How credit card debt can live on after a person dies

For many folks across New Jersey, credit card expenses and bills are regular concerns. Many people struggle with building credit, maintaining monthly payments and the repercussions of missing these payments. Before they know it, people can become buried under credit card debt. The stress and anxiety related to owing this kind of money can make people feel as though their life is consumed with money troubles.

Other people, however, end up unexpectedly inheriting debt when someone passes away. Often, a person can be quite surprised to start getting calls from bill collectors seeking payment for another person’s debt. It is important to remember that in some situations, it is not necessary for certain people to absorb the debt.

In general, only those who are joint account holders of a credit card can be held liable for unpaid balances should the other account holder die. This can include parents who co-sign for a credit card for their child, business partners who have joint accounts and married couples. If a couple that shares an account get divorced, however, the rules can change. In some divorce settlements, spouses may choose to assign debt to one person or end up splitting the responsibility.

But there are also parties who are not required to cover credit card debts for another person. Authorized users of a card who are not joint account holders are not responsible for covering the debt if a debtor dies. Similarly, if an authorized user of a card dies and has amassed debt on the card, the primary cardholder is not responsible for that debt. Additionally, family members with no connection to the financial account likely have no obligation to take on the debt, either.

Bill collectors can be aggressive, persistent and ruthless when they are looking to collect money. Even if they know that a family member has no responsibility to cover the debt left by a loved one, they can still call them and pursue payment. After a death, people are vulnerable targets for collection agencies. For those who find themselves faced with the possibility of taking on a deceased person’s credit card debt, it can be crucial to speak with an attorney who understands the New Jersey state laws that apply to this area.

Source: Fox Business, “Don’t Get Stuck With Debt that Isn’t Yours,” Roman Shteyn, Nov. 29, 2012

Related Posts: CARD Act helping consumers avoid, understand credit card fees, Stats point to signs of improvement in U.S. credit card debt, Keeping debt solution options in perspective, Can understanding credit cards can help people avoid debt?

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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