Death announcements serve notice to creditors
Clock starts ticking on their ability to file claims against an estate
Let's Talk Credit
Dear Let's Talk Credit,
My brother has been diagnosed with a terminal illness with only months or less to live. I am going through his bills and there are credit card bills that have overdue notices. I do not have access to his banking accounts to withdraw money. He is no longer collecting a paycheck from work. What should I do? Do these unsecured credit balances die with him? -- Jake
I am so sorry to hear about your brother. This is not the time for either of you to be worried about credit card bills. But, to alleviate your concerns, I am happy to answer your questions.
Generally speaking, when a person dies, the will is usually probated in a state court. A death announcement in the newspaper serves as the notice to creditors that the person is deceased, and the creditor has a certain time period to file a claim against the estate.
State laws vary on the order of how creditors are paid, but unsecured debts are typically at the bottom of the list. If your brother does not have a will, he might consider drafting one. Having a will makes it easier for him to be assured that his wishes concerning his property and assets will be honored.
As long as your brother is the only responsible party included on the accounts, with no joint owner, no other person is responsible for paying the debts. If your brother does not have any or enough assets included in an estate after his death, the credit card issuers will not be paid.
Whoever takes on the responsibility for the actions required after death will need to send certified copies of the death certificate to your brother's creditors, along with a letter stating his name and credit card account number.
Should creditors call trying to collect before or after your brother's death, do not promise to pay anything. If the will is being probated, you can provide the creditor that information. Otherwise, let the creditor know that you will have to get back with them at a later time.
I hope this information is helpful. Let's keep talking!
See related: What happens to credit card debt after death, How to handle collection calls for a dead person's debt, Law compels speedy estate settlement for debt after death
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Published: December 5, 2013