Credit Card Debt After Death - Are My Loved Ones Responsible Even If I Am Dead?

Credit Card Debt After Death - Are My Loved Ones Responsible Even If I Am Dead?

WASHINGTON -- The portion of consumers with payments overdue on credit cards, auto loans and other debt dropped in the first three months of the year to the lowest level since 2007, according to the American Bankers Assn. Overdue bills on credit cards, consumer debt, drop to 2007 level

Death is not a topic anyone wants to discuss openly. Secretly though, we are concerned about it and its impact on our family and loved ones. One such concern relates to credit card debt after death, especially when you have a large outstanding balance. We wonder if the debt will die with us. Or maybe our spouse and children will still be liable for it.

When you are the sole account holder of the credit card, the state probate laws will regard the debt as part of your estate. It will be discharged out of the estate accordingly. In case the estate is not enough to cover the balance due, the card companies will just have to write off the remainder.

So you need not worry over who will be responsible for the outstanding due when you are the only account holder. That is, unless you and your spouse live in a community property state (except Wisconsin).

In community property states, married couples are presumed by law to own all properties and owe all debts equally.

It matters not whether one or both spouses signed the contract. Hence, your spouse has the responsibility to pay the unsettled credit card debt after your death.

Another exception is a state with "necessities law". Once you use a credit card to buy food, medicine, utilities and such necessities, this particular portion of the debt is considered joint regardless of the account designation. So the surviving spouse is responsible for paying it. In practice though, card companies very rarely invoke the "necessities law" to recover the debts owed.

Naturally, when there is a co-signer to your credit card like your spouse or child, they are liable for the debt should you pass away. As a joint account holder of the card, they have agreed to be fully responsible on any card issue as a partner.

While death is a taboo subject, it is a fact of life.

There are many issues your dear ones need to handle after your death. Let us not make credit card debt one of them. Related Credit Card Debt After Death - Are My Loved Ones Responsible Even If I Am Dead? Articles

Question by : who is legally responsible for credit card debt after death? If a person dies and leaves unpaid credit card debt behind will his/her children have to pay the debt? Best answer for who is legally responsible for credit card debt after death?:

Answer by Ryan M
The estate pays the bill. Therefore the children only inherit what is remaining after ALL debts of the estate are satisfied. If the estate is distributed before the debts are paid, then the credit card company can sue to recoup the the money that is LEGALLY owed to them.

Answer by Cold
Did the person leave any assets? Any checking, savings, home, cars, jewelry, furniture, etc? The credit card company will sue the estate for the funds. If the person dies penniless. Not even a TV to her name, then the credit card company has nothing to go after

Answer by Tiffany Northcutt
Yes if there isn't a spouse.

Answer by Use Your Noodle
No Not unless the children are on the credit cards The estate that is left would need to satisfy any outstanding debts left by the deceased.

Answer by StephenWeinstein
If the person leaves behind only debts and nothing else, then the children do not have to pay. However, if the person also leaves behind other things (like bank accounts) that the children do want, then they have to pay the debt to get the other things. If they do not pay, then the credit card company gets the other things and the children do not.

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