Do You Have to Pay Credit Card Debt of a Deceased Parent?
In the midst of your grief over losing a parent, you may find yourself fielding telephone calls and letters from creditors requesting payment. Although your parent's credit card provider still possesses a right to collect the outstanding balance on the card, the company may not have the right to collect it from you or any other surviving family member.
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Payment Responsibility
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When you sign an application for a new credit card, you accept full responsibility for repaying the charges. The same rule applies to your parents. Should a cardholder die, the debt he incurs does not pass to his loved ones in the same manner that his assets do.
An exception to this rule applies if you applied for a joint credit card account with the deceased. If the account was jointly owned, even if only in name, you shoulder the full responsibility for paying it off.
Estate Probate
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Whenever an individual dies, the local probate court assumes responsibility for paying off her outstanding debts and distributing her assets. Should a credit card company call you about the outstanding debt on the account, referring the company to the probate court allows it to file a prompt claim for payment.
The probate court, along with the executor of your deceased parent's estate, pays off as much debt as possible with your loved one's assets. If your parent died insolvent, owing more debts than he possessed assets with which to pay them off, the credit card company may not receive payment at all.
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Illegal Collection
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A credit card company that does not receive payment will likely sell the delinquent account to a collection agency. Unfortunately, it is not uncommon for debt collectors to contact family members claiming that they must bear the burden of paying off their loved one's debts.
The Fair Debt Collection Practices Act (FDCPA) makes it illegal for any collection agency to threaten to take any action it does not have the right to take. This includes threatening to report the unpaid debt on your credit record or threatening to sue you. The FDCPA allows all individuals to force collection agencies to cease all contact with them by putting the demand in writing and mailing it to the collection agency.
Authorized Users
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Authorized users on credit card accounts are similar to joint account holders in that they have the legal right to use the credit card to make purchases. Authorized users, however, are not responsible for repaying the debts they incur. Thus, even if you used your deceased parent's credit card in the past, your parent---not you---was responsible for paying the debt.
Keep in mind, however, that credit card accounts often appear on the credit reports of both the primary account holder and the authorized user. Although you aren't legally responsible for making the payments, making minimum payments on the card prevents missed payment notations from damaging your credit score.
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