Legal, Regulatory, and Privacy Issues

Law compels speedy estate settlement for card debt


A little-noticed provision of the Credit CARD Act of 2009 makes it easier for the estate’s administrator to settle the account in a timely fashion.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Many people have horror stories to tell of being harassed over outstanding credit card debts after a loved one dies. But a little-noticed provision of the Credit Card Act of 2009 makes it easier for an estate’s administrator to settle the account in a timely fashion.

Credit card law compels speedy estate settlement for debt after death

The Credit CARD Act of 2009 includes language intended to relieve a burden on those administering the estate of someone who has passed away. It requires speedy settlement of credit card debt and limiting fees and penalties.

The final rules implementing the law state: “(I)f the administrator pays the balance stated by the issuer in full within 30 days, the issuer must waive any additional interest charges … (T)he final rule retains the proposed prohibition on the imposition of additional fees so that the account is not, for example, assessed late payment fees or annual fees while the administrator is settling the estate.”

“I think it’s going to take a lot of pressure off loved ones. The balance is not going to spiral into the stratosphere after someone is deceased,” says Bruce McClary, spokesman for ClearPoint Financial Solutions, which offers credit counseling.

Under the law, when the estate administrator requests the credit card balance, the issuer is required to provide it in a timely manner. In the interim, the meter can’t keep running, so no late fees or annual fees can be imposed as the administrator is settling the account.

David Thompson, a member in the law firm of McGlinchey Stafford in Cleveland, who represents many credit card issuers, says the issuers have 30 days to respond to the balance request. If the administrator pays off the debt within 30 days, no interest charges will be imposed.

With the new law, “you can just cut a check and call it a day,” without haggling over interest charges, says Jordan Lee, an associate with the law firm Shutts & Bowen in Tampa, Fla.

Card issuer may be out of luck

Just because there’s a credit card balance when your loved one dies, it doesn’t necessarily mean you’re liable for footing the bill.

If the credit card is solely in the name of the deceased, it’s up to the estate to pay the bill, following the laws in the deceased’s home state. If the estate passes through probate, the executor, following state law, will determine what bills should be paid in what order. Because credit card debt is unsecured debt, those trying to collect it usually stand in the back of the line of creditors, behind those with a claim on the estate’s collateral.

If the estate’s assets don’t cover all the bills, the credit card company can be out of luck. For example, if the issuer is owed $20,000 and assets total $5,000, “the credit card company can’t keep pushing for more once the estate is tapped out,” McClary says.

But things change if it’s a joint credit card account or you live in a community property state.

If it’s a joint credit card — say, for a husband and wife, or even a parent and child — a credit card company “is fully within its rights to pursue the full balance with the survivor,” McClary says.

It’s a different story if someone is simply an authorized user on a credit card account. While the credit card company has no right to go after an authorized user in most states, it doesn’t mean they don’t try, says Scott Crawford, chief executive officer of DebtGoal, a company that helps consumers get out of debt faster. It’s not unusual for DebtGoal clients who are authorized credit card users to complain about issuers coming after them, trying to collect the debt.

The rules are different in community property states, where assets and debts accumulated during marriage are considered joint property. In some states, debts are as well. Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are community property states.

Some companies take it even further. Jennifer Harkins Garone, as well as her 96-year-old grandmother, received collection calls from credit card companies after her 62-year-old mother died of leukemia in 2007. Her mother was more than $70,000 in debt, with most of it owed to credit card companies.

Collectors were ‘relentless’

Although the accounts were solely in her mother’s name, “the credit card companies were just relentless,” Garone says.


  1. Keep all important documents, including copies of wills, bank account numbers, credit card statements and similar information, in one place, and tell two adults where it is located. “The last thing loved ones need to do is go on a scavenger hunt,” says Carole Brody Fleet, author of “Widows Wear Stilettos.”
  2. Because credit card statements are sent to a person’s last known address, make sure someone has access to your mail.
  3. Have a recent copy of your credit report among your important papers. Because it’s a fairly accurate representation of all you owe, it will spare others of sifting through paperwork trying to find credit card bills.


“I was fortunate that I knew the rules,” says Garone, who was privacy and security leader at GE Money.

Sometimes there are surprises for survivors, such as discovering that their loved one had a secret credit card, Crawford says. In these cases, “spouses have no idea what the other is doing.” If you live in a community property state, you may be saddled with those debts.

For an executor trying to settle an estate, creditors will first request a copy of your loved one’s death certificate.

Those who have power of attorney may think that will help ease the process along. But Lee warns that power of attorney “only works when the person is alive. After they die, it has no effect,” and the credit card issuers have no obligation to talk to those with power of attorney, unless they are also the executor of the estate.

Carole Brody Fleet, author of “Widows Wear Stilettos,” and who was widowed at age 40, says it’s imperative to notify credit card issuers immediately after a loved one dies, particularly because some people peruse the obituaries seeking targets for identity theft.

Notifying the issuer will prevent anyone from running up new charges on the account. If you’re a co-signer, the credit card company will close the account and open a new card just in your name, she says.

For co-signers or those who live in a community property state and can’t afford to pay the entire balance on the account, McClary recommends going to an accredited nonprofit credit counseling agency for advice. That can help you get an accurate picture of your financial situation and sort out your options, particularly if the person who died was the sole breadwinner or contributed greatly to the family budget. Then talk to the credit card issuer about your ability to repay the debt. “Do it with a clear sense of where you stand financially.”

See related:Guide to the Credit CARD Act of 2009, What happens to credit card debt after a death, How to handle debt collection calls for a dead person’s debt

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Legal, Regulatory, and Privacy Issues

What to ask before getting a lawsuit settlement loan

You may have seen the ads on TV — “Cash for injury and employment cases!” These lawsuit loans should be a choice of last resort. But if you’re considering one, asking yourself these key questions first can help keep your costs down.

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more