How Can I Eliminate Inherited Credit Card Debt?
Consumer law pertaining to credit card debt that's incurred by deceased relatives varies from state to state. Particular circumstances also affect responsibility: when the debt occurred, the relationship between you and the deceased (spousal or parental), the status of assets in the deceased's estate and other factors. In many cases, you can only determine that you have a probable responsibility or that you probably do not. In only some circumstances can you determine that you clearly do or do not have a legal responsibility for the debt.
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Instructions
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Determine the particulars of the debt. You may have an obligation to pay your deceased spouse's credit card debt if one or more of the following conditions applies: you live in a community property state, the deceased incurred these debts during your marriage or you held the card jointly. In all such cases, particularly if the deceased had substantial credit card debt, you should consult a consumer law attorney.
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Determine the details of your relation to the credit card, whether as a joint holder or authorized user. You very probably have no obligation to pay the debt if your deceased spouse left debt on a credit card where you were only an authorized user rather than a joint card holder. However, according to Scott Crawford, CEO of debt management service DebtGoal, in such cases many credit card companies will still try to collect.
If your spouse dies leaving unpaid balances on credit cards, you probably do not have an obligation to pay them if you do not live in a community property state, or the deceased incurred these debts prior to your marriage.
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Do not pay the issuer if a parent dies leaving credit card debt. Your parent's estate will normally pay the debt. If the estate has insufficient assets, the executor will notify the credit card issuer of the estate's insolvency.
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Determine the timeliness of the card issuer's claims. If you have a deceased relative with credit card debt and an estate large enough to pay off those debts, the executor has an obligation to pay them before disbursing assets to beneficiaries, which could preclude your receiving an inheritance. However, the Credit Card Act of 2009 stipulates that credit card issuers must make these claims promptly.
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Tips & Warnings
If a card issuer makes a claim on you for a deceased spouse's credit card debt you feel you have no obligation to pay, write the issuer promptly and notify it that you have no responsibility for the debt. You do not have to detail your reasons.
Under the terms of the Credit Card Act of 2009, card issuers may not add further interest charges or other fees to the account of a deceased unless the estate fails to settle that debt (or to notify the issuer of the estate's insolvency) within 30 days of reception of the issuer's claim. If you are the executor of a parent's estate, be sure to pay these debts within 30 days of notification. Otherwise, the estate becomes responsible for additional interest and penalty charges.
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