Credit card debt after a spouse dies: who is responsible?

How estate debts and personal liability differ, and why you should check before using your own money to repay a deceased partner’s credit card.

What Happens to Debt When You Die? 

When a person dies, their debts become a liability on their estate. The executor of the estate is then responsible for paying off any debts that the person had left behind with their estate.

If no Will has been written, then the administrator will be responsible for paying off the debt from the estate. 

An executor or administrator normally pays valid estate debts from estate assets, not personal funds. However, mishandling an estate can create personal liability. Get professional probate advice before distributing assets or paying selected creditors if the estate may be insolvent.

If the estate is not sufficient to pay off the debts completely, they are most likely written off. 

Credit card debt is an example of individual debt. Secured and unsecured debts can both be an example of individual debt. 

In most cases, the civil partner or spouse is not required to pay off the individual debt. This is generally the case unless you have made a personal guarantee to the creditor that you will pay off the debt out of your own pocket. 

To reiterate, if your partner passed away with an outstanding balance on their credit card, you will not be required to pay off this debt. If you are unsure, you can contact a debt charity for some advice.

This is still the case even if you were an additional cardholder for the credit card. Only the primary cardholder is liable for the outstanding balance on a credit card.

Just like other debts, the credit card debt of your deceased partner will be taken care of using their estate. If this money is not sufficient, then the debt will most likely be written off. 

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How Do I Pay It Off After They have Passed Away?

Notify the credit card provider of the death and ask its bereavement team for the balance and required documents. Give details of the executor or administrator, and ask how payments, interest and correspondence will be handled. Do not use the deceased person’s card.

Check whether any insurance was intended to repay the borrowing. The destination of a life-insurance payment depends on the policy, any trust and the ownership arrangements; it is not always paid outside the estate. Do not assume a payment received personally must be used for a debt for which you are not liable.

If the estate cannot pay all debts, obtain probate or insolvency advice before paying creditors or distributing assets. An insolvent estate has legal priorities that are not simply the same as a living person’s household budget. See MoneyHelper’s guide.

Joint Debts

An additional cardholder is normally not liable for the primary cardholder’s personal credit card balance just because they used an additional card. Check the actual agreement and any separate guarantee.

For genuinely joint borrowing, the surviving borrower will usually remain liable for the full outstanding amount under joint-and-several liability. The estate may also have a liability. Ask the creditor to explain the agreement and seek advice before assuming a debt has simply transferred or will be forgiven.

What Happens If I Don’t Pay?

We’ve all wondered – what exactly will happen if you stop paying off your credit card debt? Well, the answer is a whole lot of bother.

1. Your creditor will send you reminders and then demands that you pay any missed payments
2. If you don’t pay, your account will default
3. If you still don’t pay your debts, your creditor can choose to sell your debt to a debt collection agency or employ an agency to chase you for the missed payments. 

If you don’t pay the collectors, your creditor or the collection agency might be able to take legal action against you to get their money back. Legal action usually starts with a CCJ.

But remember that the above will only happen if the debt is yours or a joint debt that you shared with your spouse when they were alive.

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Natasha

Very helpful and informative thank you

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Is it a Good Idea to Go to an Advisor for Help?

Free debt advice can help identify which debts are yours and what payments are affordable. Estate administration may also need a probate solicitor, particularly where assets are jointly owned, a guarantee exists or the estate is insolvent. Check the scope and any fees before engaging a service.