6 Thoughts on What happens to the love ones credit card debt when they die?
  1. Reply
    Thomas
    November 29, 2011 at 1:20 pm

    credit card debt is joint marriage property hence it transfers to the spouse. It can be taken from the estate including life insurance policies. It does not transfer to any other relatives, hence if they die with too little in the estate to pay off debts the creditor is stuck with the bad debt to write off.

    As far as the house being in your name – a lot depends on state law and the time frame – if a creditor thinks it was transferred shortly before death to protect it from creditor claims they can make this case in court and the judge may indeed decide that this was the case if it was transferred the immediate expectation of their expiring. What this term of time is depends on state law but I have heard of situations that were less than three years old that were available for satisfying creditors.

    Let us hope to God that you are the only name on the title because if you hold it jointly with them – then it is for certain going to settle debts.

  2. Reply
    Ginger
    November 29, 2011 at 1:41 pm

    Credit card companies do go after estates. If there is no estate funds then the balance will be charged off.

  3. Reply
    saved_astronaut
    November 29, 2011 at 2:21 pm

    this all depends on whether or not it’s a joint debt. if so then the remaining spouse gets stuck w/ it. if not, then the creditors r sol. they may try 2 go after their family who had nothing 2 do w/ incurring the debt, but by law, if the deceased was the only 1 whose name was on it, then the creditors r sol.

  4. Reply
    knitting bear
    November 29, 2011 at 3:12 pm

    As a former probate collector, I can tell you that the estate will be contacted for payment. If there is anything to the estate & the claim is put in timely, the estate needs to pay or at least settle it. Whether it is community property really doesn’t matter. Either person on an account dies & the creditor can go after the estate. I personally collected $ 50,000 out of an estate with 2 other responsible people on the account. If an account holder dies & has an estate, the estate is primarily responsible & the other account holders only after the estate pays out.

    As for the house, if it is solely in your name & was not transferred within the last year, then you should have no issues.

    As for life insurance, that depends on the beneficiary listed. If there is a live beneficiary, then the money passes outside the estate. This does not mean collectors will not ask if there was & would the family be willing to pay out of it.

    To protect yourself & your parents wishes, contact an estate attorney and make sure your bases are all covered before they die. It is a true pain afterwards.

  5. Reply
    Lisa A
    November 29, 2011 at 3:42 pm

    Go after? Well, creditors are legally entitled to the estate. The executor is responsible for seeing that the creditors are paid before any residual amount is distributed to the heirs. The creditor gets the life insurance too, but only if the beneficiary is the estate. Creditors are entitled to 100% of the estate, up until all of the debts are paid off.

    If the estate is entirely used up, and down to $ 0, then the remaining debt passes to any joint account holders, if any. The remaining debt will also pass to the spouse, in community property states. Nobody except the estate, joint account holdres, and spouse in a community property state are responsible for the debt though. If none of those people exist, and the estate value is used up and down to $ 0, then unsecured debt must be written off. An unsecured creditor has no further recourse.

    Secured creditors are different however. The mortgage company can take the house, for example, and sell it to pay off the mortgage debt.

  6. Reply
    Mike
    November 29, 2011 at 4:16 pm

    They take the debt with them when they die. Deadbeats will be collected on when they go to hell!!

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