What Happens to Credit Card Debt When You Die?

It's a scary thought: What happens to credit card debt when someone dies? Does it fall on their kids? Their spouse? Their parents?

So, whether you're worried about leaving debt behind or dealing with a loved one's debt after they die, let's break down who could be responsible, what creditors can collect, and what you should do next.

Who Is Legally Responsible for Credit Card Debt After Death?

The deceased person's estate is usually responsible for paying their credit card debt—not their family. But there are exceptions, including joint account holders and, in some cases, surviving spouses in states that have community property laws. Here's how the responsibility breaks down:

The deceased person's estate pays first.

Like with most debt after death, if someone dies with credit card debt, the remaining balance is paid out of their estate. An estate includes everything they owned—bank accounts, vehicles, real estate and personal belongings.

The executor (someone chosen to represent the deceased's wishes) handles the probate process. This is when the deceased's taxes and debts get paid, as well as when property and possessions are given to the people listed in their will (aka their beneficiaries).

During probate, the executor will use the deceased's estate to pay off their creditors (whoever they owe money to). If a person's estate does not have enough cash to cover all their debts, the executor may have to sell that person's assets to settle with the creditors (this is called liquidation).

Assets that list a beneficiary in a document other than the will (like life insurance policies, retirement accounts or living trusts) don't have to go through the probate process. But everything else is fair game—even if it's listed in a will. So if you were planning on passing down your vintage car or signed guitar, just know a creditor could get their hands on it before your kids do.

What Creditors Can—and Can't—Touch

Here's some good news: Creditors don't automatically get everything.

Certain assets are typically protected when someone passes away, especially if they have a named beneficiary. These often include:

• Retirement accounts like 401(k)s, 403(b)s, SEP IRAs, SIMPLE IRAs and Roth IRAs
• Life insurance payouts
• Assets held in a living trust
• Brokerage accounts with designated beneficiaries
• Homes (depending on how the property is titled and your state's laws)

When a beneficiary is listed, those assets usually pass directly to that person—not through probate—and creditors generally can't touch them.

A joint account holder may be responsible.

If the credit card has a joint account holder listed, that person automatically becomes responsible for keeping up with the payments and any debt associated with the card. (This does not include authorized card users though.)

So, if the credit card was only in the deceased person's name, family members generally don't inherit that debt just because they're related to them.

This is your reminder to never cosign for someone else or ask someone to cosign for you! Because if the person can't pay (whether they're dead or alive), you could get stuck paying for their debt. It's messy all the way around.

Joint Account Holders vs. Authorized Users

A joint account holder is legally responsible for the credit card debt, while an authorized user typically isn't. They may both have cards with their names on them, but that's about where the similarity ends.

A joint account holder is someone who applied for the card and agreed to be equally responsible for the account. If one person dies, the other still owes the debt. That responsibility doesn't disappear.

An authorized user, on the other hand, was simply given permission to use the card. They didn't sign the credit agreement, so they're usually not responsible for the debt after the primary cardholder passes away.

Are Spouses Responsible for Credit Card Debt in Community Property States?

They can be. In a community property state, spouses generally share responsibility for the money, property and debt from their marriage—even if only one person's name is on the account. That means a surviving spouse may be responsible for certain credit card debt their spouse took on during the marriage.

Community property states include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska also allows couples to opt in to a community property arrangement.

But the exact rules vary by state and by the type of debt. So, if your spouse dies with credit card debt and you live in a community property state, don't assume you're responsible—or that you're off the hook. Talk with an estate attorney who knows your state's laws before paying anything.

What Happens if an Estate Cannot Pay the Credit Card Debt?

If an estate doesn't have enough money to pay all its debts, credit card debt may go unpaid. Family members generally don't have to cover the difference out of their own pockets unless they're otherwise legally responsible for the debt.

That's because credit card debt is unsecured debt, meaning there's no collateral (something the lender can take if you don't pay) like there is for a car loan or a mortgage. But that doesn't mean you should rack up a bunch of credit card debt! Any debt you die with can eat away at whatever you hope to leave behind for your loved ones.

Plus, with an average interest rate of 22.15% on accounts carrying a balance, credit card debt is stealing from you every day!¹ You can't afford to carry that debt for the rest of your life.

What Should You Do if a Loved One Dies With Credit Card Debt?

If a loved one dies with credit card debt, stop using their cards, gather their account information, notify the card issuers and credit bureaus, and let the executor handle debts through the estate. And don't start paying a debt out of your own pocket unless you know you're legally responsible for it.

Losing someone you love is hard enough. The paperwork that follows shouldn't make it worse. If you're handling their finances and discover credit card debt, don't panic. Take it one step at a time.

