Credit Card Debt That Outlives Mom

Credit card debt among the elderly is on the rise. What happens when borrowers die? Do they take their credit card balances to the grave, or are those left behind responsible for the debt?

Experts say that unlike a mortgage or a car loan, credit card debt is unsecured, meaning that it isn’t tethered to an asset. When someone dies, credit card companies have to wait near the back of the line to receive payment. If what’s left over after settling the estate isn’t enough to pay the bill, credit card debt is written off.

You only “inherit” credit card debt if you co-signed the card. (If one owner of a joint credit card dies, the others automatically become responsible for the balance due.) And, be wary of collection agencies that try to convince you that you are responsible for payment on a card owned solely by a deceased parent.

Consider being pre-emptive. After the death of a parent, send a letter or call the banks and credit card companies to cancel cards and let them know that the cardholder has died. Tell them that you are in the process of settling the estate and will keep them posted on your progress.