Are My Loved Ones Responsible For My Credit Card Debt Even If I Am Gone

In normal circumstances, when a person passes away, his or her spouse or descendents would inherit the assets or wealth. However, when a person passed away and left his or her credit card debts, is his or her spouse going to “inherit” the debt too? Who ends up paying the bills? The topic seems to be very interesting as there are more and more people get deep into huge debt during global financial crisis. What if their lifespan is short and they are not able to pay off their debt? Are the banks or credit card companies the victims as they fail to get their money back?

Let’s see the scenarios below. You will get a better understanding how it works:

First Scenario
If the credit card debts are in the in the name of the deceased alone and there is no one else that has agreed to be responsible on the debts that were incurred by the specific credit cards, then no one is legally bound to pay for the outstanding balances. As a result, the banks or the credit card companies are required to just absorb all the remaining debts. No matter how many family members the deceased has, all the family members are not responsible for the outstanding.

Second Scenario
If someone else cosigns on the credit card agreement with the deceased, then he or she is definitely responsible for the debt. This usually happens when the deceased has a joint account with someone else. Since the name comes along with the credit card agreement, then the person is made liable for the debt. The business world is very realistic. No matter how depressed and helpless your spouse is after you have gone, the creditors will still go against him or her for the outstanding balances. As a result, we can see that it is not really ideal to have cosigner for credit cards.

Third Scenario
If the person who passed away is the supplementary card holder, the debt incurred by this person will be borne by the principal card holder. The principal card holder has to absorb the full amount of the debt.
Sometimes the creditors will try to get the deceased to pay off their debts with their assets (if any) especially when their debt amount is huge. In general, in many cases where the debt amount is not too much, the creditors would just write off the debts as bad debts. They will not collect the debt from the family members of the deceased.

Last but not the least; as a responsible person, you are advised to have a proper debt management plan when you have debts on hand. Make sure you don’t leave the financial burden for your loved ones when you are gone one day. If you are thinking of committing suicide to solve your financial problems, you are 100% a FOOL! Never ever do that! It is not the solution for getting a peaceful mind.