8 – List of debts and liabilities

My list of properties is ready. It mentions all assets movable and immovable. It also mentions my shares in assets that I hold jointly with others.

Now I must also make another list showing my debts and liabilities. I will include in this list:

  1. Loans and advances taken from banks and financial institutions:
    my customer ID, account number, name of bank and branch, instalment periods, amount due.
    I must also make a separate file for documents about each loan, especially the loan agreement. If I do not have copies of documents, I must get them from the bank.
  2. Similar details and documents for loans and advances for which I am guarantor. My heirs are liable after me for loans which I have guaranteed.
  3. Mortgages, pledges, hypothecation of my property or insurance policies given as security of loans or advances:
    Description of property or policies, details of loan, purpose of the loan, and whether the security is given as borrower or guarantor. I must keep a file containing papers about the security.
  4. Amounts I owe to other persons, for example, personal loans taken from private parties:
    Details of the lender or creditor, loan, interest rate.
    If I maintain books of accounts for my business, I need not mention my business debts in this list.
  5. Details of litigation that I filed or are filed against me.
    Case number, name of court, names of parties, brief statement of claim, brief statement of defence, prayer made.
  6. Potential claims that I foresee.
  7. Details relating income tax or other taxes:
    PAN number, name and address of tax adviser.
    I will keep a file of returns filed and assessment orders for past five years.
  8. Anything else that I think my heirs will have to bear or pay after me.

I make this list for many reasons:

  1. After me, everything I owe to others can be paid from my properties.
  2. After me, my relatives should know about these, so that any claim will not take them by surprise.
  3. After me, my heirs can decide to pay off or settle so that the encumbrance on the estate they inherit can be removed.
  4. If my asset is mortgaged or offered as security, the claim that it secures will be paid from that asset. Therefore if I give by will my mortgaged house to my daughter, she will know that the house is subject to mortgage, and the bank can recover its loan by selling it. I will also be conscious about this if I decide to give it to her by will.

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– Nilima Bhadbhade

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