Credit Card Debt – After Death

This article is about Credit Card Debt – After Death. One of the common financial concerns for most people and their family members is that what would happen to the credit card debt of any of the family members after they die. There is no one answer to this question. This is because credit card debt for the deceased depends on a number of factors. It may depend on where the person lives, does the card belong to the person alone and so on. Let us explore some of the possibilities when the debt affects the family member of the deceased.

Credit Card Debt - After Death

The case of shared debt

When the credit card holder dies, the most important question arises as to who owns the debt. If there is no name of a second person on the card and the deceased is the sole owner of the card, the debt belongs to him. In such as scenario, the debt ceases along with his death. However, if there is a name of a second person or a co-signer on the card, the debt is transferred to that person. It also depends on the state laws as well.

Entering the probate procedure

A law that deals with a person’s estate is touted as the probate law. When a person passes away, his properties enter the probate process. This means that his assets are first used to clear all the unsettled loans and then it is willed to his beneficiaries. In case of credit card debt for a deceased, creditors often claim a part of his estate to get the outstanding debt. It is up to the state law to decide whether and how much of the estate can be used for debt settlement based on various proof of evidence.

Community Property Estates

If the credit card holder and his spouse stay in a community property estate, it so happens that the spouse may be responsible for paying the debt. The creditor may try to cash in on his home, as a part of the property has entered the probate process. If such a situation arises, it is advisable to get in touch with an estate lawyer who can bail you out of the crisis.

State law matters

In the United States, the individual state laws play a very important role when it comes to credit card debt settlement especially when it concerns a deceased. The norm varies from one state to the other and it is advisable to check with the state where you are residing. Always consult an estate lawyers. you can also go for advice regarding this matter is the Citizens Advice Bureau of your state. They will advice you free of cost.

It is not advisable for the surviving partner/spouse to ignore any document of correspondence or email that come to him/her after the expiry of the credit card holder who already owes money to the creditor. it is important to contact the creditor and explain the situation to avoid confusion at a later stage because debt may pile up month after month. Therefore the situation has to be tackled with determination and expert advice.

Leave a Reply

Your email address will not be published. Required fields are marked *