Can You Pass On Credit Card Debt to Your Kids?

Thankfully, no. Credit card debt is a type of unsecured debt. As such, the money you owe will be taken out of your estate after you die. If your estate can’t cover the costs, the credit card company will consider the debt to be uncollectible, and they will charge it off.

It’s worth noting that some collection agents will try to convince your surviving family members that they should pay the debts you incurred. They have no legal obligation to do so, and refusing to do so will not reflect negatively on their credit reports. Be sure that your loved ones know their rights. A probate attorney can be a useful ally if creditors won’t leave your family members alone.

Though unsecured debts aren’t the responsibility of your survivors, there are special circumstances in which they may be liable for payments. For example, if your relative is an authorized user listed on your credit card account, they will be responsible for any charges they make following your death. Once those charges have been paid, the account is typically closed, leaving the authorized users with a lower credit limit and a lower credit score.

Joint account holders can still be held responsible for outstanding balances on co-owned credit card accounts. For example, if you took out a credit card in both your name and your spouse’s, your spouse will continue to be held accountable for the debt on that account. The spouse will also continue to have access to the credit card until they close the account.

It’s not fun to think about death and the effect it will have on your credit card debt, but it’s important for your survivors to know that they have rights and responsibilities. They should keep all documentation of the account, any charges they’ve made, and any collection attempts. The burden of proof is on the credit card company. For more information, do an Internet search or consult a local attorney to become more familiar with the laws in your state.

Did you find this article helpful?