In a nutshell: In most cases, spouses are not responsible for paying off the debt of a deceased person. Instead, the deceased’s estate pays off any debt owed, including credit card debt. However, you may be responsible if you cosigned or were a joint account holder.
Sorting through financial matters after the death of a spouse can be challenging. The last thing you want to do is stress about debt or think about forging a new credit life of your own. But understanding these issues and taking the steps to resolve your spouse’s financial matters are important issues to handle quickly and efficiently. Discover more about credit card debt after the death of a spouse and other relevant financial matters below.
Tip: When you're dealing with debts after a spouse has passed away, the law can get a bit complicated. You may want to speak to an estate lawyer or other professional to help you sort everything out.
Different types of debt are handled differently after a death. We’ll cover credit card debt, loan debt, and medical debt here.
In most cases, no person is held responsible for someone else's debt after they pass away, according to the Consumer Financial Protection Bureau. That's true whether you're a spouse, adult child, sibling, or other relation, and it's true for credit card debt as well as other types of debt.
There are a few circumstances where you may be required to pay your deceased spouse’s credit card debt:
The CARD Act of 2009 requires credit card issuers to notify the executor of an estate if any balance is due. The issuer cannot add fees or penalties to the account while the estate is being settled.
According to the CFPB, you would not be responsible for your spouse's auto, personal, student, or mortgage loans either. However, the CFPB does note that there are some exceptions that would make a spouse potentially responsible for debt.
Here are some of the most common exceptions:
Medical debt is a little different from other types of debt. In most states, the “doctrine of necessaries” may apply to your spouse’s medical debt. This simply means that the provision of medically necessary care by a hospital to your spouse creates an implied contract. Or, more simply, it's an implied agreement that you're going to pay for those services. Due to that agreement, you may be held responsible for those costs.
Additionally, if you've signed any type of guarantee or contract agreeing to pay for medical debt, you may be obligated to do so even after the death of your spouse. The next of kin may be asked to sign such documents if the patient is unable to do so themself.
Debt that your spouse was solely responsible for is only owned by their estate. When someone passes away, their assets are held in estate. Those assets are used to pay off their debts. Then, the remaining assets are distributed to beneficiaries according to state estate law and any will or other legal document the deceased left.
Estate law can be complex and varies by state, so if you have concerns, it's a good idea to consult a lawyer. You can work with the attorney who prepared the estate documents originally. You can also choose a new lawyer for probate. Probate is the legal process of handling the estate.
During probate, certain assets of the estate are converted to cash and used to pay off debts. Creditors must make a valid claim against the estate before they can be paid, and how long they have to do that depends on the state. It can range from months to years.
It's possible that an estate may not have enough value to pay all outstanding debts. In that case, the estate must follow prioritization. While state laws vary, most prioritize debts roughly in this order:
Once the estate money runs out, creditors simply do not get paid. Unless an exception—such as those listed above—is present, the spouse does not owe any debts the estate could not pay for.
Only assets that enter probate can typically be used to pay for debts owed by the deceased. Whether or not an asset enters probate depends on state law and how the accounts or assets are set up.
When an asset skips probate, ownership of the asset is transferred immediately to the documented beneficiary. All you typically need for this process is a death certificate. Some examples of assets that commonly skip probate and might not be used to pay off a spouse's debt can include:
Debts don't just disappear after someone dies, and collectors may attempt to collect on those debts. However, as the spouse of the deceased, you have rights. Here are some facts about what creditors can and can't do—and what you can do to stop them calling—from the Federal Trade Commission.
You might also dispute the debt by sending a debt validation letter. This requires that the creditor provide documents that demonstrate the debt is valid. However, because whether or not you owe these debts can get complicated, especially depending on your state, you might want to consult with an attorney first.
Debts aren’t the only financial considerations after your spouse passes away. Here are a few other steps you might want to take—with the help of a lawyer or professional—to make sure your finances are protected.
Managing financial matters, including the settlement of debts, can be time consuming and frustrating—especially during such an emotional time. It's important to prepare and protect yourself by reviewing the facts and learning about your rights. Discussing the details with a legal professional is always a good idea.