What Happens to Credit Card Debt When You Die: Get the Knowledge to Protect Your Assets

What happens to credit card debt when you die is a question that may seem difficult to answer. The last thing you want to do is leave your heirs with unwanted liability from unpaid credit card debt.

Here is the first thing to know – your creditors can’t pursue credit card debt payments after your death. However, never think that death is the ultimate solution to credit card debt relief. There are lots of other ways to get rid of credit card debt.

1. What To Do After a Cardholder’s Death

Here is what you need to do after the primary cardholder’s death. 1. Stop Using the Card 2. Make a List of the Outstanding Credit Card Accounts 3. Notify the Creditors and the Credit Bureaus

After your death, your assets are used to repay your credit card debt. Then, the remaining assets are distributed to your heirs. The executor of your estate takes care of all these things.

2. How the Creditors Are Paid Back

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

That means that your estate is insolvent. In this situation, your heirs may have to repay your credit card debt. However, it depends on several factors.

If you have a joint account holder, they may have to bear the credit card debt burden and repay it. When you apply jointly for a credit card, both of you agree to indemnify the outstanding credit card balance.

4. Assets You Cannot Use to Repay Creditors

Here are a few assets which the executor can’t use to repay the debt:    1. Life Insurance Proceeds 2. Brokerage Accounts 3. Retirement Accounts 4. Assets in a Living Trust

Swipe Up

for more finance, business, and real estate advice

Read More

Your 5 Step Guide to Getting Debt Relief Fast

What is Asset Protection Planning (and How Do You Achieve It)?