November 24 – Hispanic Solutions Group
When a person leaves credit card debt after death, a few things can happen. The debt will be the responsibility of the decedent’s estate, but if the estate is unable to pay it, then a co-signer or surviving spouse may be liable. Or the credit card company may have to pay off the debt entirely. Sorting out a loved one’s financial accounts after approval can be tricky, especially if there is debt involved. If you are managing the credit card debt of a deceased family member, read this guide to find out how it works.
When a person dies, their estate is required by law to pay their debts, including credit card debt. An estate is all the money and property that a person owns. The person in charge of managing the estate, known as an executor or administrator, pays the credit card debt using the estate’s assets during a process called probate.
For a simple example, let’s say a person dies with $ 25,000 in the bank and $ 5,000 on their credit cards. The executor of the estate would use $ 5,000 from that bank account to pay the credit card companies. If there were no other debts, the remaining $ 20,000 would go to the decedent’s beneficiaries (the recipients of a deceased person’s assets).
It can be more complex depending on the assets and debts that a person leaves behind. Some assets, such as life insurance policies, are not used to pay off the debt of an estate. These are paid directly to a beneficiary as part of the insurance contract.
If the deceased had several types of debts with different creditors, they are generally repaid in the following order:
- Debt with the federal government, such as tax debt
- Debt to a state government
- Secured debt, like a car loan
- Estate attorney and administrative fees
- Unsecured debt, such as credit card debt
What if the estate cannot pay the deceased person’s credit card debt?
Some properties do not have the assets to pay off credit card debt. In that case, what happens to the debt depends on whether someone else is legally responsible for it. Here are the two situations in which you can inherit credit card debt:
If someone else was a co-signer or joint account holder on the credit card, then they are responsible for returning it.
A surviving spouse is liable for the decedent’s credit card debt if he or she lives in a state with community property laws. States with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
If any of the above situations apply to you, then you will be legally obligated to pay what is owed. For large balances, you may want to spend some time reviewing the best ways to eliminate credit card debt. This can help you find the right debt payment method.
If you have any questions related to finances, credits and other related topics, but do not know who to turn to, contact us by going to Hispanic Solutions Group, writing to email@example.com, by calling 612-216-1599 or accessing financial information on YouTube, The credit channel, Our specialists in charge of Mrs. Jessica Aliaga will be informing you of any concerns about this and other financial matters of general interest and guidance as in this topic, today we bring you the following report so that you can make your most important economic decisions , also him We invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagram.