Death and Credit Card Debt
by admin on 24/11/09 at 9:41 am
If there are two things that people don’t like to talk about, it’s money and death. These are considered “taboo” in our society, but it’s something we all have to deal with. If you pass away and have problems with credit card debt, what happens to it? Do your family have to pay it? Fortunately, the answer is no. Debt on a credit card is unsecured, meaning that part of your estate will go to pay it. If your estate is insufficient to pay the balance,
the debt will be charged off as uncollectible.
However, some debt collection agents will try to persuade your family to pay the bill. They aren’t obligated to do this, and you aren’t obligated to pay it. Failure to pay on a deceased relative’s credit card debt won’t ruin your credit, and anyone who tells you that it will is being dishonest. Be sure that your family knows its rights when it comes to collection agents, and consult a probate attorney if you’re unsure how to handle the situation.
Although unsecured debts aren’t your family’s problem after you pass on, there are some rare circumstances where you would be liable. If your deceased loved one is listed as a user on your credit card account, they will be responsible for charges following your debt. Once those charges are paid, the account is usually closed and the other users are left with less credit and a reduced score.
Also, joint account holders are still liable for balances on those accounts. For example, if a credit card is in a married couple’s names, the surviving spouse is responsible for the balance. That person is still able to use the card until the account is closed, so if debt is a concern, they should quit using the card altogether.
Thinking about death is bad to begin with, and the effects that it will have on a person’s credit card debt are no fun either. However, it’s essential that your loved ones know both their rights and their responsibilities. They should retain all correspondence on the account, any charges that they’ve incurred, and collection notices. The creditor has the burden of proof, and if you need more information on this subject, you can visit the credit card debt resource center or a lawyer consultation will be able to help you.
