Do You Have to Pay Your Deceased Spouses Credit Card Bills?

Written by Ross Quade

Currently, all of the accumulated credit card debt in the country amounts to well over one trillion dollars. The average American household owes almost $15,500 in credit card debt at any given time. The problem of credit of credit card only gets worse when you consider that payment delinquency rates are also increasing. The end result is that a lot of Americans die while owing significant amounts of credit card debt.

Depending on personal circumstances, local laws and place of residency requirements, credit card debt do not just simply vanish after death. Does a surviving spouse have to assume and pay for the credit card debt of the deceased spouse? Again, the answer to that question differs according to local laws and residency.

If this problem is affecting you, we have advice that may help clarify the situation.

Solely Assumed Credit Card Accounts

In most instances, credit card debt is the sole responsibility of the spouse who is burdened by such debt. As long as the credit cards and corresponding debt were solely owned by the deceased spouse, the surviving spouse has no legal responsibility to voluntarily assume those debts posthumously. It is not so much that credit card debt is forgiven after death. It’s more than to the fact that it’s legally difficult for credit card issuers to collect such debts after the death of the primary cardholder.

As the surviving spouse, this does not mean you are entirely in the clear. A credit card company can send you collection notices and harangue you with phone calls for a time to try to collect the debt. However, beyond such tactics, there is not much legally they can do.

Jointly Owned Credit Card Accounts

If you jointly owned any credit card accounts with the deceased spouse prior to their death, then you are most certainly responsible to pay off those debts. Jointly owned credit card accounts are like cosigning for a loan. The death of the primary debt holder does not relinquish the cosigner of the responsibility to pay off the debt in full. Additionally, if you allowed a spouse to charge on a credit card in your name, then you are also legally required to pay off the debt after death.

Community Property States

If you were married and resided with your spouse in a community property state, then chances are that you are responsible for all credit card debt. Even after death. In community property states, all properties, assets, finances, and debt are shared equally by spouses. Even if one spouse assumes credit card on their own. For example, even if one spouse alone had a credit card and died with debt, the surviving spouse assumes that debt.

Currently, there are ten American states that mandate community property laws in a marriage. These states are Alaska (opt-in), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Final Expense Insurance Coverage

Before you find yourself assuming debt after the death of a spouse, you may want to look into buying final expense insurance coverage. Final expense insurance is a truncated form of life insurance that is mainly used to cover the costs related to imminent death medical expenses and funeral arrangements. There are no medical physicals required and most applicants are approved.

Premiums could be as little as a $1 a month, though they can also cost in excess of $100 a month for policies with more benefits. As a spouse, you can apply for your own spouse and list yourself as a beneficiary. Final expense insurance may not cover all your debts after the death of a spouse, but it can ease the stresses involved in paying for funeral arrangements.

Remove All Uncertainty

Never assume that you must pay for all of your deceased spouse’s credit card debts. If you start paying for the credit card debt of a deceased spouse, even though you might not legally have to, you will automatically assume the debt. Talk to a lawyer, know your rights and consider your option.

 

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Ross Quade
Ross Quade has been a licensed insurance agent since 2008. State of Texas license #1702965. He has a Bachelor Degree in Psychology from University of Minnesota and minored in Applied Economics. He has been quoted in several online publications including Huffington Post, Young Startups and various financial blogs. Ross frequently writes about issues related to the insurance and finance industry.
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