1. Stop using their credit cards.

Stop using any cards tied to the deceased person's account. Authorized users generally aren't responsible for the debt, but they also shouldn't continue making purchases on the account after the primary cardholder dies.

2. Make a list of accounts.

Gather statements, check online accounts, and go through the mail to track down all the accounts in your loved one's name. If needed, the executor or surviving spouse can request a credit report to identify open accounts.

3. Call the card issuers.

Notify each credit card company of the death and ask what documentation they need. If the card was in their name only, close it. If it's a joint account, the surviving cardholder can decide whether to keep or close it.

4. Notify the credit bureaus.

Contact Equifax, Experian and TransUnion to report the death. This helps prevent identity theft because fraudsters sometimes target estates. (How rotten is that?)

5. Keep up with joint payments.

If you're a joint account holder, continue making at least the minimum payments while the estate is settled. If you're just an authorized user, you're not responsible, so don't start paying.

6. Understand your state's laws.

In community property states, a surviving spouse may be responsible for debts from the marriage. If you're unsure, talk with an estate attorney for clarity.

7. Make a plan if you're responsible.

If you're a joint account holder or legally responsible under your state's laws, own it and make a plan to pay it off as quickly as possible. Get on a budget and attack the balance so it doesn't hang over your head any longer than it has to.

But don’t assume you’re responsible for a loved one’s debt just because a creditor contacts you. Blake from THE Ramsey Baby Steps Community Facebook group saw this firsthand after his father-in-law died. He shared:

“The creditors will do everything they can to make you BELIEVE you're responsible! When my father-in-law died, his credit card companies called my wife and offered for her to ‘settle’ his accounts at a discount.”

So, before you agree to pay anything, make sure the debt is actually your responsibility.

How Do You Track Down Outstanding Credit Card Debts?

Start by gathering the deceased person's financial records and identifying accounts in their name. The executor can also request a credit report, which can help uncover open credit accounts you might otherwise miss.

Here are a few steps to help you track down any outstanding debt:

• Request a credit report. The executor or spouse can pull one to see most open accounts.
• Check the mail. Bills and statements often reveal what's still active.
• Review financial records. Bank statements and tax returns can point to recurring payments.
• Talk with the executor. They're responsible for identifying and settling debts.
• Search secure storage. Check filing cabinets, safes or deposit boxes for account paperwork.

With a bit of detective work, you can get a clear picture of what debts (if any) still need to be handled after someone's passing.

How Do You Get Rid of Credit Card Debt for Good?

You get rid of credit card debt by stopping new charges, getting on a budget, and attacking what you owe with the debt snowball. You don't have to live with credit card debt for the rest of your life—so let's get to work.

Break up with your credit cards.

You can't solve a problem while continuing to create it. It's time to stop borrowing money and say goodbye to credit cards for good. That means cutting up your cards so you can no longer use them. Yep, every last one.

But how will I pay for things? With cash or a debit card (aka money you actually have in your bank account). That may sound scary right now (especially if you've been relying on credit for a while), but you will survive without a credit card. In fact, you'll thrive! Because let's face it: Credit cards haven't done you any favors. They're not a safety net—they're a debt trap. And you're better off without them.

Also, watch out for “quick fixes” for your credit card debt—things like balance transfers, debt consolidation or other types of loans. All they do is trade one debt for another and make your problem way worse. The only way out is to attack your credit card debt head on.

Get on a budget.

A budget helps you cover your expenses without reaching for a credit card—and it helps you find extra money to throw at your debt. It’s a total game changer (in a good way).

When you have a plan for your money, you can make sure your basic expenses are covered so you don't have to borrow money to get through the month. Plus, you'll see where you can cut back and free up more money for your debt.

If credit card debt has you feeling out of control, a budget will help you take control.

And if you need some help getting started, our EveryDollar budgeting app makes it easy to create a budget, see where your money's going, and find extra cash to throw at your debt.

Use the debt snowball.

The debt snowball helps you pay off debt by attacking your balances from smallest to largest, regardless of interest rate. And those quick wins give you momentum to keep going until every debt is gone.

Start by listing all your debts from smallest to largest (including any other debt you may have, like student loans or car loans). Then pay minimum payments on all your debts except the smallest. Throw as much money as you can toward paying off that smallest debt.

Once it's gone, take what you were paying on that debt and add it to your payment for the next-smallest debt. Repeat until you're completely debt-free!

Breaking down your credit card debt into smaller chunks makes it feel less overwhelming. And as you knock out each card balance one by one, those quick wins will motivate you to plow through the rest. That's why the debt snowball works—because it actually helps you make progress!