Credit Card Debt – ‘Til Death Do Us Part
There are a lot of things you can’t take with you when you die, and in the case of credit card debt, it can be a good thing. However, this can change depending on where you live and whose names the credit card is under. Of course, the simplest scenario is that the credit card was on your name alone, with no joint account holders. In this case, any debt owed on the card, after death, would belong to only you and no one would inherit it. Your estate is responsible for paying off any balances on the credit cards. If your estate goes through probate, the administrator of the will must look at your assets and your debts and according to what the law is in your state, determine in what order debts will be paid. If there aren’t enough assets left behind to cover the bills, the credit card companies would lose out. They would be notified by the administrator of the will regarding the situation and that would be it. Family members of the deceased would not be responsible to pay anything.
The only situation when credit card companies can still collect debt after someone dies is if there were other joint account holders on the card. In that case, the joint account holder (or co-signer) is liable for the balance on the credit card. However, keep in mind that if the other person is just an authorized user, which means they did not sign the application nor are they responsible for paying the bills, then they are also not liable for the balance left behind. They are only responsible if they signed the application as a joint account holder or co-signer.
If you start receiving phone calls from collection agencies after a loved one has passed away, don’t get stressed out and immediately assume that you are liable for the balance left behind, just because the credit card company is telling you so. You need to make certain if the balance is legitimate, if it is within the statute of limitations, and most importantly, whether you had signed the credit card application as a joint account holder. If you were just an authorized user with charging privileges, you cannot be held responsible for balance remaining on the credit card.
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