When a person is unable to pay their debts they are?
Daniel Santos
Updated on January 27, 2026
‘A person who is unable to pay his/her debt is called a ‘bankrupt.
What is it called when you fail to pay a debt?
Default is the failure to repay a debt, including interest or principal, on a loan or security. A default can occur when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments.
What were some of the consequences for being unable to pay one’s debts?
If you fail to make payments on your debt it will have a negative effect on your credit score. Creditors report delinquent payments to the credit bureaus who in turn lower your credit score accordingly. A low score can impact your ability to get housing, buy a car and in some cases gain employment.
When does a condition of financial distress occur?
When a condition of financial distress occurs, it must be addressed immediately in order for the condition not to worsen. Financial troubles often lead to more financial troubles if they cannot be promptly remedied.
What does intestate the condition of a deceased person mean?
The condition of the estate of a deceased person which is unable to pay the debts of the decedent and/or the estate. Intestate The state or condition of dying without having made a will.
What happens to credit card debt when a person dies?
Credit cards on the other hand are unsecured debts. When the cardholder dies, there is nothing securing the borrowed money that needs to be paid back. This means that the credit card company has to take a loss. If your parents die and leave debts without enough money to cover them, creditors may come after you to collect.
Who is responsible for a joint credit card debt?
However, if you are a joint account holder on any credit cards or loans, you would be liable for paying off the amounts due. When you open a joint account, it means that you and whomever who are sharing the account with are equally liable for paying off any debts incurred. This is not the case if you were an authorized user on the account.
