How Are Credit Card Debt And Death Related After Someone Dies?

 

Credit card debt and death are unfortunately sometimes needed to be considered at the same time. If you or a loved one passes leaving a large amount of credit card debt, the company is still going to want to get paid, but how will that happen? Who is responsible for postmortem debt?

In Case Of A Sole Account

In most cases, if the account was in the deceased’s name only, the debt will be paid by the estate. If there isn’t enough there, the credit card company simply has to write off the debt.

How About A Joint Account?

Naturally, if the debt is in a joint account, or a co-signed account, the other party on the account will become liable for the debt. This also may happen if a state in which the parties involved lived is a “community property state”. In a community property state, both parties are liable for all debts equally.

What Is Credit Life Insurance?

One thing to look into, if you don’t have a lot of life insurance, is credit life insurance. With this type of program, if you die, your credit card bills will be paid in full. This differs from regular life insurance as with regular life, the credit card companies are relying on the insurance beneficiaries to pay the debt. With a credit life program, the debt is paid automatically upon legal proof of your death.

A credit life program is expensive though, most likely because you don’t have to undergo a physical. Again, if you have enough life insurance, this type of program is unnecessary.

The best way to make certain your spouse or loved ones are not saddled with unexpected credit card debt and death at the same time is to make sure you have all your debts paid up, or have some means to have them taken care of after you’re gone.