Many Americans have a significant amount of credit card debt. That means it’s not uncommon for people to die owing thousands of dollars on one or more credit cards. That’s in addition to many other types of debt they might have. Here we’ll focus on credit card debt.
It is critical for the personal representative (executor) of an estate to find out what kind of credit card debt the deceased left. It’s also important to notify the credit card companies of the death. This will help prevent identity theft or any other kind of fraudulent use of the card. Cutting up the cards is important, but it isn’t enough. Credit card numbers are often fraudulently used by those with no access to a physical card.
Who is responsible for paying off the debt?
Unless a card has a joint owner, like a spouse or adult child, or someone co-signed on the application, the estate itself is responsible for paying the debt. It needs to be paid from the estate assets before any inheritances are distributed.
Credit card companies and other creditors and collection agencies typically can’t require family members and/or estate administrators to pay a deceased person’s debt except in the cases discussed above. However, a personal representative could potentially be responsible for paying off debt or fees if they distribute inheritances before these liabilities are handled to whatever degree the estate can pay them.
What if an estate is insolvent?
If a deceased person left more debt than assets, their estate is considered insolvent. Florida law dictates in what order debt and other expenses are paid off. It’s critical that this is handled correctly and according to the law to avoid unnecessary legal or financial complications. Those who are administering an estate that they believe may be insolvent should get experienced legal guidance as early as possible, accordingly.