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Credit card debt uncertainties after death

Credit cards are a fixture in most Florida households. However common they may be, many do not know what happens with a person’s credit card debt after death. No single answer applies to all cases, because there exist a diversity of state laws and card arrangements that can impact the outcome. A look at some of the more common arrangements may make dealing with this debt easier.

In a marriage, one spouse will often fill out the application for a card and later add the other spouse as an authorized user. This typically means that the authorized user will lose the card after the cardholder’s death and will not be personally responsible for the credit card debt. Companies can differ significantly in agreements, however, so it is important to stop using the card immediately and contact the issuer to prevent potential problems.

Another common arrangement is each spouse holding credit card debt under their name only. This can simplify matters as only the cardholder is responsible for the debt. The issuer can still seek payment through probate proceedings or from the spouse in a community property state. Depending on the size of the debt, a widowed spouse may benefit from Chapter 13 bankruptcy.

Surviving spouses are sometimes left with both debt and the partial or full loss of income used to service that debt. This tragic circumstance can result in a severe financial downturn. People who are in this type of a situation may want to meet with a bankruptcy lawyer to see what debt relief options might be available to them.

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