It is not easy to help the surviving spouses deal with the financial burden after the death of their better half. The financial crisis that may come around immediately can be overwhelming when faced together with the emotional breakdown one has to suffer.
Before we find out whether the surviving spouse is responsible for late spouse’s credit card debt, take these three essential steps soon after a spouse’s death:
- Contact creditors
- Ask for credit report
- Inform credit agencies
Once these steps are taken, you should check whether you are the bearer of the credit card debt of your spouse or not.
The region where you live and the account type will determine who is responsible for the remaining credit card debt after a person’s death. Here is some information you may find helpful:
Secondary Cardholders and Authorized Users
Whether the surviving spouse is the secondary cardholder or an authorized user, in both cases, the outstanding credit card payment are not be paid by him or her. In this case, the debt belongs only to the deceased and will be set of against the estate of the deceased.
Joint Account
In case of a joint account, where the account belongs to both the spouses, it becomes the responsibility of the surviving spouse to pay the outstanding balance. For spouses who have a joint account, the debts of the deceased are transferred on the name of surviving spouse. He or she can choose to continue to the account under his or her title or close it.
Individual Account
This is the tricky point. If the card was titled solely under the name of your spouse, you will not be considered responsible for paying the outstanding debts on credit card. However, debts and assets accrued during the period of asset are taken as joint property if you reside in a state that follows community-property law.
The ten states that follow this law include: Arizona, Alaska, Idaho, California, Nevada, Louisiana, Texas, New Mexico, Wisconsin and Washington. Living in any of these states will consider you responsible for the debt of credit card of your late spouse. Don’t forget to cross check with the laws of your state for more information.
Deceased’s Estate
In case the surviving spouse is not help responsible for the outstanding credit card payment, then the credit card payment is paid from deceased’s estate. If there are assets under the name of the deceased, the executor in charge of taking care of the assets will pay off the balance. However, if the assets are worth less than the outstanding balance, the credit card providers usually consider it as a debt loss and write it off by closing the credit card.
For example, for the outstanding balance of $10,000, the $1,000 worth of assets will not cover the entire amount. But since the company cannot ask for more after recovering $1,000, the remaining $9,000 will be written off.
Keep in mind the following important tips:
Educate Yourself – It is important to learn about credit cards and different policies to keep yourself secure from any such liability. Check the top websites and use them as a good resource with valuable information about different credit cards.
Know your Rights – Learn about the situations where you will be held responsible for your late spouse’s liabilities and vice versa. The Credit Card Act of 2009 has stated that the outstanding balance of credit card should be provided to the executor within thirty days of request. Also, the issuer has no right to charge annual fees or late fees when settling outstanding debt from the deceased’s estate.
The guidelines provided by the new Federal Trade Commission also restrict debt collectors to adopt an aggressive approach to the relatives of the decedents in order to recover the balance.
Get Legal Help – These doors are always open to you for help. In such cases, it may become imperative for you to learn about legal information. This information can be accessed from a website. You can seek assistance from an estate-planning attorney. They will help you through the procedure, legally.
It is important to possess some information on such important matters to relieve yourself from credit card debt of your late spouse.
Author’s Bio. Celina wants to help the general public deal with the emotional breakdown they suffer on the death of their loved ones along with dealing with the legal matters wisely, which can save them from undergoing financial crises. She recommends to check there’s more on credit card debt relief options at this website.