What Happens to Credit Card Debt When Someone Dies?

Alana Grace

Close-Up Shot of a Person Holding a Credit Card
Photo by Tima Miroshnichenko on Pexels

Credit card debt is a common type of debt that many people have. But what happens to it when someone passes away? Does it disappear or does someone else have to pay it? The answer depends on several factors, such as the type of debt, the state laws, and the relationship between the deceased person and the surviving relatives.

When You May Be Responsible for Someone Else’s Debt

Generally, credit card debt belongs to the person who incurred it. When that person dies, their estate is responsible for paying off any outstanding balances. The estate includes all the assets and liabilities that the person owned at the time of death. The executor of the estate, who is appointed by the will or by the court, has to follow a legal process called probate to settle the estate’s affairs. This includes paying off any debts from the estate’s assets before distributing any remaining assets to the heirs.

However, there are some situations where you may be responsible for someone else’s credit card debt after they die. These include:

  • You co-signed or co-owned a credit card account with the deceased person. This means you agreed to share the responsibility for paying off the debt. You will have to pay off any remaining balance on the account, regardless of who made the charges.
  • You are a surviving spouse in a community property state. This means that any debts incurred by either spouse during the marriage are considered joint debts, even if only one spouse signed for them. You will have to pay off any credit card debt that your spouse left behind, unless you can prove that it was not for the benefit of the marriage.
  • You are an authorized user on a credit card account that belongs to the deceased person. This means you had permission to use the card, but you did not sign for it or agree to pay for it. You are not legally responsible for paying off the debt, unless you made any charges after the death of the primary cardholder. However, you should stop using the card and remove yourself from the account as soon as possible.

Steps to Take When a Credit Cardholder Dies

If you are dealing with a credit card debt after someone’s death, here are some steps you should take:

  • Notify the credit card issuer of the death as soon as possible. You will need to provide a copy of the death certificate and other information about the estate and the executor. The credit card issuer will close the account and stop any interest and fees from accruing.
  • Find out if you are responsible for paying off the debt. Check if you co-signed or co-owned the account, if you are a surviving spouse in a community property state, or if you are an authorized user on the account. If you are not sure, consult a lawyer or a financial advisor.
  • Review the credit card statements and verify the charges. Look for any errors, fraud, or unauthorized charges that may have occurred before or after the death of the cardholder. Dispute any charges that you think are incorrect or illegitimate.
  • Pay off or negotiate the debt if you are responsible for it. If you have enough money in your budget, you can pay off the debt in full or in installments. If you don’t have enough money, you can try to negotiate a lower amount or a payment plan with the credit card issuer. You can also seek help from a nonprofit credit counseling agency or a debt settlement company.
  • Protect your credit score and your rights as a consumer. Check your credit reports regularly and make sure they reflect accurate information about your credit card accounts and payments. If you notice any errors or negative marks, dispute them with the credit bureaus. If you receive any calls or letters from debt collectors, know your rights under the Fair Debt Collection Practices Act (FDCPA). You can ask them to stop contacting you or to validate the debt in writing.

Credit card debt can be stressful and complicated to deal with after someone’s death. But by following these steps and seeking professional help when needed, you can handle it in a responsible and respectful way.

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