What happens to credit card debt when you die?
It must feel scummy being a creditor sometimes.
By many accounts, creditors must come a-hounding if a family member – should they have carried a balance on their credit card – passes away.
The question(s) of the day, though: does a spouse or loved one’s card debt transfer to you upon their death? Are you responsible for paying it?
The simple answer is no. According to debt expert Margaret H. Johnson, most credit card balances do not fall into the laps of widows, children or parents after loss of life, as rumoured.
But there are things you need to be aware about – most importantly signatures, and who has signed for what purchases.
If the deceased’s debts were exclusively his or hers – that is, it was only their account with no one else as a joint holder – the debt is theirs and theirs alone. If there is not enough left in the deceased’s estate to cover the loss, credit card companies will have to write this debt off as uncollectible.
What you are liable for is what you’ve signed for, whether that be as a joint card holder at the time of the account’s opening or as someone with charging privileges making a purchase. So, if Joe buys a plasma TV on his wife Susan’s card weeks before she passes, that is his debt to cover even if it wasn’t his credit account.
But using that same scenario, if Joe and Susan were shopping together and Susan signed for the television, that would be her debt and could not legally be transferred (money-wise, at least) to Joe upon Susan’s death.
Of course, that is not to say some creditors won’t try to make you think otherwise.
Consider the case of an Oregon woman who was stuck with her husband’s $14,000 credit card balance when he passed away.
Since there wasn’t enough cash left in the man’s estate to cover the debt, she learned (rightly) that she was not responsible for the debt her husband had racked up. She soon stopped making payments, but that’s “when things got ugly,” reports CreditCards.com.
Over the next 32 months, the woman was routinely harassed by six different collection agencies who – despite being incorrect – called 24/7, even reporting her to credit bureaus for non-payment.
The card company eventually ended up suing the woman, a futile effort since she was not a co-signer on her husband’s account. After she hired an attorney, the creditor soon dropped the suit.
“They didn’t understand the hell they put me through,” she tells CreditCards.com, advising not to “let them bully you. Stand your ground. Make sure you get the facts, and challenge them.”
And the fact is, you are not responsible for any debts you have not contractually created. Unless you’ve signed for the debt, someone else’s liabilities cannot become your financial responsibility upon their passing.
Have you had any experience with pushy creditors telling you the contrary after a family member’s death?
By Jason Buckland, MSN Money
Posted by: Louise | Jan 8, 2022 8:20:34 PM
Is this a Canadian law or a US law?
Posted by: Dan | Jan 8, 2022 8:30:53 PM
You think this would be the case, but it really isn't in the bigger picture of things when it comes to the government. This generation borrows money like mad to pay for things today that they can't afford and the next generation gets to handle the tab Kinda makes you think, doesn't it?
Posted by: Grant McLaren | Jan 8, 2022 8:43:56 PM
We are in the beginning process of dealing with these unscrupulous credit card companies. Legalized loan sharks. They have issued cards totalling $30K to a family member. This person has since passed, and now they expect payment. The deceased has no assests, no income, no estate. Yet these comapnies attack an 80 year old man with threats and intimidation. This sort of thing needs to be exposed. I suggested to rude woman on the other line that the person who approved these cards should be the one to pay them off. That may get this stuff under control. Why would anyone with a lick of sense, loan money to someone who has no means of income, no assest?
Posted by: Grant McLaren | Jan 8, 2022 8:47:17 PM
To answer Louise, this law applies to Canada too. All one is required to do is notify the company, and send a copy of the death certificate. That's it. They will tell you that you need to do all these other things, but that it thier policy, not the law. By law inform, and a copy of the death certificate. That is it.
Posted by: Claudia | Jan 8, 2022 9:24:25 PM
What about when credit companies/banks give credit to people who have no permanent residence in the country yet they still give them tens of thousands in credit and when the person gets deported, what happens then? I know some one who was deported and still owing $15,000 to a line of credit. The collectors keep calling and sending lettes to his last address even though they have been told for over 5 yrs that the person was deported....LOL!
Posted by: jame | Jan 8, 2022 9:26:52 PM
yes. when my sister died they tried to get my mother to pay for my sister's credit debts! can you believe that? they didn't even live together...
