Residents of Illinois might wonder who pays a deceased consumer's credit
card debt. When the consumer is a parent, grandparent or spouse, grief
is the usually the first concern of family members, but worry about the
decedent's financial affairs could come next when the grief subsides
and harassment by creditors begins.
Upon anyone's death, all of decedent's assets end up becoming the
estate's property, which includes vehicles, savings, investments,
real property and cash. At that time, the estate is actually responsible
for paying any liabilities, including taxes and debts. If there is a will,
the executor of the will or a personal representative is in charge of
handling the payment of all debts, which includes
credit card debt.
In the event that a consumer dies without leaving a will, the state could
appoint an administrator. This administrator will have the same responsibilities
as an executor would. Usually, this is a surviving spouse or children
of the deceased if there is no surviving spouse. However, nobody can be
forced to be the executor if they do not want to be.
If the estate does not have enough funds to pay the credit card debt and
none of the surviving family members or any other party was a joint holder
of an account or a co-signer, the credit card company might have to write
off the debt, according to one legal source. An authorized user on a credit
card account usually will not be held liable, but a joint account holder would.
When a loved one passes away, family members may be at a loss as to how
to proceed with handling the financial assets and liabilities left behind
by their death. An attorney could help by examining all debts and assets,
negotiating with creditors and determining which debts must be paid by
a spouse or other surviving family members.
Source: The Motley Fool, "What Happens to Credit Card Debt When Someone Dies",
Peter Andrew, July 19, 2014