system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Where does the debt a person had go when he/she dies?

When a person dies, where does their debt go? Is it transferred or does the bank just forgive the debt? If the debt just goes away, why doesn't everyone just spend as much as they want, as it will be gone when they die?
gpt
Debt is not transferred to heirs.

However, if the loan was "secured" like a mortgage tied to some property, then the creditor can take the property and keep it or sell it (depending on the loan agreement) in place of getting their debt paid.

If the loan was unsecured, then when the executor of the will takes all the property in the deceased estate and liquidates it (sells for money to then distribute) the creditors get paid out before the beneficiaries. If the estate has property that is worth $10,000 but the deceased owes $15,000 then the debtors get the $10,000 split between them and the beneficiaries inherit nothing.