What Happens to Credit Card Debt After Death

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By: Bill Henry
PublishedJul 30, 2021
2 minute read

When a person dies, some of their debts must be repaid. Robinson & Henry Probate Attorney discusses whether a spouse is generally responsible for their partner’s credit card debt after death.

Questions About Credit Card Debt After Debt?

If you have questions about a probate matter, set up a case assessment with one of our probate attorneys when you call 303-688-0944.

Who’s Responsible for Credit Card Debt After Death

Whether someone’s death is anticipated or completely unexpected, there are often financial elements that arise that you might not expect.

What happens to credit card debt after death? Is a surviving spouse personally liable for a deceased partner’s credit card debt? The short answer here is generally no.

Whose Name is on the Card?

A credit card company cannot come after a surviving spouse for debt that belonged only to the person who died. In other words, if the debt was incurred by Joe Jones on a credit card solely in his name, his wife cannot be held responsible for repaying the debt. But there is an exception which we’ll get to.

Credit Card Debt is Like Any Other Debt

It’s important to inform a credit card company when a cardholder dies. In Colorado, credit card debt after death is generally treated like any other debt of the person who passed away.

How Much Debt?

Sometimes the amount owed is so small that it’s not worth a credit card company’s time or money to try to collect it. Now, if there is a significant amount of debt, the credit card company is required to submit a claim to a decedent’s estate for any unpaid debt. Those claims are paid in an order and manner determined by Colorado law.

No Money in the Estate?

If an estate runs out of money, which is called becoming insolvent, any debts that are unpaid are generally dropped and the spouse is not personally liable for any credit card debt after death.

Surviving Spouse Allowance

A spouse may be able to take money out of a decedent’s estate before any creditor claims are paid. The law permits a spouse to collect at least some money from the estate. That money is called an allowance.

Types of Allowances

In Colorado, there are two general types of allowance. There’s a family allowance and there’s an exempt property allowance. These protect a spouse or dependent child from suffering a financial hardship if a debt is recovered.

The state of Colorado sets the maximum allowance each year.

The Exception 

While a surviving spouse is generally not responsible for credit card debt after death, there is an exception.

An estate’s personal representative, say someone with a durable power of attorney, can be held liable for a decedent’s debt if they do not administer the estate and pay creditor claims according to state law.

A durable power of attorney can oversee financial decisions for someone who was incapacitated through illness or accident. A power of attorney allows someone to pay bills, cash checks, access bank accounts, and make other financial decisions on behalf of someone else.

So, if a surviving spouse is the personal representative for their deceased partner’s estate and they’ve incorrectly handled a claim to a credit card company, they could be personally liable for that debt.

Ask For Help

You should not feel ashamed or embarrassed if you don’t understand probate and estate planning laws. Attorneys spend years studying those laws and they can help you.

If you plan to be a personal representative for a spouse’s estate or anyone else’s, it’s a good idea to first consult an attorney. You could be personally liable for any mistakes that you make in the administration of that estate.

Contact a Probate Attorney

At Robinson & Henry, we provide potential clients a 30-minute consultation so you can sit down with a lawyer, discuss the facts of your case, and decide how you should proceed. Sometimes all you need is a little advice. Call 303-688-0944 to begin your case assessment.

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