The decision of the Constitutional Court, which caused confusion, turned out to be unnecessary

According to the decision of the Constitutional Court adopted on May 23 at the regular session of the Plenum of the Constitutional Court chaired by Farhad Abdullayev, from now on the mortgage debt of the deceased persons will be paid by  their heirs. The decision was made on the basis of the appeal of the Baku Court of Appeal.

According to this decision, in accordance with the Civil Code, the heirs who accepted the inheritance after the death of the debtor are jointly and severally liable to the creditors of the testator in the amount of the share of the inheritance inherited from the date of the opening of the inheritance.

In accordance with Articles 269, 317.1, 319.1 of the Civil Code and the Law "On Mortgage", if the debtor, including the heirs in the event of the death of the principal debtor, does not fulfill the obligation under the principal obligation or does not fulfill in accordance with the established procedure (in case of violation of the principal obligation), the creditor may file a claim for foreclosure on the subject of mortgage.

The decision entered into force from the date of its publication, is final and cannot be canceled, changed, or officially interpreted by anybody or person.

This decision caused heated discussions on social networks. Citizens rightly ask the question - if after the death of the debtor, the loan will have to be paid to the heirs, then why is the person who purchased housing with a mortgage subject to mandatory life insurance? Many also ask - if the deceased's credit debt will be paid by the heirs, but why is the pension of the deceased who has not reached retirement age not paid to the heirs?

The decision of the Constitutional Court, which caused confusion and discontent of citizens, is commented on by an expert on banking and financial issues, lawyer Akram Hasanov, in an interview with ASTNA.

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Question: Do you think the decision of the Constitutional Court on the payment of the deceased's mortgage debt by the heirs is correct? Was there a need for this solution?

Answer: There was no need. Because this issue is clearly spelled out in the law. There was no need for comments. They simply cannot properly explain their decision to the public. In general, the decision is correct. Heir is a person who accepts the inheritance of the deceased. Consequently, he is liable for the obligations of the deceased within the value of the inheritance that he accepted. This is the case all over the world.

Question: This issue is being discussed in society and has caused serious dissatisfaction. In particular, people who have received a mortgage loan rightly ask the question, if after our death the loans will have to be repaid by the heirs, why are we insured in this case? Are we paying for insurance? What is life insurance for then?

Answer: If there is life insurance on the loan, then naturally, the debt must be paid by the insurer. This is not affected in the decision. At least the press service of the Constitutional Court should have clarified this. There is no life insurance for each loan. Including mortgage loans. The decision concerns cases where there is no life insurance.

Question: Will this decision put insurance companies in a difficult position? Because if this happens, trust in insurance companies will decrease, no one will insure their lives. If insurance does not help, then why would a person spend money and insure his life?

Answer: There is little trust in insurance companies without it. Including life insurance. When an insurance event occurs, they evade payment under a thousand different pretexts. But as already mentioned, this decision does not apply to life insurance cases.

Question: One more question has justly come up during the discussions. Some people ask, if the credit debt of the deceased should be paid to the heirs, then why is the pension of the deceased who has not reached retirement age not paid to them?

Answer: Yes, this is a fair remark. Especially in relation to men. The majority of workers and accumulators of large pension capital are men. They mostly live a little. And the pension capital completely or partially disappears. The heirs should get at least part of the capital. But the State Social Protection Fund's own funds are not enough for retirement anyway. Every year he receives subsidies from the state budget. There are simply no funds for the partial transfer of the pension capital of deceased persons to such heirs. So it's a matter of the future.

Question: Is it possible to make sure that the deceased's credit debt is repaid with his pension capital accumulated in the State Social Security Fund?

Answer: This is a reasonable offer. But this cannot be attributed only to those who have a loan. Otherwise, it turns out that the pension capital does not disappear only from those who have a loan. Therefore, the issue needs to be addressed comprehensively. After the Fund has the funds.

Question: How should this issue be regulated in general?

Answer: The credit issue is regulated correctly. But the pension issue is not. Therefore, in the future, the law should provide that at least half of the pension capital should go to the heirs. And the funds for this should be increased at the expense of taxes of the rich. Especially taxes on expensive real estate. Part of these taxes should also be paid not to the state budget, but directly to the State Social Welfare Fund.