Recovering From Debt After Retirement Blogcritics.org (blog)
As we age, especially in today's economic climate, the years that follow retirement are not as easy as they may once have been. Besides an eventual loss of independence, many seniors suffer from a loss of income, often the result of high credit card debt. Recovering from this debt without assistance is usually impossible. Before retirement, most people utilize credit cards to purchases items they want, repaying the creditor with high interest. After retirement, however, seniors are faced with a loss of income, which turns their credit card use from an option to a necessity.
These needed purchases can include health insurance premiums, medical bills and medications, and groceries. In most instances, high credit card debt is very difficult to recover from. At any age, it is very easy to lose track of your financial situation and get into serious debt, especially when unexpected challenges arise. For seniors, medical expenses and an unexpected loss of assets through IRA and 401k accounts can greatly increase the need to rely on credit. Pensions and depleted savings eventually become insufficient to repay new and old debts.
Array
email: financial911@gmail.com *Update* Economic dow is dropping still but the worst is still yet to come.
Can credit card debt transfer to your children after your death?
An older family member of mine has a large amount of credit card debt and their only major asset is the house that they currently live in. From what I've read it seems that creditors will liquidate all of their assets including the house in order to try and cover the debt upon their death.
One of their children wants to purchase the house or assume the mortgage from them now and become the new owner. If the house is sold/transferred in this manner and no longer belongs to my older family member with the large debt, will creditors try to come after her child upon her death?
The house is located in Florida.
They better transfer the house before the death of this individual because you are right they will come after the estate of the deceased.
If the child purchases the house from them the seller needs to keep the money out of the banking system otherwise that money would now be the asset. But I'm sure you already know that.
Once the person is deceased the only thing the child needs to do is open the letters send a copy of the death cert. (it doesn't have to be certified unless they contact them and ask for one) and also include a note that says Deceased has no estate.
I've never after 2 1/2 yrs had any of my father in laws creditors write me again.
But overall, there might not be much point in doing this. If the sale price of the house is less than the mortgage balance, the bank will probably not allow the sale (this is a short sale). If there is no mortgage, or if it is smaller than the value of the house, the current owner will have the excess cash anyway and unless they are planning to spend it all while keeping the credit card debt, this will go to the credit card company on their death to cover the debts.
Creditors can not go after the children for credit card debts. If there is no surviving spouse, then an executor would be appointed to handle the estate. The executor would have to sell any assets (excluding the house) to pay any outstanding debts. The debts are to be paid according to their priority such as IRS, State Taxes, Liens, Judgments.
Credit cards are the last in line and most will simply charge off the debts.
Hope this answer is of help to you
LEGAL DISCLAIMER: The answer provided here is intended for informational purposes only. It is not intended nor presumed to be legal counsel or professional legal advice
Credit Card debt after death of ex?
At the time of our divorce, our bills were divided up and put in the divorce decree. My ex recently passed away, and suddenly last month I start getting letters from a collection agency for Capital One (the bill the ex got in the decree) wanting me to pay. I have faxed them a copy of the divorce decree. Is this sufficient to get them off my back? The ex left his life insurance to his fiancee, by the way. No other assets.
If he didn't you will have to check the laws of the state where the divorce took place. They are the only ones that have jurisdiction over it all.
He left NO assets? A car, checking account, anything? Even if he put his property into the girlfriend's name, if it was transferred recently (gifts in anticipation of death), she might have to pay out of what he gave her.
But you should be covered by that divorce decree. That is a court order. Do check your credit reports (annualcreditreport.com is the official website for the free once-a-year reports -- do NOT go to "freecreditreports.com" which is not free, and do not pay for "monitoring" service which is a useless expense) to ensure they do not attempt to claim the debts are yours.
Who is responsible for credit card debt after your death?
Your estate.
All of your stuff is liquidated, creditors are paid off, then anything left is taxed and distibuted to heirs. Feeding frenzy.
Dan.
Solution? Make sure you have credit insurance. Then if you do the deep six the insurance company pays the credit card company and your heirs wont have to worry about your debts.
Is accepting a payment plan for my credit card debt the kiss of death on my credit report?
I have been getting 30 and 60 lates on my report and I can't seem to pull out of this cycle of lates now that my rates are so high. My score is in the toilet. Will it be even worse when my report shows that I am on a payment plan, or can this be the first step into repairing my credit?
