In Nevada, creditors can hold a husband and wife equally responsible for debt acquired during a marriage. This includes credit card debt charged to a card held by only one spouse. Spouses in Nevada, as well as other community property states, should be frank with each other about their debt in order to avoid surprises after death.
Handling Debt after Death
After someone dies, the executor or administrator of an estate is responsible for paying creditors out of the estate. The executor or administrator will use the funds in the estate, if any, to pay any bills that the deceased left behind. State law may also require the executor to notify creditors of the death through a newspaper ad.
Joint Vs. Authorized Users
Credit card companies can issue credit cards to married couples in one of two ways. The couple may qualify for the card together as joint account holders. Each spouse is responsible for paying the card's balance. Some couples, on the other hand, choose to have only one spouse listed as the account holder, while the other is an authorized user of the account. An authorized user can charge purchases to the card, but is technically not responsible for paying its balance.
Nevada Is a Community Property State
In most states, a credit card company cannot force an authorized user, even the account holder's spouse, to pay the card's balance out of her personal funds. However, in community property states, such as Nevada, laws are different. Both assets and debts acquired during marriage belong to both spouses. Even if a Nevada spouse is only an authorized user of the card, or not named on the account at all, the credit card company may come after her for the card balance.
Negotiation
If the estate does not have enough money to pay the deceased's credit card balances, she may be able to negotiate a settlement for less than the amount owed. The surviving spouse should also consider whether she herself is "judgment-proof:" if her only income is from Social Security, a pension or other government or retirement funds, it can't be seized or garnished by a creditor who gets a court judgment against her. On the other hand, she should also be aware that debt settlement or not paying a judgment can also severely damage her credit score. For this reason, the surviving spouse should seek help from a lawyer, estate planner or credit counselor for advice in dealing with the debt.
Warning
Unfortunately, there are unscrupulous individuals who take advantage of the distress caused by a death by pretending to be creditors demanding payment. They may call the spouse or another family member of the deceased in attempt to get their banking or credit card information. When taking calls about the debts of the deceased, the person who answers the phone should give the caller the name and contact information for the executor or administrator of the estate or the deceased's lawyer and never divulge any personal information.
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