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If a person dies and owe money on credit card, what happens?
- Thread Starter cindiw2
- Start date
adjusterjack
Super Moderator
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?
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?
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.
Note that there is a specific period of time for creditors to file a claim against the estate. In Florida that must be filed within 4 months from date of 1st publication of the legal death notice.
When an estate is probated — the process through which assets such as cash, investments and real estate are sold — the process prioritizes creditors. Though unlike secured debt — like a mortgage that's secured by property or a car that's secured by a vehicle — credit card debt is unsecured. For that reason, it's likely a credit card company will be at the back of the line when it comes to repayment of debts from the estate.
adjusterjack
Super Moderator
Good point.
Tax Counsel
Well-Known Member
The credit card lender, like all other creditors, will file a proof of claim (or whatever it is called in the state conducting the probate) outlining its claim to estate assets. All the valid debts of the deceased must be paid before estate beneficiaries get anything.
The credit card company can come after the spouse if (1) the credit card account was a joint account, (2) the spouse guaranteed the account, or (3) the law of the state makes the spouse liable for some or all of the debt. As an example of (3) the creditor may go after the suriving spouse in a community property state for her community share of the debt (often that's half of the debt).
True, but the personal representative of the estate also has a duty to notify all creditor of which he or she is aware. Failure to do that may make the personal representative personally liable for the debt. For that reason, a well advised personal representative won't try to hide the death from the creditor and hope the creditor never sees the public notice.
army judge
Super Moderator
Anonymous denizens on the internet are unable to answer your question for other entities.
Here's a thought, why NOT ask the horse's mouth,
rather than his massive booty?
zddoodah
Well-Known Member
As phrased, the only possible answer to this question is yes, but it's not a very useful question.
The debtor's estate is liable for the debt. Whether the debtor's spouse is liable depends on facts you didn't include. The spouse isn't liable solely by virtue of being married to the debtor.
Assuming this is a real situation, please answer the following questions:
1. Who are you?
2. When did the debtor die?
3. How much money is owed?
4. Is there a probate proceeding ongoing or will one be filed?
5. If there is an ongoing probate, when was it filed, and has someone (who?) been appointed to serve as executor/personal representative?
6. Has the creditor been notified that the debtor died?
7. Is the surviving spouse a co-holder of the account, or did the surviving spouse ever use the credit card?
cbg
Super Moderator
Army Judge, that's utterly inappropriate. What are we here for, if not to answer questions?
adjusterjack
Super Moderator
Agree. Judge, please dial it back a notch.
ok, thanks. Let's say I am the spouse. And we both share a credit card. One is the authorized user. Therefore, I assume that if one of us dies the other still owes the money. For this question, there will be no probate. So that answers that.
Now--let's say in the case that only one spouse holds the credit card with no authorized user. So I can only guess, if there is no probate because the estate is in both names then the surviving spouse would have to pay the debt even though she did not hold that card. (Am I right?)
I'm assuming it would be the same thing if both spouses held different and separate cards, in other words, the surviving spouse would be liable for the debt the other one had on the card. (right?)
P.S. To Mr. Army Judge -- Please, sir,--Mr. Army Judge -- try -- don't throw me out of court...
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Thanks, I guess he's giving a little ride
and I don't really want to be on his bad side.
adjusterjack
Super Moderator
This site is not here to help people stiff creditors nor do we appreciate hypotheticals that keep changing the parameters.
If you have credit card debt, pay it before you die so you don't leave your spouse with a financial mess to clean up.
How about another "let's say"?
Let's say you have a large credit card debt and your surviving spouse has absolutely no obligation to pay it. Full stop.
Yet, a few days after you die, a process server comes to the door and delivers a lawsuit with your estate AND your spouse named as defendants.
What does your spouse do?
1 - Ignore it. Then it goes to default judgment against both and the creditor attaches assets.
2 - Pay it. That wipes out whatever discretionary funds exist.
3 - Hire a lawyer and fight it. $400 per hour with a retainer of $5000. Attorney fees can run into many thousands of dollars and a win doesn't get them back.
If you have credit card debt, pay it before you die so you don't leave your spouse with a financial mess to clean up.
How about another "let's say"?
Let's say you have a large credit card debt and your surviving spouse has absolutely no obligation to pay it. Full stop.
Yet, a few days after you die, a process server comes to the door and delivers a lawsuit with your estate AND your spouse named as defendants.
What does your spouse do?
1 - Ignore it. Then it goes to default judgment against both and the creditor attaches assets.
2 - Pay it. That wipes out whatever discretionary funds exist.
3 - Hire a lawyer and fight it. $400 per hour with a retainer of $5000. Attorney fees can run into many thousands of dollars and a win doesn't get them back.
OK. no more. there are nice people in this world and there are those not so nice.
The attorneys and laypersons that volunteer their time and knowledge on this site are all nice. None of us get paid to be here...We all do it to help guide people having real life legal issues. We do not volunteer to deal with hypothetical curiosity as that is a waste of our time. Read the terms of this site.
BTW: You stated that you have had past issues with ArmyJudge and yet you just joined this past Friday, and this is the only thread you have.
Which likely means you were banned and made yourself a new username.
Good to know.
I couldn't remember my former user name. I am not sure if I was banned. Maybe I was, I can't remember. My question remains though. And thank you to some for answers. If I was banned before because I didn't understand something, so be it.
It was just a question and I was hoping to get some answers, which I did. As with judges, different strokes or decisions for different folks, I guess. Sorry about that. I thought it was a simple enough question but I guess not. OK, have a nice day.Thank you. I think I'm getting too old for this. Thanks again.Your other username was easy enough for me to fine.
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