Posted by: Coleen | Jan 8, 2022 9:47:54 PM
We are going through the same thing. My Mother passed away 3 years ago and had a $4,000.00 balance on her card. She left nothing, no insurance, no savings, nothing. The bank has since passed her information on to a collection agency and they have been calling once a month, for the past TWO YEARS. I've told them to 'pound sand', it's an unsecured loan so the debt died when she did. That has not stopped them. It's horrible when the collection company calls and asks for her by name and each time wants me to send them yet another copy of her death certificate. I'm just waiting for them to take me to court. I'll be filing a counter-suit for harassment.
Posted by: gan0n | Jan 8, 2022 9:57:50 PM
Coleen: you should counter with harassment.
This abhorrent practice of credit card companies lending obscene amounts of unsecured debt to people who shouldn't have it is ridiculous. And of course, so is lying to you to get your loved one's debts paid. It's a shame they have such a racket (aka 'their business') and have to resort to these tactics to stay in 'business'. They might as well come to my house and break my legs to collect the debt next time.
Posted by: Joey | Jan 8, 2022 10:17:08 PM
My dad passed away. He had credit card's for gas and other thing's. I was getting gas at the same place also. But, I paid cash for it. Even though the company knew he passed away, they kept harassing me for money. The card's had nothing to do with me. One day I went to the gas station to explain to them. The owner sent his mechanic to try and intimidate me. He took a swing at me. I dropped him like bad news. One shot..pow. Then the owner came at me, he swung, I ducked and grabbed him by the neck and rammed his head through a plate glass window. I was frothing at the mouth and eyes bulging. I was so angry. Then the parts guy took off down the street, with me in hot pursuit. I didn't realize a paraplegic in a motorized wheel chair could go so fast. I chased him for about a block, then came back to the garage and got my car. I never did catch him. The garage never phoned or bothered me since.
Posted by: Mike | Jan 8, 2022 10:43:44 PM
Your signature is the payment, authorizing the credit card company to administer your affairs and get your money for you, as a fee they charge intrest untill you tell them to hit the road. We are all rich but the Government will never tell us because we are all wards of the state / a child SIN card or social security card holders. It is simply unlawfull to govern anyone without consent.We are a child because we have applied/ begged, submitted / consented , and registered/ entered into contract with them as a child.
Do children not beg for a cookie and follow adults rules in order to be good and get a cookie? We all have agreements with our parents to be good and then when we ask for a cookie they give us one: but when we are adults we dont ask we just walk up to the jar and take one, or even tell someone to go and get one fort us, like a real master would. This is how the Government veiws us untill we wake up/ grow up and claim we are adults!!!!! The government are our representatives, only by consent, so fire them if you dont like what they are doing, if you are an adult.
Peace Mike
Posted by: Arby | Jan 8, 2022 10:44:08 PM
And this is why you shouldn't waste money on credit card "balance insurance". They know it, but they hope you don't.
PS: Colleen: Mention harassment to the next caller and they will stop. They are not legally permitted to call you.
Posted by: Mike | Jan 8, 2022 10:48:53 PM
If you really want to make credit card companies shake, demand the original copy of contract and or the agreemnet in blue ink that you signed, if they dont have it they have already breached the contract.
Legal/ illegal are acts statues, which are rules of a society
Lawfully and unlawfull are based on common law, no fraud in contracts, no damage to other property, and no harm to an individual.
WHAT SOCIETY ARE YOU A PART OF????????????????????????????????????????????? if you dont know then who's rules are you following?????
Peace MIKE
Posted by: bothered | Jan 8, 2022 10:51:31 PM
Yes 2 years ago an uncle passed...he used the wifes name also a holder. Yet she has NEVER signed anything she was demanded to pay the $20,000 plus. They hounded her so much that she did even though she was told not to. The threats that she was given beyond families words scared her so much at 70 years old she paid it...these phone solicitors get away with double murder...no matter how much the family has complained to the proper government areas nothing is done about it anyways...so what is the point of having agencies in charge of complaints when nothing is done anyways..???Another thought to be of concern.
Posted by: Mike | Jan 8, 2022 10:52:17 PM
Entering court is creating conflict/ unlawfull. try offering discussion first and let them know the real rules.
DO DILAGANCE FOLKS!!!
