If there is money, or some money to pay off credit cards, “courts would divvy up the estate to creditors and whatever is left unpaid is written off,” she explains. Some of Creeden’s specialties in law include consumer protection, debtor rights, Fair Debt Collection Practices Act and Fair Credit Reporting Act enforcement and the taxation of estates and trusts. “If an estate is insolvent or doesn’t have enough to pay all of the creditors, there is nothing a creditor can do about it,” says Michelle Creeden, a New Hampshire licensed attorney at a multistate law firm, the Law Office of Fox, Kohler and Associates, PLLC tradename National Legal Center. OK, but what happens if my estate is insolvent – and can’t pay off my credit card debt? If you have more debts than you have assets, your estate is insolvent. The executor of your estate uses the assets in your estate to pay your outstanding debts. Debt is paid from your estate, which simply means the sum of all the assets you had at the time of your death. The more complicated answer? The credit card companies could go after the money you leave behind, the money in what everybody calls your “estate,” which may sound funny to you if your estate is, say, a two-bedroom apartment or condo or maybe even a fancy house that’s pretty nice but hardly a mansion.Īaron Leak, founder of ECL Private Wealth Management in Rockford, Ill., explains it this way: “When you die, any debt you leave behind usually must be paid before any assets are distributed to your heirs or surviving spouse. The non-complicated answer is that your credit card debt will probably be written off by the credit card issuer, but it can be a bit more complicated than that. What happens to credit card debt after you die? Well, there are a number of things to consider including existing credit card debt, authorized users, credit card rewards and more.
Authorized users are usually NOT responsible for leftover credit card debt.The estate generally takes over when someone dies with credit card debt.
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