Credit cards and the death of a holder

Michigan residents dealing with the aftermath of a loved one’s death might have to deal with unpaid debts on credit cards. When someone who was the sole account holder dies, then the creditor could make a claim for the debt upon the estate. Surviving family members would not be obligated to pay except for surviving spouses in community property states.

For someone who had been an authorized user of a dead person’s credit card, the debt does not transfer to the surviving user. The death of the account holder, however, rescinds the charging privileges of any authorized users. An attorney recommended that people check account terms to confirm that the card company imposed no liabilities upon authorized users.

A person who held a credit card account jointly with the decedent would immediately become responsible for payments. The law views a jointly held debt as the total responsibility of either party at all times. A co-signer on an account would face the same liability. When a death inflicts financial hardship on a survivor, a person responsible for a debt could check to see if the lender has a hardship program. A call to the creditor could result in a payment plan that fits the person’s budget.

Any person struggling with unpaid bills after an unexpected life change could talk to an attorney about strategies for debt management. Depending on the severity of the situation, an attorney might suggest a bankruptcy filing. The two principal forms of consumer bankruptcy are Chapter 7 and Chapter 13, and the attorney can explain the differences as well as the applicable eligibility requirements.