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What Happens to Debts When a Person Dies or Divorces in Ecuador?

Published on August 07, 2023

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Debt responsibilities must be considered when assuming assets under Ecuadorian inheritance laws, or when declaring marriage in the country.

The passing of a loved one is a challenging time for any family, but in Ecuador, it brings not only the grief of loss but also the responsibility to address the deceased’s assets and debts. Even without a will, Ecuadorian law dictates that children, parents, and siblings are the rightful heirs to both the assets and liabilities left behind.

The concept of “intestate succession” is well-established in Ecuador, which means that the deceased’s assets and liabilities are automatically transferred to their heirs, regardless of whether they left a will or not. Consequently, if a person passes away, their heirs become responsible for settling any outstanding debts they had incurred.

César Coronel Garcés, manager of the legal firm Defensa Deudores Ec., explains that the Civil Code dictates that children are the first heirs in line. In the absence of children, parents and then siblings become the rightful successors to the estate, both its assets and debts.

While the transfer of debts is applicable to all types of loans and credits, there are some exceptions. Credit life insurance is mandatory when acquiring a mortgage loan or seeking an unsecured loan from the Bank of the Social Security Institute (Biess). For other types of loans, credit insurance is optional, but experts recommend taking it as a preventive measure to protect the heirs from undue financial burden.

In the unfortunate event of inheriting debts, heirs in Ecuador have several options. They can accept the inheritance, taking possession of the assets, and, in turn, becoming responsible for the debts. Alternatively, they can choose to repudiate the inheritance, avoiding the debts altogether, especially if the liabilities exceed the assets.

Marriage debt matters as well

However, debt-related challenges aren’t limited to deaths alone. When a married couple in Ecuador gets a divorce, the division of assets and liabilities can become complicated. Under Ecuadorian law, a conjugal partnership is established upon marriage, meaning that both spouses acquire shared ownership of assets and debts.

Coronel explains that even if only one spouse signed a contract for a debt, both individuals are considered debtors in the eyes of creditors, as they are part of the conjugal partnership. Thus, after divorce, both individuals continue to share the debt obligations equally.

To mitigate potential problems after divorce, it is advisable for both parties to reach agreements and create an inventory of their debt balances, determining who will assume responsibility for each debt. Additionally, the clauses in the contracts with the debts should be reviewed, particularly the “notices” section, which outlines procedures for notifying creditors of significant events, such as divorce.

A more proactive measure to avoid such complications before they arise is opting for the dissolution of the conjugal partnership, a process that does not entail divorce but instead separates the assets and debts acquired by each individual. If mutual agreement is not reached, one party can file a lawsuit seeking the dissolution before a judge.

For couples who have not yet tied the knot, a “marriage capitulation” can be considered before marriage. This legal declaration before a notary ensures that a conjugal partnership will not be established during the marriage, thereby keeping assets and debts separate.

Ecuadorian inheritance laws and debt responsibilities can pose significant challenges for heirs and couples alike. Understanding the legal implications and taking appropriate measures, such as credit life insurance or the dissolution of a conjugal partnership, can help safeguard financial stability and ease the burden during difficult times.


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