With the widespread use of credit cards in everyday American life, it is natural to wonder what would happen if your parent or spouse passed away in Pennsylvania with a significant amount of credit card debt that remains unpaid. Will the credit card company come after you or other relatives for the outstanding debt? It is an understandable fear, but it is one that should not terrify you.
According to CreditCards.com, there are a number of factors that can affect whether your dead relative’s debt impacts your life, but generally, you are not going to be held directly responsible for the outstanding debt. The debt belongs to the owner and typically the debt will die with that person. There are, however, some factors that could involve you in the paying off of at least some of the debt.
If your father or mother was the sole owner of the card, the credit card company cannot approach you with a demand to pay off the debt. The debt belonged to your relative. When your loved one passed, the debt cannot pass on to a child or anyone else. On the other hand, if you were a joint holder of the card with your deceased relative, you are responsible for, at some point, paying off the outstanding debt.
Credit card debt may affect the share of inheritance that you would receive. While you are not directly responsible for the debt, you may end up “paying” off some of the debt if your loved one’s estate is approached by the credit card company with a request for assets to pay the debt. The more the credit card company receives, the less you receive. But if the estate does not possess enough money to pay off the debt, the credit card company is simply out of the remaining owed money. The company cannot compel you or other relatives of the deceased to pay the remainder of the debt. The creditor, notified of the insolvency of the estate, will simply write it off and move on.
It should be emphasized that once a loved one dies, the credit cards that solely belonged to that person should not be used any longer. According to another article run on CreditCards.com, a person might be an authorized user on a decedent’s credit card, but even in that instance the person cannot use the card without risking charges of fraud. Additionally, using a deceased’s credit card can make the user liable for not only new debt but the old debt by the decedent as well.