Do You Have to Pay Off Credit Cards of Deceased?
Whether you have to pay off credit card debts of someone that is deceased is a question that has no pat answer. It largely depends on where you live and who applied for the credit card. One standard piece of information to remember is that in most cases, debt can not be inherited. If the card was yours with no joint holders, the debt is also yours alone.
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Responsibility Of The Estate
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When you die, your estate goes through probate. It will be administered by an executor if you had a will, or by an appointed administrator if you died without a will. That person will gather your assets and your bills together. He will then decide in which order debts are to be paid. If the estate is not large enough to pay all the bills, some creditors will be left out.
Assets Not Included in The Estate
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Items such as IRAs, 401ks, brokerage accounts and life insurance usually pass to the designated beneficiary outside the estate. These items cannot be used to satisfy the estates' debt. That gives a good reason for keeping your designated beneficiary up to date.
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Exception to Inherited Debt
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If your spouse or someone else signed the credit application, then that person will be responsible for the debt. It is to be noted that the person must have actually signed the credit application and not just be an authorized user of the account.
Community Property States
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In some community property states, assets accumulated during a marriage are equally owned, and in some cases, so is the debt. In some cases if a spouse has a separate credit account and runs up charges before debt, then that debt may become payable by the surviving member. This is not written in stone, and community property states have different laws, so before paying any debts, you would do well to consult a lawyer.
Family Home
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Most states have laws that allow the house to pass to the surviving spouse and protect it from seizure by the estate's creditors. However, if the house passes to children or other beneficiaries, this may not be the case. Again, consult a lawyer.
Solution
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If a loved one dies, the spouse is usually not liable for the debts. If you get collection calls, promise nothing and refer them to the executor or administrator.
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