What Happens to Credit Card Debt When You Die

A difficult question to ask is: What happens to credit card debt when you die? No one wants to leave loved ones with unpaid credit card debt.

1. What to do after a cardholder's death

First stop using the card, make a list of outstanding debts, notify the creditors, and pay the outstanding balance if you're name is on the account.

2. How are the creditors paid back?

Your assets will be used to pay back your credit card debt.  This will happen before the remaining assets are distributed amongst your heirs.

3. What If You Owe More Than the Sum of Your Assets?

Joint account holders will be responsible for paying the remaining debt. Authorized users may not be legally responsible for repayment.

4. Assets you cannot use to repay creditors

The executor of your estate cannot use life insurance proceeds, brokerage accounts, retirement accounts, or assets in a living trust to repay the debt.

5. Which debts are not forgiven?

Secured debt like homes are not forgiven. If the mortgage is not paid, the bank can take the house to satify the remaining loan.

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