A payment plan is an excellent idea and will definitely help your credit. As long as you pay on time, your creditors will report to the credit bureau that you are in "good standing". It's in your favor to establish a payment plan, and if you're going to be late with a payment, call the company and ask for an extension.
Your score is already ruined
Once you pay on time for 6 months to a year, or so, the delinquencies won't be on your report anymore. I was delinquent for a couple of years on my college loan and I've paid it regularly for over a year now. Those late time don't show up on my credit report anymore.
Does credit card debt have to be repaid after the death of the cardholder?
the estate (what happens to the assets and debts of the deceased) is responsible for the payment of debts and distribution of assets.
A creditor can file a claim against the estate requesting repayment, if after the claim period passes there are sufficient assets in the estate (cash or property sold to convert to cash), the creditors will be paid.
If there is more money that creditors, all the creditors are paid in full and what is left over gets paid out to the heirs as stipulated in the will or if there is no will in accordance with the laws of the state.
If there is less money than debt, the creditors are arranged in order:
Priority claims (usually the mortuary)
Tax claims (yup, even death you can't escape the tax man)
secured debt (usually the collateral is repossessed and sold making that debt unsecured)
unsecured debt (credit cards, utility bills and the like)
at that point the money is paid out, in order, until it is all gone.
Please note that unless an heir or survivor is a cosigner or coborrower on and account, in 99% of the situations they are NOT responsible for the debts of the deceased.
TX Mom
can credit card debt be passed on after you die?
It is my understanding that unsecured debt can not be passed on to your spouse or children when you die. I work in the credit industry and when assisting a client who's husband or wife has passed away, they usually just fax or mail a copy of the death certificate then the debt is obsolved--as long as there are no other names and/or social security numbers on the accounts of the deceased individual.
Today, I have been told that depending on the state, common laws may allow the debt to be passed on.
Is this true?
Who is responsible for your credit card debt after your death?
Spouse or estate
If the spouse is still alive, he or she is still on the hook; otherwise, the estate must pay off the creditors.
Estate
The credit card company will first try to collect from the estate (assets will be sold to pay the bills). Then, if the account was a joint account, any survivors will be left holding the bag. If the debt belonged solely to the deceased, then the credit card company will end up eating the debt if there aren't enough assets to cover it.
Credit counselor agrees
I can confirm that the answer above is correct. I am a certified credit counselor and it is true that the credit card companies will try to collect from the estate first and if there is a co-signer, they will be responsible for the debt. However, if there is no estate to collect from the credit cards can not pursue collections from the family. They may try to get the family to pay the debt, but can not legally force them to. Simply mail a copy of the death certificate to the credit card company (certified mail) and they should take care of the rest.
Inheritance laws vary
Inheritance laws vary by state. If the state you live in (or the deceased lived in invokes "community family property" laws or "joint and several" provisions, heirs to an estate may be deemed responsible for the debts of a deceased person.
In most cases this has nothing to do with being a relative and everything to do with being an heir. The rationale is that anyone staking claim to the assets of an estate, should also be willing to accept its liabilities.
It depends
That would depend on if the person is the only account holder or if the person is married and lives in a community property state. When a person dies and is the only account holder, the person's debts and assets are generally handled by the state probate court. State laws govern what property is exempted from probate procedure and what is exempt. If the deceased was married and lived in a community property state, the surviving spouse is usually responsible for most debts regardless of who held the account.
Several possibilities
Your estate, your spouse, a cosigner.
** Well Actually, after a family member passes away **
Great Aunt died last January. A family member whom she had been staying with when she passed. Knowing that the past two mailings from them were returned, as well as knowing she had had a 0 balance before her death. Decided to place a call to the Creditor to stop the mailings. Upon opening the mailing to locate their phone number, discovered the Credit Card Company had billed her for February and March for their annual service charges of her credit card. And then also added late fees and interest on the monthly charge. The balance had been $0.00, At that time, was then somewhere around $90.00
Family Member: "I am calling to tell you that she died in January."
Bank: "The account was never closed and the late fees and charges still apply."
Family Member: Oh Ok, (thinking it should have been closed already)
Bank: "Since no payment has been made, it WILL be turned over to collections"
Family Member: "Maybe, you should turn it over to collections then."
Bank: "Sir, since it is two months past due, it already has been."
Family Member: So, what will they do when they find out she is dead?"
Bank: "Either report her account to the frauds division or report her to the credit bureau, maybe both!"
Family Member: "Do you think God will be mad at her?"
Bank: "Excuse me?"
