When a person dies, the estate of the deceased is responsible for paying off that person's credit card. However, that is just one of several financial obligations for which the estate is responsible. If you are an authorized user on the credit card account, or co-account holder with the deceased, you may be responsible for paying off the balance, depending on the terms of the credit card agreement.
Function
The state in which the deceased lived has rules regarding in what order debts must be paid by the estate. Unsecured debts, such as credit cards, usually come after things like funeral costs and outstanding medical bills, but before disbursement of inheritance funds to heirs.
Effects
If the deceased has an estate large enough to satisfy all outstanding financial obligations, that estate must pay the balance of the deceased person's credit card in full. However, if the deceased person's estate is insolvent, depending on the state's rules regarding the order of debt payment for estates, only part of the credit card debt may be paid. Unless there were cosigners on the account, no one is legally responsible for the remainder of the debt.
Considerations
The Credit Card Accountability, Responsibility, and Disclosure act of 2009 affects credit card debts of the deceased as of August 22, 2010. During the process of estate settlement, credit card companies may not allow fees and interest to accrue. Furthermore, a credit card company must issue a statement of the deceased person's balance to the executor of an estate within 30 days of a request from same. The estate then has 30 days from the date of receipt in which to pay the balance in full. As long as the estate complies with that rule, no further interest can be charged.
Warning
Despite the fact that spouses and other relatives of the deceased are under no legal obligation to repay the deceased person's credit card debts, debt collection companies will still try to collect. You may of course pay such debts if you feel morally obligated to do so, which is why debt collectors persist in calling the bereaved. Companies that specialize in this type of debt collection are often trained in dealing with grief, and may be polite and friendly while trying to get you or loved ones to agree to pay off Grandpa's debt. Be aware that they, like other debt collectors, are legally not allowed to harass or threaten you according to the Fair Debt Collection Practices Act.
Prevention/Solution
If you no longer wish to receive such calls, the Privacy Rights Clearinghouse advises that you first provide the debt collector with contact information for the executor. Should the debt collector persist, send a letter requesting cessation of all contact with you via certified mail with return receipt. Debt collectors cannot legally contact you except regarding legal proceedings after they receive such a letter.
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