If you’ve been wondering, “what happens to credit card debt when you die” then this article is definitely for you. Death is never a pleasant subject to discuss, but it happens all the time.
The last thing you want to do after a death is worry about finances, but as an executor of your loved one’s estate, you have a responsibility to manage credit and debt on behalf of the deceased. Here are some tips for managing credit cards in the wake of a loved one’s passing.
The SoFi website states, “Typically, relatives aren’t responsible for paying a family member’s credit card debts upon death.
However, you may be responsible for paying your deceased loved one’s credit card debt if you cosign for a credit card, given the responsibility cosigning carries. Joint account holders also can be held responsible for credit card debt left after death since both account holders are equally responsible for paying the credit card balance.”
Locate death certificates
Before you can apply for a credit debit card, you’ll need to obtain copies of the deceased’s death certificates. If your loved one was married at the time of death, you’d need to get a copy from their spouse. If they were not married, then you should contact the person’s parents or guardians to obtain an official copy of their death certificate.
Get a Social Security number for the Estate of your loved one
- Get a Social Security number for the Estate of your loved one
If you are the executor or administrator of a recently deceased loved one’s estate, it’s important that you obtain a Social Security number for that individual. Otherwise, creditors may not recognize them and will be unable to provide any further information about their accounts.
- Apply for credit in their name and pay it off as soon as possible
This step is critical because it preserves the deceased’s credit score, which could otherwise drop significantly if there are no recent records on file with any financial institutions. If you’re not sure how much debt needs to be paid off or what kind of debts should be prioritized (credit cards? or mortgages?), speak with an experienced attorney who knows how these things work in your state so they can help guide you through this process.
Notify credit card issuers to close accounts
Now that you have a better understanding of how credit cards work, let’s move on to the more practical part of managing this account.
- Contacting the issuer will be necessary in order to close your loved one’s existing accounts and apply for refunds from any unused money.
- It is also important to notify all creditors involved in the deceased person’s estate; otherwise, they may continue charging interest on outstanding balances after the death of your loved one.
Review the balance of an account and request a final statement
After reviewing the balance of an account, request a final statement. Review it carefully to make sure all charges are valid. If there is a discrepancy, contact the credit card issuer right away and ask for clarification.
With a deceased loved one’s name on their account, you may need to assume responsibility for making payments or closing down the account entirely. If there is still money owed on the card when your loved one passed away and you have not received notice of this from the credit card company yet (which can sometimes take up to 6 months), contact them directly in order to discuss payment options and possible closure of accounts before incurring interest fees or other expenses due to late payments.
Credit debit is a way to help you manage your finances after your loved one has passed away. If you’re dealing with credit debit, we hope these tips have given you some good ideas on how to deal with it. It’s always hard when someone passes away and leaves behind accounts that need to be paid off in some way, but there are ways around it.
Author : Alisha