What Happens to Credit Card Debt When You Die?


When you die, does your credit card debt go with you? The answer may surprise you.

Credit card debt does not instantly vanish upon death. The credit issuers don’t just walk away, they go after the funds through the estate of the deceased or any joint cardholders. Let’s take a look at how this process works and what the family can expect after losing a loved one with credit card debt.

Joint Cardholders Are Stuck With the Bill

If you open a credit card account with a joint cardholder, perhaps a spouse or business partner, the liability for all debt on that card rests on both cardholders. That is true even if the joint cardholder never used the account.

If you have a joint account with your spouse and pass away, your spouse is stuck with the debt. While this seems far from ideal to the family, that is exactly what you signed up for when opening the account. In some cases, even authorized users can be on the hook for debt from a credit card.

If you are an authorized user of a card from a parent or anyone else in poor health, it may be best to get yourself removed from the account just to be on the safe side. You don’t want a credit card company to come after you for debts you didn’t incur yourself!

Divorce Doesn’t Mean You Are off the Hook

Most divorce settlements focus on important topics like child custody and dividing assets, but credit card debt is an important part of any divorce, as well. Splitting up the liabilities ensures a fair, clear, and agreed upon result that is in the best interest of both parties.

But if two people shared a joint credit card and the account was not updated after the divorce, it could still list an ex-spouse on the account. It may also include children, new partners, and other authorized users. This makes the post-mortem credit card experience a nightmare for some families.

After a divorce, the best option is to completely close any joint accounts and remove your ex as an authorized user. Also, make sure you are removed from any accounts that your ex-spouse used as a primary cardholder. This helps to ensure you don’t get stuck paying bills for your ex if he or she passes away after a divorce.

The Estate Pays Debts Before Benefits

When someone passes away, all of their assets generally become a part of an estate. Even if the estate promises to pay each family member $100,000 in a last will and testament, that $100,000 payout doesn’t happen until after all debts and liabilities are paid by the estate.

If an estate leaves 4 beneficiaries $100,000 each, for example, but the person died with $100,000 of credit card debt, the credit card debt gets paid before the beneficiaries. That means the beneficiaries may only get $75,000 each, as the $100,000 credit card bill is paid first.


Sometimes this requires selling real estate, losing a vehicle through seizure, or other unpleasantness. In some cases, credit card companies may even try to go after adult children and other relatives to recoup their losses.

If you have any doubt about this process, your best option is to work with a qualified estate attorney who can guide you and other beneficiaries through the process.

Staying Debt-Free Makes It Easier for Everyone

Death is an unfortunate reality that we all have to deal with from time to time, but the process of managing an estate and other financial aspects after losing a loved one does not have to be miserable or difficult.

With the right planning, managing an estate can be a fairly simple process. But it is even easier if the deceased did not leave any outstanding debt for their beneficiaries to deal with in their absence.

So, what happens to credit card debt when you die? If there is any way to collect, the credit card companies will chase the opportunity. But if you can pay off those debts before saying goodbye, things will be much easier on those you leave behind.

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