For consumers, credit card debt may be an ongoing challenge passed on to surviving family members, even after death. Surviving spouses in Wisconsin may also face debt from credit cards acquired during marriage.
Two circumstances increase the odds of handing this debt on to a debtor's survivors. First, any co-signer or joint account holder may be liable for repaying the debt. However, any authorized users on those accounts are usually held not responsible for those debts.
A spouse may also be held liable, if the couple lived in a community property state, such as Wisconsin. In these states, any assets or debts acquired during marriage belong to both spouses as community property. Surviving spouses though, are not responsible for the spouse's separate debts, which are the debts acquired before the couple was married.
Joint account holders and co-signers should notify the credit card company when the account holder dies, and send it a certified copy of the death certificate. They should also ask what other document are needed for the issuer to update their records. And, moving the debt to a zero percent balance transfer APR card provides some relief because it allows payments without interest.
Some creditors and debt collection agencies may also try to make survivors pay-off debt, even though they have no legal responsibility or liability. They seek payment by asking where bills should be sent or threaten a report to credit bureaus.
The deceased person's estate, on the other hand, is responsible for credit card debt that was acquired only be the decedent. Any credit card debt should be reported to the person responsible for settling the deceased's financial matters, the estate's executor, to handle the creditors.
A lawyer may advise surviving spouses and other family members on their liability for credit card debt and options for dealing with it. An attorney can also help credit card holders address debt, so it does not become overwhelming for them or their survivors.
Source: Forbes, "After a death, what to do with left-behind credit card debt," Claire Tsosie, Feb. 16, 2017