If a Nevada resident dies with an outstanding credit card balance, what happens to that obligation? The answer to that question depends on the circumstances surrounding the balance and if that person was the only one who was obligated to repay that debt. In most cases, the estate of the deceased person is required to pay that debt if there are sufficient assets to do so.
In the event that there is not enough money to cover the extent of the debt, lenders will more than likely write off those losses. However, a creditor may be able to come after the surviving spouse for that debt if he or she lives in a community property state. An individual may also be responsible for paying the debt if that person was the executor of the estate and failed to act in a lawful manner in that role.
The only other common scenario that would require anyone to pay the credit card debt of a deceased person is if that person was also named on the account. In that case, an individual may be responsible for paying the entire balance when the other account holder dies. Even if debt collectors call and demand payment of the debt, no one is required to pay it if they were not liable to do so in the past.
A high level of communication can help sort out issues related to credit card and other types of debt when a family member passes on. To increase the odds of settling a family member’s affairs quickly and easily, it may be worthwhile to consult with an estate planning attorney. The attorney may be able to organize documents and take other steps to administer the estate.
Source: The Motley Fool, “What Happens to Credit Card Debt When Someone Dies“, Peter Andrew, July 19, 2014