What Happens to Credit Card Debt After Death?

What Happens to Credit Card Debt After Death?

/ 11:41 PM February 22, 2019

What Happens to My Credit After I Die? There are many scenarios that can affect what happens to credit card debt, debt collectors, bank accounts and other financial institutions after a person’s death. Depending on where the person lives, who applied for the card, and the value of their estate, credit card debt after death is paid off in different ways. Often times credit card companies lose their lent money if the amount cannot be paid by the leftover estate. Family members, ex-partners, loved ones, and anyone else who’s name is legally attached to the individual’s credit account can be held responsible for this leftover debt.

Debt After Death?

In most cases, credit card debt being passed on to another individual is a result of joint credit card ownership. Couples may open a joint credit card account, or a parent may cosign for a child. People may be surprised to find out that they are being held responsible for another’s debt; the credit companies may have attached the individual to the account when it was created after a quick signature approval.


state will pay your debt

How Does Estate Pay Debt?

When a deceased person leaves behind debt, the credit report is requested and the state will try to get the value returned to them by seizing the individual’s personal assets. Estate is everything that a person owned up until their death. The beneficiary of the estate being used to pay back the debt is likely to notice this impact. If the estate can cover the debt, anything leftover will be disbursed to the beneficiaries. If a significant debt is left behind, the remaining balance of inheritance could be decreased.

When a person with credit card debt dies, their estate is probated or disbursed to cover the debts and then passed to the beneficiary according to their will. During that time, creditors automatically have priority to cover the debt amount. If the beneficiary is not otherwise legally tied to the debt, then they are not legally liable for the rest of the debt amount. However, if a family member or friend was a cosigner of the account, it becomes that person’s responsibility to cover any remaining debt.

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credit card debt

How to Avoid Credit Card Debt After Death

Taking on someone’s credit card debt after death can be life-changing and financially damaging for authorized users, such but not limited to negatively impacting their credit score, not being approved when applying for a credit card. Fortunately, there are ways to avoid debt problems after someone has passed away. Divorced couples should always sever any joint accounts upon ending their marriage. This way, if an ex-spouse dies, the living partner will not be legally obligated for the debt of the deceased. Family members should also invest in life insurance to help cover any unexpected costs after death, like credit card debt. Individuals should also regularly check credit card reports to make sure they know exactly which accounts their names are attached to.

Although it may seem like a good idea at the time, individuals should be extremely cautious when opening accounts for other people. Unless the individual is able to regularly monitor the account and make regular payments, in addition to keeping the overall balance low, it might not be the best idea to cosign for another person’s credit card. Much like cosigning for a car or an apartment, as soon as the primary individual is unable to pay or stops paying, it becomes the cosigner’s responsibility.


credit after death

What Should You Do if a Family Member Dies with Credit Card Debt?

The more organized a person is when handling the credit card debt of a deceased person, the better. There are many important steps to take to make sure all accounts are managed properly.

The most important step to take is to gather all the information on any credit accounts that the deceased person has left behind, and notify the companies of the recent passing. This process may be a bit grueling and tedious, but it is vital. They will require documentation such as the death certificate, so the individual should try to obtain copies of these essential records. The sender should always keep copies and receipts of all interactions, and direct mail documents to ensure that proof of sending is easily accessible. Additionally, the account should be requested for closure and remaining debts be made known.

Making sure that no further use comes to the credit card account is also a crucial step in dealing with credit card debt after death. Although it may sound obvious, if the partner of a deceased person continues to use the credit card, it can result in a brutal financial consequence. This only applies if the person using the card is not a joint account holder. If they are on a joint account, nothing changes, and they can continue using the card as normal.

Aside from contacting the credit card companies, social security administration, community property state, major credit bureaus should also be alerted to freeze the deceased’s credit. Requesting a credit freeze will stop anyone from being able to access their credit file, which can help protect from identity theft. Always follow up in writing to make sure documented proof is attained.

Once everything is in order, payments should be sent and maintained if applicable. In any case, a legal attorney should be consulted when handling credit card debt after death.


Keep an archive with all your financial responsibilities to avoid your loved ones a distasteful surprise after your death. Be mindful when filling a new credit card application, make sure it doesn’t have annual fees,  foreign transaction fees, travel rewards and that your credit card issuer contact information is available for those you love.

Published February 22, 2019, Updated May 15, 2019.

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