Posted by: LP | Jan 8, 2022 10:57:00 PM
We kept getting a cell phone bill when my father passed - but we gave them the death certificate and advised them every time they called he passed. The phone wasn't in use they could tell that - it was super difficult to cancel the account even with a death certificate. Finally, the last time they called we advised he moved. They asked for an address we gave them the plot number and address to the Cemetry. Never heard from them again. LOL
Posted by: Chickie | Jan 8, 2022 11:57:20 PM
I had a company call shortly after my husband died wanting payment for a card I did not even know he had. When I informed the woman that he had died, she said " Well just because he died doesn't mean you don't have to pay his bill" in a very rude disrespectful manner. I was so shocked at her tone I didn't even think to ask for her supervisor to complain.
Posted by: Peter | Jan 9, 2022 12:25:23 AM
Folks, with a cunning & perfectly legal approach...
1. As stated above, don't co-sign or have any sort of joint bank account or line of credit.
2. Always sign your own shit and make sure all of your current assets (including any investments of cash, stocks, bonds or gold bullion) are transfered in due time to a spouse, child or other close relative as they cannot claim any assets that are not under your name.
3. Make a will and have it notorized and give a copy to spouse and / or close relative that will execute your last wishes accordingly.
4. Rack up massive credit card debt on your final years or if by some unfortunate circumstance failing health or cancer strikes you at an early age and live the remaining years in ridiculous abundance & style, courtesy of the "legalized loan sharks".
5. Die in peace knowing that you'll have the last laugh and all the money that these "plastic pushers" and this "DEFACTO Government" owed you...that at least some of it actually made you live life the way it was meant to be lived...no longer a ward of the state, no longer a slave to a SIN as a government agent...a "Free Man on the Land" at least in principle!
cheers,
Peter
Posted by: Steed | Jan 9, 2022 12:18:29 PM
Peter, your suggestion to "rack up massive credit card debt" is considered theft. Knowingly getting into debt with the intention of never repaying is stealing, pure and simple, and makes you worse than the credit card companies you despise. How does this act of "theft" make you live life the way it was meant to be? You only deserve to get what you have worked for. If you can't afford a certain life style, you simply do not deserve it. The stupid mentality that some people have believing they are owed a way of life is what is destroying us.
By the way, I do not work for a credit card company (which I am sure some one will want to assume). I have owned 10 credit cards over the past 30 years, never carried a balance and never paid a cent in interest.
Posted by: Lisa | Jan 10, 2022 10:50:24 AM
Well said "Steed!" (Wow, I truly cannot believe the way some people think.)
Anyway, my experience is, about 20 years ago, I had enough "credit" through my cards, that I could definitely have put myself into bankruptcy, if I chose to. However, I'm a responsibile adult, so this is what I did. I simply called several card companies and asked them politely to please lower my limit. They were very courteous and obliged, immediately.
Please remember, it's not up to them to be your parents and know how much you can truthfully afford. THEY are doing YOU a service by allowing YOU to lend from them, (although I do think interest rates can be outrageous.) However, IF you are paying a portion of your bills on time, every month, I've heard, you can ask for the interest rate to be lowered, and some will do it. Also, please be smart enough to know NOT to be paying "minimum" payments only. The interest on the payments will, in the end, turn out to be alot more than the payment itself.
No, I don't work for a credit card company...and I also had a company phoning ME when my father died. It wasn't alot of money, but it was some...and I instantly paid it. Why? Well, my father had good credit and definitely would have wanted me to do the "right" thing...so I did.
Hey...on the good side of things, if you turn out to be a good customer, some of the "perks" are quite nice.
Posted by: Wayne | Jan 11, 2022 2:28:17 AM
its only money
we trade our time for a value that we agree on for the moment
sometimes our values are changed for a moment and we are tempted to spend tomorrows profit on todays temptation
the overall value of that decision remains after all money is earned borrowed and paid back
sometimes its worth it and mostly it is not
all purchases or work done with the exchange purely cash have amounted in a total greater value when looking back
all debt and credit amount to a waste of both time and effort and in the end we may never truly experience the total value of our tempted intentions
death is simply the state inwhich we cease to experience life
make all purchases with the witness of a loved one and you will not regret the outcome for it will be shared and therefore maximizing the value of the deal
Posted by: Miles | Jan 11, 2022 2:40:28 AM
The people in mass are ignorant and the teachers that teach them from kindercare are just as ignorant. Creditors didn't come to earth from outer space with godlike powers or any such notions. Creditors originally got their power from lying, cheating and downright killing the people they wanted to take either things of value or threaten them with harm if they didn't participate -- much like the Federal Reserve System of the United States and or the one in China that has now been dominated by the World Bank which is run by the same ilk as those who run all the other Federalist Banks. Any country which denies use of the money makers systems -- will either stay impoverished and starve -- or will be outright killed off. Even other bankers who fall out of grace with the ruling bankers --- will get the same treatment. This is "Planet Death" that everyone calls Earth -- but, let me tell you -- you don't get out alive...and while you're here the Banker is God and you Will pay him/her or they will have your skin.
