Paying credit card debt owed by a deceased loved one

Residents of Illinois might wonder who pays a deceased consumer's credit card debt. When the consumer is a parent, grandparent or spouse, grief is the usually the first concern of family members, but worry about the decedent's financial affairs could come next when the grief subsides and harassment by creditors begins.

Upon anyone's death, all of decedent's assets end up becoming the estate's property, which includes vehicles, savings, investments, real property and cash. At that time, the estate is actually responsible for paying any liabilities, including taxes and debts. If there is a will, the executor of the will or a personal representative is in charge of handling the payment of all debts, which includes credit card debt.

In the event that a consumer dies without leaving a will, the state could appoint an administrator. This administrator will have the same responsibilities as an executor would. Usually, this is a surviving spouse or children of the deceased if there is no surviving spouse. However, nobody can be forced to be the executor if they do not want to be.

If the estate does not have enough funds to pay the credit card debt and none of the surviving family members or any other party was a joint holder of an account or a co-signer, the credit card company might have to write off the debt, according to one legal source. An authorized user on a credit card account usually will not be held liable, but a joint account holder would.

When a loved one passes away, family members may be at a loss as to how to proceed with handling the financial assets and liabilities left behind by their death. An attorney could help by examining all debts and assets, negotiating with creditors and determining which debts must be paid by a spouse or other surviving family members.

Source: The Motley Fool, "What Happens to Credit Card Debt When Someone Dies", Peter Andrew, July 19, 2014

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