Finance Quick Answers
What happens to credit card debt upon someone’s death? Is credit card debt passed on to heirs when a loved one dies?
Credit card debt is not passed on to heirs when a loved
one dies, but it can still affect you. When someone dies
with debt, credit card companies will first try to
collect from the deceased’s estate. If there is not
enough money in the estate, heirs may have to sell
assets from the estate in order to cover the
liabilities.
So, even though the heirs are not directly
responsible for the debt, they may have to sell assets
they were expecting to keep in order to repay the
deceased’s financial obligations.
If, after assets are sold, there still is not enough
money in the estate to cover the remaining debt, the
company that issued the credit card will write off the
debt. Usually, a death certificate is required as proof.
Family members are not legally liable for any debt.
Be careful, however, if you are a joint account
holder on a credit card. If you have a card in common
with someone, you are responsible for the debt on that
account if the other account holder dies.
Source: American Bar Association. Guide to Wills and
Estates.
www.abanet.org/publiced/practical/books/wills/chapter_7.pdf.
Suzi McGarvey, Extension Associate, University of Missouri Extension
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Last update: Thursday, July 24, 2008
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