OfTheCross
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When a person dies, the courts freeze their assets until their will is validated (if they have one). Then, their debts are settled and the beneficiaries of their will are identified. This process is known as probate.
Credit card debt is a type of unsecured debt, which means it’s not linked to any form of collateral, like a car or house, and the state will probably mandate that a person’s remaining assets are used to pay off the debt.
Such assets might include any remaining cash and/or property with cash value. Some assets, such as retirement accounts, eligible brokerage accounts and life insurance payouts, might be shielded from this process as long as there is a legal beneficiary (known as a custodian).
If the deceased has no assets, loved ones won’t be directly responsible for paying the debt unless they are a joint account holder on the deceased’s credit card, according to the Consumer Financial Protection Bureau (CFPB). In some states, the surviving spouse may be responsible. Authorized users are generally not held responsible for the deceased’s unpaid balances.
Here's what happens to your credit card debt when you die
So, basically your loved ones are safe unless you're joint. If you want to be super sure they're OK, it'd be smart to add beneficiaries and custodians to all of your stuff.
Credit card debt is a type of unsecured debt, which means it’s not linked to any form of collateral, like a car or house, and the state will probably mandate that a person’s remaining assets are used to pay off the debt.
Such assets might include any remaining cash and/or property with cash value. Some assets, such as retirement accounts, eligible brokerage accounts and life insurance payouts, might be shielded from this process as long as there is a legal beneficiary (known as a custodian).
If the deceased has no assets, loved ones won’t be directly responsible for paying the debt unless they are a joint account holder on the deceased’s credit card, according to the Consumer Financial Protection Bureau (CFPB). In some states, the surviving spouse may be responsible. Authorized users are generally not held responsible for the deceased’s unpaid balances.
Here's what happens to your credit card debt when you die
So, basically your loved ones are safe unless you're joint. If you want to be super sure they're OK, it'd be smart to add beneficiaries and custodians to all of your stuff.
