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If a person is dead, who is responsible for their credit card debt incurred during the time they were alive? What if he was pronounced dead at 3:00 PM, and the purchase on their card happens (or get posted) 3:01 PM?

Alex B
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Dylan Czenski
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1 Answers1

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Unsecured debt, like credit card debt, will be paid by the estate. If not enough money exists in the estate (including selling property/etc.) to satisfy the debts, then the debt will be cancelled - it is not continued on to the heirs/etc.

However, if you have a joint card (with a spouse, parent, child, etc.), both holders of that card may be separately liable - meaning if one dies, the other will be liable for the debt if the first's estate doesn't pay it off.

As far as if a charge posts after the death - likely depends on if it was fraudulently used. If the person owning the card made the purchase and timing just was off, then it'll be just as if they paid beforehand. But, if the creditor can prove that someone else authorized the charge other than the decedent/cardholder, then that is a fraudulent act and could be met with criminal penalties as well as a civil lawsuit.

See this Bankrate article on inheritance and credit card debt for more information.

Joe
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    A postmortem charge also could be something automated. It also could be a company that charged the card only when the product shipped. I've had a charge from Amazon that showed up weeks after I placed a pre-order. – Loren Pechtel Jun 01 '16 at 23:55
  • Does getting a card with someone else's name count as "joint"? My fiance gets a copy of my Master Card with her name on it - but nothing else attaching it to her (Application, SSN, etc)? – WernerCD Jun 02 '16 at 00:55
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    @WernerCD Not necessarily. You can have a joint account, or an account in one spouse's name that the other just gets a card to use - but the responsibility is solely one spouse's to pay. (Same in parent-child relationship.). With spouses you also may have community property play a role. – Joe Jun 02 '16 at 00:57
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    It occurs to me the authorized user is another possible explanation for a non-fraudulent postmortem charge. The card owner is away and in a situation where contact is not expected for a while. They come to misfortune on the trip. The authorized user who didn't go has no knowledge of their demise and uses the card normally. – Loren Pechtel Jun 02 '16 at 05:58
  • For that matter, someone with a suitable power of attorney for the deceased might use their card after their death, either with or without knowing they've died. Maybe if they know about the death they shouldn't continue using their power of attorney, rather they should defer to the executors of the will. But I sort of doubt that anyone would consider it a fraudulent transaction if they got it wrong in good faith, and paid a bill or whatever. So that's another route by which such a quirk could come up. – Steve Jessop Jun 02 '16 at 10:48
  • In my country, in the lack of estate, the heirs have to repudiate in written form the inheritance of any debts – Rui F Ribeiro Jun 02 '16 at 12:54
  • @LorenPechtel The article I linked to discussed this re: authorized user specifically. It's all about intent of course - but in their example, they point out that even before death if you were aware that the debt would go unpaid, it would be fraudulent to use the card. – Joe Jun 02 '16 at 14:18
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    Seems like someone toward the end of their life (age, cancer, etc) could give away all their assets, ruin their credit and max out their credit card debt before they die. S/he could possibly use cash advances and spend it freely. – Sun Jun 02 '16 at 14:33
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    @Sun That would certainly be fraud, then, and the recipients of those gifts might find themselves on the wrong end of civil suits to recover that money, as well as possibly criminal charges for being complicit with fraud (if they knew what the person was doing). – Joe Jun 02 '16 at 15:40
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    @Sun In the UK at least, assets that have been "given away" by someone in the manner you described can be recovered - so for example, if a pensioner gives their house to their child before death to avoid it being used to pay off other debts, creditors can reclaim the asset from the new "owner". –  Jun 02 '16 at 16:49
  • @Sun - it's all about timing, and paper trail. – JTP - Apologise to Monica Jun 03 '16 at 23:43