Can a parent&#39;s credit card debt be eliminated if they have passed away?

Jan 10, 2011

yes, just send death certificate to creditors. call them to see what is needed to clear record.

PirateQueen

Jan 10, 2011

If they were joint on anybodys bank accounts they may come after that.

GSP

Jan 12, 2011

The credit card creditors have the same claim to any assets remaining in the estate as any other creditors would have...if there are assets remaining when the decedent dies. They can file a formal claim during probate...or cause a probate administration to be opened if one has not been otherwise.

chadburbage1

Jan 14, 2011

GSP is correct.

inajoy

Apr 20, 2011

Consumers were supposedly going to be protected by the 2009 CARD Act. The 2009 bill has provisions that are going into impact throughout this year. One provision of bill needs something simple. That credit cannot be issued unless the person getting the credit can prove that they can repay the obligation. The bill is causing some severe unintentional consequences, however. Stay-at-home spouses are very possibly going to be losing financial freedom, under the provisions of this bill.

RLP

Apr 20, 2011

If a will is probated with the courthouse, the credit companies have the right to claim payment. I would send in a death certificate first, however, before talking to them. If you do not probate a will, a death certificate should suffice. There are nuances to each situation, however, that may indicate a need for assistance from an attorney. Each state can be different, so check with your county's courthouse.

Eddie

Apr 20, 2011

BABS:

If they are unsecured credit cards issued in their name only, the Death Certificate might be sufficient. But you're never sure with those vultures. Not only do they take out insurance on every card/account, but they also try to collect from family members named in proxies & testaments after the individual has been dead and buried.

-- ED

Helpful Answer (2)

guestshopadmin

Apr 20, 2011

Also note, that even if the credit card companies write off the bad debt, they can declare the balance written off as income to the decedent in the year that they write off the credit card balance. So you can end up with the estate owing tax on the income to the federal or state government. You would get a 1099-C for the bad debt write off. If it's a joint account, the bad debt could also show up on the credit report for ALL persons on the account. Just make sure to collect the paperwork when you calculate the estate's final tax return just in case, Helen

Helpful Answer (1)

Eddie

Apr 20, 2011

GUEST:

As the new neighbor across the hall says: "You're fierce!" Great tip.

anonymous13319

Apr 20, 2011

Everyone above is correct. Any outstanding debt (liens, credit card debt, loans, etc.) goes against any assets that are left in the estate. The estate pays debts in a certain order. If debt is incurred by any party, it is only right that it be paid back either during a person's lifetime or after they pass (although I do not agree with the sometimes agressive tactics used to collect it.)