When Someone Passes Away, do you have to Pay Credit Card Debt that they Owed?

Certainly, credit card debt among the elderly is at an all-time high. Elderly people just use their credit card for everything while they somehow stop thinking about how the debt piles up. Why, one out of three of the elderly have more debt on their credit cards than retirement savings. Somehow, they lose the ability to understand the gravity of what they are doing. Here's a question though - if you are, say, 70, and you have $10,000 on your credit cards, what happens if you pass away? Does the debt just disappear? Or are the next of kin supposed to be responsible and pay credit card debt left behind in this way?

With no kind of debt can the next of kin actually find themselves targeted. What can happen though is that if there is an estate left behind by the elderly person who passes away, the creditors, if they hold a note for a secured loan - a car, a house - they get what they are owed before any next of kin can share in it. With credit card debt though, things are somewhat different. The reason credit card interest rates are so high is that they give you unsecured debt. They don't hold any possession of yours as security to guarantee the loan with. Typically, if there is an estate, they do get paid; but they only get paid with anything that's left over after all the other creditors with secured debts are paid off. If there is nothing left to pay credit card debt with after all is said and done, they just don't get paid. A husband, wife or a child doesn't inherit anyone's credit card debt. Not unless they co-signed the credit card with the person who passed away. In that case, the remaining joint holder inherits all of the debt right away. If you do have to share a credit card with other family members, a good way would be to merely get the card on your own and then bring the other users on as add-ons.

The problem is that the general public doesn't seem to be aware of this. Many people somehow seem to imagine that credit card debt is inherited. Collection agencies are aware of this. They try to call the next of kin and try to convince them that the law requires that they pay credit card debt off that is owed by the deceased. Sometimes, the credit card companies themselves stoop to the level of trying to defraud the next of kin into believing that they owe something. They send threatening letters, make phone calls and so on.

If you do have a bank calling you and asking you to pay up, you really want to put as much space between yourself and this whole affair as possible. If things get impossible, call the bank and ask them for a copy of the credit card application for proof of who exactly owns the debt. To start off on the right foot, as soon as someone dies, you really could call the bank even before they call you, and ask them to stop charging interest on the credit card. Tell them that you are trying to settle everything that the estate owes and that you'll keep them posted.