Its a simplification, but unless you&#x27;re married to someone who dies, or you were dumb enough to cosign a loan of someone who dies (often, but not always, there are life insurance policies on that...), you&#x27;re off the hook.<p>I&#x27;m old enough to have seen enough ancestors die (more than just immediate family of course) and there&#x27;s a large business oriented around making sure middle class people never inherit anything. Its hardly a new problem. All of someone&#x27;s net worth is supposed to go to the medical industrial complex, or a couple other places. You can safely assume that whatever boomer generation net worth is, approximately zero is going to gen-x other than the highest net worth of the 1%. Same thing happened with the WWII generation and presumably every generation before them.