Posted by: Sheldon | Jan 11, 2022 9:08:11 AM
Lisa: While it's true that responsible adults should be able to control their credit expenditures, consider this. When I was in college, I worked 3/4 time (about 30 hours a week) making $8.40/hour. Total annual income was less than $15,000. I had FOUR credit cards with a total credit limit of almost $29,000. Tell me how that makes any sense! A 23 year old student with double the available credit as their total yearly gross income. It should be illegal to set someone up for failure like that.
Posted by: Lisa | Jan 11, 2022 11:11:04 AM
Sheldon, I completely agree with you about credit card companies. They shouldn't be allowed to "set you up for failure." I also think that the interest rates are often outrageous. However, I DID learn from my parents, NOT the credit card companies, what I would call "pertinenet information." (This I already mentioned previously.) To boot, this was almost 25 years ago now. Therefore, things with credit card companies obviously haven't changed much, have they? (I agree that this is all very frustrating.)
All I can suggest, if you live on this earth, and you're human (and you don't live in the back woods somewhere...and therefore, don't need money to live)...follow the rules or don't have a card. The bottom line is, the company does not HAVE to LEND a person money. However, since the company DID give you the PRIVILEGE of having a credit card, it's still your responsibility to pay "in due time."
I don't know what else to suggest, since those are the "rules" to living where I live.
Posted by: Craig | Jan 11, 2022 5:57:14 PM
I find it amazing that people are trying to blame Credit Card companies for 'setting them up for failure'. Do some of them charge too much interest for the 'priviledge' of borrowing? INDEED. But to ask why they would offer you more credit than you make in a year is ludicrous!!! Who is it that applied for the card? The user. Who is aware of their cash flow? The user. Who is the one who is borrowing the money? The user. Who is responsible if the balance is equal to more than they can pay back? um....let me think....oh yeah! The user. I too have burned myself with credit card debt. I learned my lesson, corrected how I viewed Credit Cards and am better financially for that lesson. The point being....take responsibility for your own actions and stop trying to blame others for your mistakes. Time to grow up people. It's amazing how much opportunity opens up when you grow up and take responsibility for your own actions.
Posted by: jaggi | Jan 14, 2022 7:11:06 PM
why would you buy any thing on credit card if you can't or unable to pay at least minimum payment.
Posted by: Ralph Rack | Jan 15, 2022 12:01:07 PM
Please delete in Canada all references to US rules and laws. ALL CREDIT CARD COMPANIES OPERATING IN CANADA SHOULD HAVE TO ABIDE BY OUR LAWS. nO ONE AS AN HEIR OR BENNEFICIARY IS RESPONSIBLE IF THEY HAVEN'T GOT SIGNING AUTHORITY AND THE CARD IS ONLY IN THE NAME OF THE HOLDER. tHAT IS THE RISK THE CREDIT CARD CO SHOULD TAKE FOR THE CHARGES THEY MAKE TO THE CUSTOMER.
Posted by: abrill09 | Jul 18, 2021 4:01:56 AM
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Debt Advice
Posted by: andrew001\ | Aug 5, 2021 11:11:21 PM
Today, however, it is important to choose and use credit cards wisely. Beginning with one’s own financial situation, consumers must choose credit cards with limits that are within their means. The convenience of purchasing items on one card makes perfect sense if it is done wisely. A credit card provides a monthly breakdown of all your expenditures and credits, and is an excellent tool in planning a budget.
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andrew001
Credit Card Services
Posted by: David | Aug 6, 2021 7:27:07 AM
Every dark night is followed by a bright sunny day. So, patience and
attention is required and things will be fruitful in near future.
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Credit Card
Posted by: Roy | May 4, 2021 4:31:53 PM
My father just passed leaving us with a CC debt of almost $20,000. Living in Ontario what is our rights, do we have to pay this amount. There was no joint account on the card, it was my fathers card. The other issue is his card was used after his death which is not good. The problem is his card was lost and my dad was not good at remembering things due to cancer so he had his PIN written down. Regardless the card is at the limit, I have informed the CC company he has passed and faxed them his proof of death.