Inheriting Credit Card Debt

Inheriting credit card debt when a spouse dies is a stressful and legitimate concern of partners at any
age.  When a person dies, his or her credit card debt does not
automatically disappear.  Whether the credit card company can
recover the debt depends on three factors, whether or not the
account had a co-signor, the amount of money and property in the
deceased spouse’s estate and your state’s
law.   

First, if the card belonged to the deceased spouse alone and the
living spouse was not a co-signor or joint account holder on the
account, then the debt belongs to the deceased spouse alone. 
At death, the deceased spouse’s estate is responsible for paying
off the balance of the debt.  When the estate goes through
probate, the distribution of property after a person’s death, the
estate representative will look at the assets and debts, and
according to the law, will determine the order in which to pay off
the outstanding debt.  If there is remaining assets after all
debts are paid, the property will be distributed according to the
deceased’s will or by state law if no will was in
place.   There are some states, California being one,
that hold that a spouse can be liable on the credit card.  If
the surviving spouse  were to received benefits from the use
of the card, then they can be held liable for it. Otherwise, if the

credit card debt amounts to more than the deceased’s total
estate and there was no co-signor or joint card holder, the credit
card company must write off the debt.  The company cannot
legally come after a living spouse to force payment on the account
if he or she was not a joint card holder. 

In 2009, the Credit Card Act was adopted, putting a stop to
credit card companies from accumulating additional fees once
notified the card holder had died.  Furthermore, the Fair
Debt Collection Practices Act (“FDCPA”) protects the
living spouse from being
harassed by collectors who can often make the living spouse
feel an obligation to pay when the reality is he or she has no
legal obligation.    

So, when opening a credit card account alone, you are
responsible to pay back the debt and you sign a contract requiring
you to do so.  Upon death, it is not your spouse or family
that is required to make the payment on your behalf, but your
estate.  It is important to be aware of your rights as there
is no guarantee that the credit card companies and/or collection
agencies won’t try to receive payment from you on your deceased
spouse’s behalf. 

If you are having problems with debt, contact SmithMarco P.C.
for a free case review.