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Who will inherit my credit card debt?

Dear Steve,
If I should die with a great deal of credit card debt, will my son be responsible for paying this debt?
-- Maria

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Dear Maria,
Well, Maria, the short answer is, probably not, at least not directly. Based on the wording of your question, I am assuming that your son is not a co-signer on any of your credit cards. That being the case, your son will not be responsible for your debt when you die. However, your credit card debt can, and most likely would, be paid by your estate. If the estate cannot pay off the debt, no one else can be held responsible for your debt unless he or she is a co-signer on the account.

Keep in mind that if you do have an estate and leave a large credit card debt, your estate will be depleted by the amount owed your creditors. If you do not have any other assets, your home and possessions may be sold to generate the funds to pay off your creditors. If you are planning to leave something for your son, there may be nothing left after your debts are paid.

Something tells me there may be more to your question than you are asking.

Two scenarios come to mind from long years of dealing with financial issues. First, and most likely, you are concerned about your debt load and may think you have a serious medical condition. That may be so, but you may live longer than you think. In the early '90s, I counseled a number of AIDS patients who had acquired a huge credit card debt expecting that they were terminally ill. Then they found out the diagnosis is not a death sentence, to their personal relief and financial embarrassment. I have no idea what your health situation is, but even if the situation looks bleak now, you might want to work on a plan to pay off the debt as aggressively as you are able. Regardless of what your doctors say today, tomorrow is up to the big guy upstairs.

If you are using credit cards to extend your income because you do not have enough money to cover basic needs, I suggest that you take action now. If you own a home with a substantial amount of equity, make that equity work for you by considering an equity loan, a reverse mortgage (which is a loan against your home that requires no repayment), or selling your home and moving into something smaller and using the proceeds to reduce you debt and extend your monthly income.

If you rent or have no equity, and do not have enough income to cover your expenses, you might want to have a talk with your family. No doubt you've done a lot for your son over the years. This could be an opportunity for him to say thanks by giving you some assistance.

If you are overwhelmed by the idea of paying off your credit card balances, get help from a reputable credit counseling agency. A certified credit counselor can help you work out a plan that best fits your particular financial circumstances and needs.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Consumer Credit Counseling Service of Southern New England. Visit CCCS for additional debt advice or click here to ask a debt question.

-- Posted: May 27, 2005




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