What happens to card debt when someone dies?

By Peter Andrew

For Index Credit Cards

Published: Friday, July 18 2014 2:15 p.m. MDT

Absent those, it's highly likely that the general rule applies: You are not liable for debts owed by other people — dead or alive. Some unscrupulous creditors — especially rogue collection agencies — may try to persuade you the opposite is true. Tell them, politely, to get lost.

When collectors call

It's fine to tell collectors to get lost if they're lying to you or trying to emotionally blackmail you into paying a debt that isn't yours. But they're legally entitled to call you just one time to find out who's responsible for settling the estate. You should provide them with the name, phone number and address of the executor/personal representative or administrator.

Unless you are that person or the deceased's spouse (or, in the most tragic cases of all, the parent of a deceased minor child), the Fair Debt Collection Practices Act bars collectors and creditors from discussing with you or anyone else any details of any of the estate's debts. The Federal Trade Commission says you should report breaches of this law to your state attorney general through naag.org.

Some practical tips

Soon after a loved one's departure, few of us are capable of focusing on financial matters. But executors and administrators can take some steps that might ultimately help those who stand to benefit from the estate:

  1. Negotiate with creditors. Some may settle for significantly less than the full amount owed.
  2. Find out whether credit card and other accounts came with optional insurance that settles balances on death.
  3. Notify credit card companies about the death, including the date on which it occurred. Cut up each card and enclose it with the letter to the relevant issuer.
  4. Also inform the Big Three credit bureaus Equifax, Experian and TransUnion of the death and its date.

Nothing can make up for the loss that a bereavement brings. But understanding where you stand financially can relieve some unnecessary stress at a most difficult time.

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