How to Inherit Credit Card Debt

An important question that spouses and family members should ask after a loved one's death is what happens to the deceased's credit card debt. According to the Federal Trade Commission, credit card debt is typically paid from the deceased party's estate--what assets they left behind at the time of their death. If the debt is more than the amount of the deceased's assets, the credit card company will usually write off the debt. But there are certain instances when credit card debt can be inherited by a spouse or family member.

Instructions

1

Be a co-signor to the account. When a spouse, family member, friend, or business partner is a joint account holder, he is held jointly liable for any credit card debt incurred. However, if you are simply authorized to use the credit card in that you have charging privileges but did not fill out or sign the credit card application, generally, you are not responsible for the debt.

2

Possess a credit card account in your name in which the deceased party was given charging privileges. Technically speaking, if you made the deceased an authorized user on your account when you applied for the credit card, you are solely liable for the charges. You are still solely liable for any charges someone--a spouse, family member or friend--put on your credit card, even if they die.

3

Be married to the deceased party and reside in a community property state. Laws in these states may differ from those in other states in that assets and debts accrued during a marriage are considered a part of the community property. Even if a deceased spouse held a card in her name only and you only had charging privileges, you may inherit the debt, depending on the state's laws. Community property states include: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Because community property state laws vary, always consult with an attorney if you live in one of these states and your spouse dies with credit card debt.

4

Consult your financial adviser or attorney if you're unclear about your liability when it comes to credit card debt after a loved one dies--and be careful when handling calls from alleged creditors, warns the Federal Trade Commission. Con artists often scour the obituaries and cold-call deceased's family members, alleging credit card debt that doesn't exist. Always be careful about what personal information you give the deceased's creditors over the telephone until you verify that the debt is legitimate.