debt

Should kids pay mom's debt after death?

Steve BucciDear Debt Adviser,
A couple of months ago, my friend's mother died. Her brother is handling the estate and has been wondering about their mother's $2,100 outstanding credit card debt. The mother had no assets except for a mobile home worth around $10,000. Are children responsible for paying their parents' debt after death? My friend was told creditors can come to them to settle the debt. If she is contacted by debt collectors, what can she do? I advised her not to make any payment or promise of payment since her name wasn't on the credit card agreement. Please advise.
-- K.L.

Dear K.L.,
You were correct to advise your friend not to pay. As long as neither your friend nor her brother is a joint owner of the credit card accounts, they are in no way responsible for the balances on those accounts. It doesn't matter if they're authorized users on the account, as authorized users aren't responsible for payments.

The creditors may contact your friend's brother, since he is the executor of the estate. When contacted, he should tell the creditors that his mother is deceased and offer to send a copy of the death certificate. Most creditors will require a certified copy of the death certificate. When your friend orders them (sometimes the funeral director orders an initial supply), I recommend he order at least five more than he thinks he might need.

The person who told your friend her mother's creditors may come to her for payment may have meant the creditor would look to the mother's estate for payment. If your friend's mother had a will, and it goes through the probate courts, the credit card company could pursue payment of the debt through her estate. From your letter it sounds as if her mother had very limited assets, but the creditor may choose to file a claim against the estate anyway. However, in most cases the credit card company would be at the bottom of the list when it comes to who gets what from the estate. Each state has a time period during which claims may be filed. After the period has ended, no additional claims need to be paid.

Rather than wait to be contacted, your friend's brother could call the customer service number on the account and offer to send a certified copy of the death certificate. When sending the certificate, he should include a simple letter stating that the account owner is deceased and there are no assets to pay the balance due. As far as the $2,100 credit card debt that you mention, because your friend's mother does not owe a great deal to the credit card company, it is likely the creditor will simply charge off the debt.

Here are two final tips for your friend: First, she should tell her brother to notify the credit reporting agencies of the death. The agencies will update their records on their own, eventually, using Social Security information. In the meantime, identity theft is always a possibility. So a note to the credit reporters is a smart and easy thing to do to avoid future problems. Second, if either of them was an authorized user, they should pay close attention to their credit reports to be sure any charge-off doesn't end up on their records. If it does, it can be removed by contacting the credit bureau.

Good luck!

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