Many banking experts claim that the debts of a deceased client are extinguished with obligations if he has no financial means in the account, inheritance, from which it would be possible to recover the debt, or in case of absence of joint participants in the long term. Banks have the right to write off funds from the balance of the deceased client or sell the mortgaged real estate as collateral for loans taken by the client until his death. Bank representatives explained that if the loan was secured from the very beginning, whether it be personal or mortgage, the heirs bear no responsibility, and the debt is not treated as the obligation of the deceased client. The bank directly interacts with the insurance company to complete the process, under the condition of providing the heirs with the necessary documents, such as the death certificate.
In response to requests concerning the rights of banks to write off funds from the balance of a deceased client in the case of unsecured personal loan, banking expert Amjad Nasr stated that most banks provide clients the freedom to insure personal loans, and if the loan was insured, the heirs bear no responsibility. Conversely, the bank has the right to write off the remaining debt from the balance of the deceased client or turn to the heir for the remaining debt.
Regarding the question of the bank's right to seize compensation payments upon termination of employment of the deceased client in the case of his debtors, banking expert Sheikh Ali notes that the bank has the right to do this to cover the debts of the client in accordance with the contract, if the loan is not insured in the event of death. Additionally, he recommended that personal loans be insured to avoid issues and to prevent debt remaining upon the occurrence of death.
In particular, banking expert Hisham Abdalkader clarified that there are exceptional humanitarian cases that banks consider individually, particularly Islamic banks. For example, they refuse to seize debts from heirs or compensation payments upon termination of employment in the case of a deceased client, if the heirs are women and minor children without income or elderly parents. However, this decision requires special approval from the higher management of the bank and cannot be standardized. Raskryl noted that the main financial means of banks belong to shareholders and serve to preserve the funds of depositors and shareholders.
