Who's Responsible for Your Credit Card Debt If You Die?

If you die leaving behind credit card debts, what happens to that debt depends upon several factors. In general, your credit card debts are not inherited by your heirs, but that doesn't necessarily mean they go away altogether. Sharing debts with a spouse or someone else can lead to those debts surviving you and becoming someone else's responsibility.

Card Accounts

Credit card debt becomes part of the deceased's estate unless another person was also an account holder on the card. For example, if your spouse dies with an individual credit card debt of $4,500, that debt becomes part of the estate. If you and your spouse held the account jointly, you retain the debt and are responsible for paying it.

Estates

Individual card debts that become part of an estate must be paid by the estate. For example, if a person dies with $10,000 in credit card debt and another $150,000 in estate assets, the estate assets have to be used to pay the credit card debt before any heirs or beneficiaries can receive the assets as an inheritance. This has to be done in accordance with the probate procedures of the state in which the debtor lived.

Community Property

In some states, your spouse may be responsible for your credit card debt even if the spouse is not included as an account holder on the card. Some states have "community property" laws that dictate that all property owned by either spouse in a marriage is also owned by the other spouse. This includes debts as well. Community property states do not have uniform laws, however, so what applies in one community property state may not apply in others.

Insolvency

If a debtor dies with more debt than assets, and leaves no spouse or joint card holder behind, the credit card company is generally unable to collect the debt. Credit cards are unsecured forms of credit, meaning the card company does not take collateral to secure the debt. When a debtor dies with more debts than assets, unsecured creditors are generally the last to get paid and must usually write off the unpaid debt as a loss.