In a nutshell: Any debts owed, including credit card debt, must be paid off by the estate of the deceased. Relatives typically aren’t responsible for using their own money to pay off credit card debt after death. However, in certain situations, such as when they shared an account with the deceased or are the surviving spouse in a state where community property exists, they might be liable. Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect.
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Losing a loved one is never easy, and dealing with their financial affairs can add to the emotional burden. One of the questions that often arises is who is responsible for their credit card debt. The answer, unfortunately, isn’t always straightforward.
Usually, the estate of the deceased is in charge of paying off their debts, including any credit card balances. This implies that the estate’s assets will be used by the will’s executor to pay off outstanding debts. Nevertheless, creditors might not have much luck if there isn’t enough money to pay off all of the debts.
Here’s a breakdown of who might be responsible for credit card debt after someone dies:
- The deceased person’s estate: This is the most common scenario. The executor of the will will use the estate’s assets to pay off debts, including credit card balances.
- Co-signer on the account: If the deceased person had a co-signer on their credit card account, that person will be responsible for the debt.
- Joint account holder: If the deceased person had a joint credit card account, the surviving account holder will be responsible for the debt.
- Surviving spouse in a community property state: In some states, community property laws require the surviving spouse to pay off the deceased spouse’s debts, including credit card balances.
- Executor or administrator who mishandled the estate: If the executor or administrator of the estate didn’t follow proper procedures, they may be personally liable for the deceased person’s debts.
Here are some additional things to keep in mind:
- Authorized users are not typically responsible for credit card debt after a relative’s death. This is because authorized users were only allowed to use the card, not to agree to be responsible for paying off the balance.
- Credit card companies may contact the deceased person’s family regarding any debt left behind. However, they must follow the rules established by the federal Fair Debt Collection Practices Act (FDCPA).
- You can ask the debt collector to stop contacting you, regardless of whether you’re legally responsible for the debt or not.
- If you’re responsible for the debt, you may want to talk to a lawyer before making any payments.
The following resources can provide you with additional information regarding credit card debt after death:
- Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov/ask-cfpb/does-a-persons-debt-go-away-when-they-die-en-1463/
- Credit Karma: https://www.creditkarma.com/credit-cards/i/credit-card-debt-after-death
- Intuit: https://www.intuit.com/personal-finance/credit/credit-card-debt-after-death/
It’s hard enough to deal with a loved one’s death without having to worry about their debts. It is best to speak with a lawyer or financial advisor if you are unclear about who is accountable for their credit card debt.
After a family member dies, relatives are sometimes left to deal with their credit card debt.
When a deceased person leaves behind debt, like credit card bills, their estate pays off the balances. Creditors may not be able to collect if there is not enough money to pay them and no one else co-signed the debt.
This is due to the fact that, according to the Federal Trade Commission, surviving family members of a deceased person are normally not required to use their own funds to settle credit card debt after death. But there could be some exceptions, like for joint accounts and certain laws that vary by state. Here’s what to know.
What happens to credit card debt after death?
An estate is everything that a person possesses at the time of death, including bank accounts, personal belongings, and outstanding debts. The executor of the estate will go through a procedure known as probate if the deceased had debt. The executor is the person named in the deceased person’s will to handle their affairs.
During the probate process, bills are paid off using the estate’s assets. Some assets might not be included in this process due to specific provisions, meaning they won’t be used to pay creditors because they don’t transfer to the estate.
When someone passes away, a relative is usually required to inform all creditors, including credit card companies. According to the CARD Act of 2009, the card issuer cannot impose any additional fees or penalties while the estate is being settled, and it must promptly notify the estate executor if any balance is due.
However, the card issuer might not have much luck if there isn’t enough money in the estate to pay off credit card balances. Unlike some debts, such as a mortgage or a car loan, most credit card debt isn’t secured. In these cases, the card issuer may have to write off that debt as a loss.
WHO IS RESPONSIBLE FOR A DECEASED PERSON’S DEBT?
FAQ
Will credit card companies forgive debt after death?
Am I responsible for my husband’s credit card debt when he dies?
Can debt collectors go after family of deceased?
What debts are not forgiven at death?
Who is responsible for credit card debt after you die?
In most situations, no one else is responsible for your credit card debt after you die. There are two exceptions. A joint account holder will usually be responsible for credit card debt, even if the charges were yours. And your surviving spouse may be responsible if you live in a community property state.
Who is liable for a deceased person’s credit card debt?
However, there are certain circumstances where someone else is liable for the deceased’s credit card debt and other financial obligations. Joint account holder. Joint account holders are equally responsible for the debt incurred, even if they never used the credit card or benefited from the loan proceeds. Co-signer on the account.
Can relatives pay off credit card debt after death?
Relatives typically aren’t responsible for using their own money to pay off credit card debt after death. But they may be on the hook in some cases, like if they had a joint account with the deceased person or are a surviving spouse in a community-property state.
What if a credit card holder dies?
Credit card companies usually require that you send them a copy of the cardholder’s death certificate to close the account. This is also when you can discuss paying off the balances on those credit cards. If you’re liable for the debt, you could possibly negotiate credit card debt with the card issuer.