Question: A year ago, my father borrowed from a bank, and the loan was supposed to be repaid within five years. However, two months ago, my father died, and now the bank has filed a lawsuit against me before the court to demand the value of the loan and the interest. Is the bank legally entitled to file a lawsuit against me, and am I considered legally responsible for the debt of my deceased father? Is the debt not considered terminated once the creditor dies?
Answer: You are legally responsible for your deceased father’s debt as per the shares you received from the inheritance - not from your personal funds.
The debts of the deceased are not terminated by his death. The term of the debt falls with the death of the debtor, and it is not transferred to the heir, so the debt becomes due even if its term is not due.
The debts of the deceased are settled from his estate, after his death, and if there is something left after paying off the debts in the estate, it devolves on his heirs, and if the debts take up the entire estate, nothing of it is transferred to his heirs. If the estate is not sufficient to pay all the debts of the inheritor, then the heirs are not asked about their payment from their personal money and they are not legally required to do so.
Article 8 of the Resolution No. 3 of 202, adopting the Regulatory Procedures in Personal Status Matters in Dubai Courts concerning Inheritance states:
(1) If the debts of the estate are established by a final judgment or by the approval of all the heirs, they are paid from the cash money of the estate. If it was not sufficient to pay the debts, the chattels of the estate will be sold, and then its real estate and immovable properties, in accordance with the provisions of Article 294 of the personal status law.
(2) If the debts are disputed or denied by some of the heirs, they shall be settled after a final decision is made by the competent court.
(3) The judge shall, when necessary, take whatever step is necessary to preserve the estate and order the deposit of cash money and financial securities and valuables at the treasury of the court in whose jurisdiction the estate’s property, totally or the largest part of it, is located in order to meet the amount of the claimed debt and distribute the remainder of the estate among the heirs.