The old saying is you can’t take it with you. But, does that apply to credit card debt? Does that debt die with you? Unfortunately, there is no cut and dry answer. A number of factors including the state you reside in, who applied for the card can radically alter the situation.
One scenario however in which someone else could end up with the debt is if you share the account. If a spouse or family member signed the credit card application as a co-signer then that person could be liable for the balance on the card along with the estate. If though, the second cardholder is merely an authorized user – didn’t sign the application, just has charging privileges they are not responsible.
Community property states:
• Alaska
• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin
The above states generally are regarded as assets accumulated during a marriage are considered joint property and in some cases so are debts. If you late spouse has a separate account and has a debt it is possible the debt could pass to the spouse. Please keep in mind that all states have variations so you need to ask more questions.
Here is the simple scenario – if the card was yours alone, with no joint account holders the debt is yours alone too. When you die, your estate is responsible for paying off the balance. If your estate goes through probate your executor will take a look at your assets and debts and be guided by the law to determine in what order the bills should be paid. If your estate or assets don’t cover the bills – the credit card companies will be notified and the debt is written off.
Finally, the executor should notify the credit card companies that the account holder has died. You will need to send in a certified copy of the death certificate. Also, keep a copy for your records as proof of what was sent and when.
