Credit Card Debt and Death

Learn what happens to credit card debt when a person dies.

By , J.D., California Western School of Law
Updated by Amy Loftsgordon, Attorney · University of Denver Sturm College of Law

When a person dies, their credit card debt isn't automatically wiped out. Whether a credit card company can recover its debt depends on state law, the amount of property in the decedent's estate, and if anyone else cosigned the obligation.

The Decedent's Outstanding Debts May Be Satisfied From Their Estate

Generally, a deceased person's estate is responsible for paying the decedent's outstanding debts. Depending on state law, when a person passes away, creditors have a certain amount of time to file a claim against the assets in their estate. If the decedent's estate doesn't have sufficient assets to pay the debt, the credit card company is usually out of luck.

Typically, creditors are paid from assets that pass to the decedent's estate and are administered through probate. This includes property devised or bequeathed in a will or not otherwise transferred by any other instrument. So, creditors can't go after property that goes directly to someone else upon death, such as life insurance proceeds to a designated beneficiary, joint accounts with rights of survivorship, or money in transfer or payable-on-death accounts.

If the decedent had a living trust, whether a creditor can go after trust property depends on state law and the terms of the trust. Because each state is different, consider talking to a local attorney about how you can protect your assets from creditors upon death.

Are the Decedent's Family, Friends, or Heirs Liable for the Debts?

When a person obtains a credit card, they are responsible to pay that debt back because of a contractual obligation. A deceased person's family, friends, or heirs do not inherit the deceased person's debts. As a result, they're typically not liable or obligated to pay the debt back with their personal assets unless they were jointly liable on the obligation to begin with.

However, in community property states, both spouses may be held jointly liable for debts incurred by either spouse during the marriage. These are called "community debts." So, in a community property state, you might be liable for the debts of your deceased spouse even if your spouse was the only one on the contract.

Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states. Alaska allows married couples to opt into a community property system, and spouses in Florida, Kentucky, Tennessee, and South Dakota have the option of identifying property held in trust as community property.

Cosigners Are Still Liable on Outstanding Credit Card Debts

If you cosigned or were otherwise jointly liable with the decedent on a credit card, you're still on the hook for that debt. The death of your cosigner doesn't eliminate your obligation to pay the debt. As a result, if the decedent's estate didn't have enough assets to pay off the debt, the credit card company can still pursue you to collect it.

Who Are Debt Collectors Allowed to Contact After a Person Dies?

Credit card companies and debt collectors are allowed to contact a decedent's spouse, administrator or executor of the estate, guardian, or any other person with authority to pay the decedent's debts from their estate. In addition, debt collectors may contact other third parties to obtain the identity and contact information of the person authorized to pay the decedent's debts.

However, they may not mislead any person into thinking that they have the authority or obligation (whether legal or moral) to pay the deceased person's debts.

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