My spouse died.  Am I responsible for paying off the debt?

Credit card companies and debt collectors are not very sympathetic about your loss and will try to collect on an outstanding debt even if you are not legally obligated to pay!

It is important to understand what your financial obligations are beforehand so that you know what you could encounter should your spouse pass away.  It may be a good idea to contact an attorney that can advise you on the legal details concerning your particular circumstances.

4 VERY IMPORTANT QUESTIONS TO ANSWER:

1.  DO YOU LIVE IN A COMMUNITY PROPERTY STATE?

If you live in one of the following states, your property, assets and yes, debts are considered jointly owned:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

If your spouse had opened an unsecured credit card, store card or personal loan and you live in one of these community property states, you will be responsible for the debt.

HOWEVER...

In most cases, losing a spouse may mean loss of income and or retirement benefits and you may really be strapped financially.

You should be able to negotiate a reduced balance settlement of that account.

If you need help, please let us know as we have been helping people settle debts for many years!

2.  WHERE YOU A CO-SIGNER ON THE ACCOUNT?

If you were, you are responsible for the debt. However, you should be able to get the creditor to reduce the balance!

What if you are not sure if you were a co-signer? 

• Write a letter to the creditor briefly explaining that your spouse has died and that you do not feel you are responsible for the debt (unless you live in a community property state).

• Request proof, ie. a copy of the original application.

• If they cannot produce it, you are not responsible.

3.  WHERE YOU AN "AUTHORIZED USER ON THE ACCOUNT?

An authorized user is any person who has permission to use a credit card account, but is not responsible for paying the bill.

In that way, it differs from joint credit, in which both parties are obliged to pay. In some cases, the user will receive a credit card in his or her name, even though it is linked to someone else's account.

4.  DID YOUR SPOUSE HAVE ASSETS THAT MAY BE SUJBECT TO PROBATE?

The term "probate" refers to the legal process to determine if a will was valid.

If your spouse had a will, depending on the state's laws where you reside, there may be "probate" process before assets are distributed according to the will. In many cases, there is no probate process.

For example:

If you have a joint checking or savings account and your spouse dies, then now you are the sole owner or account holder.  It is a good idea to let the bank know.

If your spouse had a life insurance policy and you were the sole beneficiary, the funds are sent to you without going through the probate process.

The reason is that a life insurance policy is a contract and unless it was part of a special estate-planning situation, acts independently.

And by the way, the proceeds of the life insurance policy are TAX-FREE!

If your spouse dies and there is outstanding credit card or other debt, you may want to consult with an attorney or with a qualified Debt Management Company.

Don't let creditors intimidate you!  Know your rights!

If you need help, give us a call!

1-877-492-4109