If a person dies with debts, his or her creditors may attempt to hassle the family members of the deceased to collect those debts. Many people wonder whether these debts are collectable. As a recent article explains, the answer is it depends.
For example, if a person has a balance on his credit card when he or she dies, the obligation will not extend to anyone else for payment, even a spouse. The only way a loved one can be held personally responsible for a credit card debt is if he or she was named as a joint owner on the card.
Although a person’s loved ones cannot typically be held liable for payment of a decedent’s debts, debt does not dissolve at a person’s death. Rather, the estate is often responsible for paying. Therefore, if a creditor of a loved one contacts you for payment of a debt, simply direct them to the executor of the decedent’s estate.
If you are the executor of the estate, it is important that you contact the decedent’s creditors immediately to inform them of the death. Also notify the three credit reporting agencies: (1) Experian, (2) Equifax, and (3) TransUnion. Request that they mark the account “deceased: do not issue credit.” By doing so you can prevent identity theft of the dead.
For assistance in crafting your estate plan, contact us at (626) 696-3145.
