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Relatives and Credit Card Debt After Death

By: Garry Crystal - Updated: 26 Nov 2012 | comments*Discuss
Credit Cards Debts Death Estate Executor

One of the major financial worries when a relative or spouse dies is the debts they leave behind. Liability for a deceased relative or spouse’s debt is a concern especially if there is property involved.

If my spouse dies will I be liable for credit debts?

There are a few instances when a spouse or partner is liable for the deceased’s credit card debts. If the credit card was taken out as a secondary card with the living partner as the main account holder then they would be liable. Another reason for liability would be if the remaining partner acted as co-signatory or guarantor on the credit card account.

Will credit card insurance clear these debts?

It could be that the deceased person took out credit card insurance to ensure that the balances would be cleared after death. Partners should always check credit card statements to check if insurance was included or paid as an extra. Credit companies should be informed as soon as possible in order for this matter to be investigated.

My husband has died, will I keep receiving credit payment demands?

Once a death had been registered the banks are notified and accounts will be frozen. Credit card companies will not be aware of this as payments usually come through banks via direct debit. This is when late payment reminders will start to appear from credit companies. These companies will need to be informed of your husband’s death either by telephone or in writing. They may also request a copy or the original death certificate as proof.

My father owns a house will this be sold to pay debts?

If your father did have an amount of debts that are not covered by any remaining personal funds or insurance then the property can be sold. If an executor or administrator has been appointed then they will deal with paying all debt’s from your father’s estate. Credit cards are not priority debts and usually come far down on the list of what is known as priority debts. Releasing some equity from the property may be an option to selling the property.

Can a joint property be sold to pay debts?

There are a number of different rules covering this situation. If the property were to pass over completely to the remaining partner then the property cannot be sold. This can sometimes come under a clause in the title deeds known as a survivorship clause. Legal advice should always be taken from a solicitor. Again, if a partner is held liable then extending a mortgage can be a worthwhile option to pay off any outstanding debts.

Can children be held liable for a deceased parent’s debts?

Liability for a deceased parent’s debts cannot usually be passed to children. If a son or daughter did act as a co-signatory or guarantor then they would be held liable. If a parent does have outstanding debts then these may be paid from the estate, which will then eat into any inheritance. Beneficiaries such as children are usually the last people to be paid from any will or estate.

Should I just ignore credit card letters?

Under no circumstances should a surviving partner ignore any credit card letters that continue to arrive after the death of a relative. Interest will still be accruing on account balances and if these debts are liable from the estate then this may be more to pay. Contact the companies immediately and inform them of the situation. It can be a lot to deal with at a difficult time and it may be that someone within the family can be appointed to deal with this task.

My mother has jewellery, can this be sold to pay debts?

Jewellery can be classed as part of an estate as can any of your mother’s personal property, even if it has been bequeathed to a beneficiary. The executor will assess all liable debts and how much can be paid from your mother’s estate. If your mother did not leave enough money or there is not enough money available through insurance policies then it may be the case that the jewellery has to be sold.

Where can I find more advice regarding debts after death?

One of the best places for advice on inherited debt after the death of a relative will be the Citizens Advice Bureau. They will not charge for any advice and an appointment can be made or simply telephone them for advice. Solicitors will also be able to give advice, and it may be the case that a solicitor or lawyer has been pre-appointed to handle the deceased’s estate.

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