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 CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.
Dear To Her Credit,
My father always gave me permission to use his credit card, even though he was not always with me when I went to the store. He recently passed away and of course I have not used his credit card since he died.
When I went to the bank to close out all of his accounts, I was going to make a payment on the credit card, but I was told by more than one teller in the bank that I need not worry about it. They said the debt would be written off. These tellers knew my dad and me, because we were in the bank weekly. I do not believe they would lie to me.
What will the bank do to me? — Debby
You’ve done nothing wrong, and you have no need to worry about the bank or what they will do to you.
When your father was alive and gave you permission to use his card, assuming you were not a joint account holder, you could use the card without being responsible for paying the balance. After your father died, the card became invalid. You did the right thing by stopping use of the card as of that date.
Family members are not responsible for each other’s credit card debts after death — even family members who made some purchases on the card.
If it makes you feel better, the chances are good that the bank will receive payment on the balance. Unless your father has more debts than assets, his estate will pay the bill. The procedures vary, depending on factors such as the state he lived in and the size of his estate, but the creditors will have a chance to submit their claims to the estate before it is settled.
If there is money in the estate, it will be used to pay bills according to state law. Generally, final expenses are paid first, then certain items such as taxes and child support. The remaining money is used to pay general creditors. If there is anything left over, it goes to the deceased person’s heirs according to the person’s will or state law.
Some assets such as IRAs and 401(k) plans don’t go through the estate and are not used to pay creditors.
If you have an inheritance coming from your father, it may be reduced by the balance on your father’s credit card. In an indirect way, you could say you are paying the credit card bill — through the estate.
When someone dies, it’s very important to follow the laws in your state to the letter. For example, don’t start paying your father’s bills. I also recommend that you don’t make promises to creditors or give them information other than your father’s date of death. Some of the procedures seem counterintuitive or like too much trouble, but they are there to protect you and everyone else. As long as the estate is settled according to the rules, you have nothing to worry about regarding your father’s credit card account.
See related:What happens to credit card debt after death?
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