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What Happens to Lingering Credit Card Debt after Death?

In most cases, if your estate has credit card debt the executor of your estate will need to use any funds left to pay those debts. There are different instances, however, where this is not the case.

For example, if one of the people on a joint credit card dies, the person who is alive will be responsible for paying that lingering credit card debt, even if he or she was never actively using the card. Authorized signers and users can potentially be stuck with credit card debt after the card owner passes away as well, but using these cards after the card owner's death can be considered a criminal offense.

Unpaid credit card debts can also affect the beneficiaries of an estate. Because the debts will have to be settled using funds from the estate, beneficiaries could be left with significantly less than they, or the original card owner, had expected.

Another issue that may arise with lingering credit card debt is the individual in possession of the card could be responsible for the debt even if that may not have been everyone's intention. For instance,, if it has been established that your spouse will pay all the family's credit card bills, but that spouse dies, you are now responsible for all the debt because the responsible party can no longer pay.

What Can You Do?

With so many variables, it is imperative that you plan accordingly. Make sure your estate plan addresses any lingering credit card debts or other debt obligations to ensure that your loved ones will have the funds to pay these debts and that special laws do not interfere with their inheritance amounts.

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