What Happens to Your Credit Card Debt When You’re Gone?

What Happens to Your Credit Card Debt When You’re Gone

By Solid Serenity Legal Solutions

Almost 3 out of 4 consumers will die with debt, but where does that debt go? Will your family be responsible for your debt when you die?

When you die, your family will have to assess and distribute your estate. Your estate includes everything that you own- house, cars, bank accounts, investments, etc.-and all debts are settled out of these assets. The executor of the estate will settle debts from the estate, but your heirs could be left with little or no inheritance if your debts are high.

Family Members Are Not Personally Liable for Your Debts

Family members typically will not be responsible for paying off a relative’s debts with their personal assets, though there are some exceptions. A spouse or other family member may be responsible for debts if they: (1) co-sign for a credit card or loan, (2) jointly own property or a business, (3) are required by state law to pay a certain debt such as healthcare expenses, or (4) live in a community property state.


The debts that you incur while you are alive will be settled during probate. Probate is the legal process that distributes your estate as well as takes care of any residual debts when you don’t have a trust or other arrangements already in place to handle your estate.

A living trust is the best way to avoid probate since any assets in a living trust do not go through the court probate process. While keeping your assets in a trust does not necessarily keep them from creditors, it does give you more control as to how your assets will be distributed. It also gives your family time the power to immediately negotiate with creditors. The main advantage to a trust is it puts your Trustee in control of the assets instead of the court.

Talk to Your Family

Still, there are ways you can lessen the burden on your family when it comes to any debts you leave. An excellent way to lessen the burden on your family is to have conversations with your family regarding your debts. It can be difficult to discuss our financial situations with those we love, but when it comes to protecting your family in the case that something happens to you, it is important. You want your family to be aware of what you have so they can plan to address those debts.

It is also good to have conversations with your family regarding what is and is not their responsibility to pay. There are unfortunately some debt collectors who will contact family members even if they know those family members are not responsible to pay the debts. Make sure you keep organized files that your family can get to so they have access to this information. The biggest way to help your family in dealing with debt you might leave behind is to communicate with them.

If this is a concern for you for your estate, meeting with an estate planning attorney to discuss the best route forward for you can help you feel confident for how your heirs will be taken care of once you are gone. Call or email us today for help!

Learn more about Probate.

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