${site.data.firmName}${SEMFirmNameAlt}
Call To Schedule An Appointment
Cherry Hill856-673-0048
Linwood609-398-3447

Estate administration considers credit card debt after death

If an individual dies unexpectedly, what happens to their unpaid credit card debt?

As with most debts, credit card companies will usually attempt to get compensation from the cardholder's estate. New Jersey residents, as in other states, with an estate plan may benefit from knowing how this process works in estate administration. In most cases, the debt of the cardholder will be paid from their estate. If there is not enough money in the estate to pay the debt, credit card companies may seek to obtain the money from the relatives of the deceased person.

That isn't standard practice, however. If credit card companies are unable to collect on the debt from the cardholder's estate, they often drop the debt. The reason for this is because relatives are not legally obligated to repay the debt of a deceased person. The exception to this rule is when an account was opened up as a joint account.

A joint account means that both named parties are responsible for the debt and the credit card company will be able to collect from either one of the parties. So if one party dies, the other will become financially responsible for outstanding debt.

When the person using the other card is simply an authorized user on the account they are not responsible for the debt and when the account holder dies, the account must be closed. If the authorized user wishes to use credit, they will have to apply for an account on their own.

When a New Jersey resident dies leaving behind various debts, the estate executor must consider this and the potential outcomes. Estate administration will be necessary to review the details of each account before proceeding.

While it may be uncomfortable to talk about debt, it is an important consideration for estate planning at all ages, and should be taken seriously. Without this step, loved ones may find themselves in a tough spot down the road.

Source: Boston.com, "What happens to credit card debt when you die?," Cheryl Costa, June 29, 2012

No Comments

Leave a comment
Comment Information
Law Offices of Nancy M. Rice
Representing clients in Ocean City and communities throughout New Jersey.

LOCATIONS

Law Offices of Nancy M. Rice
1236 Brace Road, Suite F
CHERRY HILL, NJ 08034

Phone: 856-673-0048
Fax: 856-673-0052
Map & Directions

Law Offices of Nancy M. Rice
Linwood Professional Plaza
2021 New Road, Unit #9
Linwood, NJ 08221

Phone: 609-398-3447
Fax: 856-673-0052
Map & Directions

Cherry Hill Office

Contact the firm

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy