Many families today have multiple credit cards with balances on them. When an account holder dies, her debt will have to be dealt with. The credit card debt would not necessarily be passed onto the beneficiaries of the deceased, but it may have to be addressed by the estate.
Account Holder
If you are the only person on the account when you die, the debt will not become the responsibility of one of your beneficiaries. If you opened the credit card with your spouse, the surviving spouse would still be responsible for the debt on the credit card. This is part of the responsibility of signing up for a joint credit card, and the debt would then have to be repaid regardless of the surviving spouse's financial situation.
Estate
When a person dies, her estate is responsible for paying off any of her debts. The executor of the estate is in charge of selling any property that is necessary in order to come up with the necessary cash to repay the debt. The executor has to file tax returns, pay taxes and pay off any other debts that the deceased had. If there is any money left over, it can then be distributed to the beneficiaries of the estate.
Insufficient Estate Value
When a person dies without any substantial assets, and a large amount of credit card debt, the estate may not be able to pay off the debt. If this is the case, the debt will simply be retired and it will not pass on to the heirs of the deceased individual. Debt is not transferable unless someone agrees to repay it for the deceased. Otherwise, the debt will be forgiven by the credit card company.
Proof
When a person dies, his beneficiaries will have to prove to the credit card company that the death is legitimate. To prove that your loved one did not fake death to get out of credit card debt, you will most likely have to provide a copy of a death certificate to the credit card company before it will consider forgiving the debt. At that point, the company should write off the debt as long as there are no other assets in the estate that can be used to repay it.
Collection Calls
In some cases, the surviving spouse of a person with credit card debt will receive collection calls for a certain amount of time. The credit card company may try to collect the balance from the surviving spouse. If there is not enough money in the estate to pay for the credit card bills and the spouse was not a cosigner on the account, there is nothing that the credit card company can legally do to collect the balance.
0 comments:
Post a Comment