DO YOU HAVE THE RIGHT TO COLLECT DEBT ON BEHALF OF A DECEASED RELATIVE?

Table of Contents

1. What is the right to collect debt?

2. Is there a right to collect debt on behalf of a deceased relative?

3. The borrower’s obligation to repay the debt

4. What should a borrower do if he/she fails to repay the debt?

1. What is the right to collect debt?

The right to collect debt is a property right. The right to collect debt is a property right used to secure the performance of civil obligations.

Pursuant to Article 105 of the 2015 Civil Code:

“Article 105. Property

1. Property comprises objects, money, valuable papers and property rights.

2. Property comprises immovable property and movable property. Immovable property and movable property may be existing property and property to be formed in the future.”

Based on the above provisions, the right to claim debt is a civil right of the subject recognized and protected by law, helping the entitled party to request the obligated party to perform a property obligation towards him/her.

2. Is there a right to claim debt on behalf of a deceased relative?

According to the provisions of Article 194 of the 2015 Civil Code, the owner’s right to dispose of property is stipulated as follows: “Owners shall have the right to sell, exchange, give, loan, bequeath, renounce the right to own, to consume or to destroy, or implement other forms of disposal in conformity with the law on property.”

Thus, according to the above provisions, the right to claim debt is a property right and the lender has the right to inherit his/her right to claim debt. According to the law, when a person dies, their estate is inherited according to the will or divided according to the law. In the case of debt collection on behalf of a deceased relative, it is allowed to request the borrower to pay money according to the provisions of law.

3. Obligation to repay debt of the borrower

Pursuant to Article 466 of the 2015 Civil Code, the obligations of the borrower are stipulated as follows:

“Article 466. Obligations of borrowers to repay loans

1. Where the property lent is a sum of money, the borrower must repay [the lender] the loan in full when due. If the property is an object, the borrower must deliver [to the lender] an object of the same type, quantity and quality, unless otherwise agreed.

2. A borrower who is unable to deliver an object may, with the consent of the lender, repay the value of

the borrowed object in cash as at the time and place of delivery

3. The place for repayment of a loan shall be the place of residence or head office of the lender, unless otherwise agreed.

4. If a borrower fails to repay [all or any instalment of] an interest-free loan, in whole or in part when payment falls due, the lender shall have the right to request [the borrower] pay interest at the interest rate provided in article 468.2 of this Code on the overdue amount, unless otherwise agreed or provided by law.

5. If a borrower fails to repay, in whole or in part a loan with interest, the borrower must pay interest in accordance with the following provisions:

(a) [The borrower must pay] interest on the principal which is due and unpaid at the interest rate agreed in the contract for the term of loan; in the case of late payment, [the borrower] must also pay interest at the interest rate provided in article 468.2 of this Code;

(b) [The borrower must pay] interest on the principal which is due and unpaid [at the interest rate] equal to one hundred and fifty (150) per cent of loan interest stated in the contract for the period of the delay, unless otherwise agreed.

4. What should a borrower do if he does not repay the loan?

According to Article 463 of the 2015 Civil Code, the provisions on the Property Loan Contract are as follows: “Contract for the loan of property means an agreement between parties whereby a lender delivers property to a borrower. When the loan falls due, the borrower must repay the lender property of the same type in accordance with the correct quantity and quality, and must pay interest if so agreed or so provided by law.”

Thus, the person borrowing the property must have the obligation to repay the debt when due according to the agreement. If the borrower intentionally fails to repay, the co-heirs can file a lawsuit requesting the court to resolve the matter and force the borrower to pay money to the family of the deceased.