Are the survivors of the named beneficiary responsible for the credit card debt of the original policy holder?
UPDATED: Jan 25, 2016
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Free Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Asked January 25, 2016
Unfortunately the answer to that question is not a simple yes or no, for there are many factors that are used to determine who is responsible for paying the outstanding credit card debt of a deceased individual. The issues that are factored include the state that the deceased lived in, the beneficiaries relationship with the deceased and the type of account that was held by the deceased.
Spouses May have to Pay Credit Card Debt in Some States
If you are the spouse of a deceased person that lived in a community property state, such as Texas, California, Nevada, New Mexico, Idaho, Washington, Wisconsin or Alaska, then you are liable for the remaining balance of a credit card debt even if your name is not on the account or even if you were not aware of the existence of the account. Living spouses are not liable for unpaid credit card debt if they and their spouse lived outside of a community property state. Other beneficiaries who live within the borders of a community property state, such as adult children, are not liable for outstanding credit card debt.
Beneficiaries: Co-applicants and Authorized Users
Beneficiaries who are co-applicants, joint account holders and co-signers of a credit card with a deceased person are liable for the total balance of the account, even if they did not use the card. Beneficiaries are not liable for credit card debt if they are an authorized user or an add-on cardholder. However, if an authorized user or an add-on cardholder continues to use the credit card after the account holder has died, then they can be criminally charged with credit card fraud since they are not responsible for paying the debt.
Who is Responsible for the Outstanding Credit Card Debt?
When a deceased person has an outstanding credit card debt, the balance is transferred to the deceased person's estate. The estate is responsible for paying the debts, which can be paid by the executor of the estate with funds that belong to the estate, and in some cases, the executor of an estate can sell valuable items of the estate in order to acquire the funds to pay for outstanding credit card debts.
Answered January 28, 2016 by GWGLife