How card debt liability changes after final parent dies

Responsibility isn't inherited; heirs shouldn't pay it off right away

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question Dear Sally,
If a last remaining parent has a terminal illness, and her credit card has a large balance due, who is responsible to pay after the parent dies? This is in the state of Florida. – Joy


Dear Joy,
After the last surviving parent dies, the credit card company cannot collect from anyone who isn't a co-owner on the account. Debt is not inheritable. You shouldn’t have to worry about the bank coming after you. The answer would be different if there was a surviving spouse, or if the couple lived in a community property state, but that's not the case here. 

That doesn’t mean survivors won’t get calls or letters from the credit card company or collection agencies trying to get the balance paid. Collectors, including banks, cable companies – even personal friends who think they are owed something – often try to get in line when someone dies.

It’s important to resist the urge to start paying bills after someone dies, either with the deceased person’s funds or your own. Someone who starts disbursing a deceased person's funds without going through the proper procedures could be liable if there’s not enough money to go around. If you use your own money to pay debts that don’t belong to you, you are likely to never see that money again. You shouldn’t pay for debts that are not legally yours.

If the credit card company contacts a survivor after the parent's death, the card company should be told she is deceased and that any disbursements from her estate will be made according to state law. Some creditors will request a death certificate to close out an account. Ask whether it needs to be a certified copy of the death certificate, or if a photocopy or scan is acceptable.

After a parent dies, her personal representative must follow the rules in the state of Florida to notify her creditors. A certain amount of time is allowed for creditors to send bills, and then your mother’s assets are used to pay bills in a certain order. Generally, final medical expenses, burial and administrative expenses are paid first. Secured debts, such as mortgages and car loans, are paid with the proceeds of the assets with which they are secured. For example, if she owned a car she was making payments on, the car is sold to pay off the car loan. Any excess money after the car loan is paid off goes to the estate.

Unsecured debt, such as credit card debt, is last in line to get paid. If there’s money left in the estate after the higher priority debts, it is used to satisfy creditors in full or in part. If there’s not enough money to go around, which is often the case, the credit card company and other creditors write off any remaining debt.

The only way credit card debt affects children is if they are expecting an inheritance. Her total debts may reduce the amount available to her heirs. Otherwise, her credit card balance should not be a concern during this very difficult time.

See related: What happens to credit card debt after death?, Feds sets rules for collectors calling on relatives of deceased debtors

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Updated: 01-21-2018