Debt After Death

Who is responsible for paying off the balance of the credit cards after the death of a loved one? And what about the mortgage loan? Not that you had anything else on your grief stricken mind when your loved one dies...but do you know the answers?

Banks and creditors may add to the daily phone calls that will require some kind of response after someone dies. And these calls are not always tactful. The good news is that legally, the estate of the decedent is ultimately responsible for the payment of outstanding debts.  So breathe a sigh of relief. And know that time is on your side. The bad news is that if you happen to be the spouse who co-signed or a friend who is a joint owner of a credit card, you will be responsible, whether you actually used the card or not and whether you knew about the outstanding debt or not.  Then it might be prudent to consult with a trusted attorney. Different states have differing laws when it comes to debt-particularly those community property states.  It's best to understand what your state laws are for debt collection after death. If you signed onto a credit card as a joint user to help out your aging parent, you may be surprised to find that Mom or Dad racked up enormous credit card debt and you are now saddled with the payment of it. If you are only  listed as an authorized user, you will not be liable- but don't use the deceased's credit card to pay any funeral expenses or make any purchases because you may end up liable for the rest of the balance due on that card. Do you know... 1. Whose names are on the account? 2. Whether you live in a  community property state where spouses are responsible for paying the debt even if your name is not on the account? Don't ever let yourself be intimidated to paying the decedent's debt prior to talking to an attorney.  Creditors are not allowed by law to mislead you  into thinking you are obligated to pay those debts.  If you are contacted, let the creditors know you are aware you have the right not to be harassed. Most creditors will require a certified copy of the death certificate.  It is much better to notify the creditors before they start hounding you. Know that if there are many creditors, they will want to get their money first.  Usually, it is the social security administration that alerts financial institutions when someone has died. If you are lucky, you will only inherit your grandmothers coin and silver collection ; not her debt.