The death of the borrower is not reason for sale of the collateral

After the borrower had died, the bank closed the credit account and utilized the gold, which had been deposited, to secure the loan in the amount of EUR 68,000.

The estate was sued and it was demanded to establish the upright existence of the credit agreement and the security agreement, obliging the defendant for replacement and for keeping the gold.

Both, the First and Second Court Instances granted the claim, the Supreme Court confirmed these decisions. A material deterioration of the financial situation, which would have represented an important reason for the premature termination of the loan agreement, was denied in this respect, since neither the death nor the value variations of the gold jeopardized the fulfillment of the liability.

Source: www.ogh.gv.at/entscheidungen/entscheidungen-ogh/tod-des-kreditnehmers-noch-kein-grund-zur-verwertung-der-sicherheiten/