If a person dies and owe money on credit card, what happens?

[cindiw2]

Jurisdiction

Florida

So...if a person has a credit card in his name and he passes away, can the credit company demand payment from spouse?

 

[adjusterjack]

His estate has to pay it, to the extent that the estate has assets, either cash, or property that can be sold if necessary.

Creditors get dibs on the money after funeral expenses and legal costs, and before the heirs get anything.

It's not a choice. The creditors file claims with the probate court and the court monitors the probate estate to make sure everything is done according to law.

That's overly simplified, of course.

How much is the debt?

 

[welkin]

So...if a person has a credit card in his name and he passes away, can the credit company demand payment from spouse?

Credit Card debt is an unsecured debt. Unless the spouse is a joint account holder, they are not responsible for any of the debt unless they live in a community property state which Florida is not. The estate of the deceased becomes responsible.

With that being said, banks and CC companies would rather cut a deal on the payoff amount rather than have to litigate against the estate to get paid. Sometimes the cost of litigation outweighs the amount they would collect. So, the executor/trix can offer (depending on the amount owed) some reduced amount to close the account.

I was the executor of my mother's estate, and I negotiated a $0.65 on the dollar settlement with her CC company. Just be sure you get the proper paperwork clearly stating what the settlement is before you send them any money and that payment of that amount closes the account.