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My dead husband’s card debt is hurting my credit score. What can I do?

Chances are it’s a credit reporting error, or you’ve been misinformed about your score

Summary

If you live in a “community property” state, you may be obligated to pay off debts your late spouse incurred during the marriage. However, a deceased person’s leftover card balances should not be appearing on his or her spouse’s credit report. If they do, the surviving spouse should contact the card company or file a dispute with the credit bureaus.

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Dear Keeping Score,

My husband and I have two separate Chase Visa card accounts. He passed away a year and a half ago and left $11,000 on his balance. I was told I wasn’t responsible for that debt.

I’m on my own now and my only income is widows’ benefits. I just went to refinance my house yesterday and found out that Chase has attached to my credit account my husband’s debt. I have never received any correspondence from Chase in regards to this matter.

What is the law and my obligation to pay his debt? And, what do I need to do? They’ve ruined my credit. Two months ago my credit score was 805. Now the refinance company says it’s 735! – Sandra

Check out all the answers from our credit card experts.

Ask Steve a question.

Dear Sandra,

I am so sorry for your loss. It is hard enough going through the death of a loved one without having to deal with financial issues. And yet, here you are. Let’s see if we can make some sense of it all.

You mentioned that the refinance company told you your score was 735, not that you checked your score on your own. Mistakes can happen with any third party, so I urge you to check your score from all three bureaus on your own to verify where you stand.

You can get a copy of your credit reports for free at AnnualCreditReport.com. You may also have access to free scores from your credit card as some providers offer that benefit – including Chase.

I reached out to Chase to ask what their policy is regarding unsecured credit card accounts of a deceased customer. They told me “credit card balances do not transfer from customers upon death” and that they would be “happy to look into this particular customer’s situation.” Contact the Chase Estates team at (877) 658-5560. Hopefully, this will resolve your situation.

If the debt is showing up on your credit report, it may just be a simple reporting error. Contact each credit bureau and dispute the debt. They’ll tell you how. Once it is verified that the debt was just in your husband’s name, it should come off your credit report. As always, keep records of any correspondence and promises.

See related:  What happens to credit card debt after death

Fate of deceased spouse’s debt depends on your home state

For my other readers, let me give you some valuable background information about debts of deceased spouses. A lot depends on the state in which you live. Some states are community property states and others are not.

The concept of community property derives from old Spanish colonial law and is most often found in western states. The rest of the country had most of its legal roots from English common law.

Currently, there are nine and three-quarters states that fall into the community property category. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska has an opt-in provision, so I count it as a half. Puerto Rico has community property laws, but it isn’t a state (yet), so I count it as a quarter.

So, depending on the state in which you live and its specific laws governing community property, you may be obligated to use any community property assets to satisfy a debt. Community property is generally defined as any money earned by either party during the marriage or partnership and any property bought with those earnings. Debts incurred during that time also apply.

When a person passes away it’s important to notify any creditors in a reasonable time frame. You will likely need to supply them with a certified copy of the death certificate. If you are not a resident of a community property state, that should take care of some of the debts.

Some creditors are not a forgiving as Chase and if there are assets in the estate, they will want to be paid from the estate. This is a job for the executor of the estate or its attorney.

See related:  6 steps to take when a credit card holder dies

Despite the big score drop, your credit is not ruined

I also want you to know that while taking a 70-point dip in your score is distressing, I wouldn’t say your credit has been ruined. If your refinance company told you this, you may want to look for a new lender.

A score of 735 is considered good, and nowhere near ruined. In a tight lending environment, it could move you to a slightly lower tier for refinancing, but I checked refi’s at Bankrate and saw no difference in rates between 735 and a higher score.

A bit of free advice: Some people get distressed about having less-than-perfect credit. From a scoring perspective, this pursuit of perfection can drive anyone mad.

I espouse a theory of “good enough” credit. As long as your credit is good enough to allow you to do what you want or need and get you affordable rates on credit, it’s good enough. Chances are you’re not perfect (don’t tell your mother), so don’t expect your credit score to be perfect either.

Remember to keep track of your score!

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