Family Member: "Did you just get what I was telling you - the part about her being dead?"
Bank: "Sir, you'll have to speak to my supervisor."
Supervisor gets on the phone:
Family Member: "I'm calling to tell you, she died in January."
Bank: "Well Sir, the account was never closed and the late fees and charges still apply."
Family Member: "You mean you want to collect from her estate?"
Bank: (Stammer) "Are you her lawyer?"
Family Member: "No, I'm her great, great nephew."
Bank: "Could you fax us a certificate of death?"
Family Member: "Sure." Ask for the fax number to be given and sent it directly.
Placed on HOLD for 25 minutes. Even though our machine receipted them with having received the fax before even being put on hold already...
After they get the fax:
Bank: "Thank you for holding, Sir, our system just isn't set up for death. I don't know what more I can do to help you."
Family Member: "Well, if you figure it out, great! If not, you could just keep billing her. I don't think she will care."
Bank: "Well, the late fees and charges do still apply, So were going to need her new billing address."
Family Member: " "Name Witheld" Memorial Cemetery, Highway 129, Plot Number 001."
Bank: "Sir, that's a cemetery!"
Family Member: "What do you do with dead people on your planet
Bank: "click" (Hung Up The Phone)
That's What Really Happens *******
Credit Card Debt, Divorce and Death Question WA State?
Divorced 3 yrs ago, judgement was that I give him quit claim deed to house & he was to pay off debts (I only suspected amounts, we were separated for some time). After divorce,checked my credit report and saw a credit card on it, disputed it saying it was his debt and we had divorced & to correct it, and subsequently it was removed from my report & I assumed that was the end. Ex died a few months ago, now just this week I've been contacted by cc co. saying I owe $29,000! I earn low wages & no assets left. He apparently opened acct before I knew him & as far as I remember I am not a co-signer nor did I spend the money. He died broke but his mother died just days after him, and I believe his estate would have inherited substantially. The cc co is demanding immediate payment, saying they will ruin my credit which I have slowly built up to score of high 700's since the divorce. Told it is 7 months since last payment yet I've never seen a bill. Advice? Sincere thanks.
Saw a consumer law atty today who got on the phone and was given the same run around as they gave me, several different depts including "customer fullfilment". They had gone so far as to remove ex-s name from acct and show me as primary cardholder. He said he feels they are blowing smoke, not to worry. I have reported this to the FTC as this institution lied to me, tried to cheat me, and threatened me with ruin for something they knew full well that I am not responsible.
Stephen is on the right track with his answer. Also, I'm including a link for you to get a copy of his death certificate to add to the records you have.
The cc company is on a witch hunt (which person can we get to pay for this bogus claim).
You are not legally responsible for his debts and should not make any kind of 'offer' to pay them.
Check around because there are some very good attorney's in WA that will do the 'heavy lifting' (send them a cease and desist letter) for about $50 or so.
I have included the link where you can request the death certificate.
Is anyone responsible for my credit card debt in the event of my death?
When you die your estate will go through Probate, where all your assets(if you have any) and your debts will be reconciled. If you are the only signer on the accounts at your death and there isn't enough assets to cover your debts then the creditors will take their share determined by the court and write the balance off.
If there is a co-signer then they will go after them for payment.
I have $16,000 in credit card debt. Will it disappear after 7-10 years, or will it follow me forever?
Right now, I have no means of paying it off. If I were to get funding to go to college, and then be able to make more money, will I still have that debt for the rest of my life? If I wait to pay it until after I get a degree, the fines and interest will be even worse than they are now. I have read that I can't discharge credit card debt through bankruptcy. What do people do when they lose income from a spouse through divorce or death? How can they ever get past their debt when credit cards are in their name?
haha sucks to b u
Is the family of a person responsible to pay his unsecured personal loans or credit card debts after his death
Absolutely not, particularly since you say it is unsecured.
The banks or financial institution do try to intimidate the family of the deceased though.
It applies only to the guarantor if so ever.
after card credit death debt - News
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'Payment holidays' can ensure liquidity and credit survival - Nation Multimedia 'Payment holidays' can ensure liquidity and credit survival The plan would only be activated at least one month after card-holders subscribed to it. Imposing this clause would extend their responsibility and |
Money makeover: Newly single woman is tackling debt - San Diego Union Tribune
San Diego Union TribuneMoney makeover: Newly single woman is tackling debt To help pay off credit card debt faster, reduce discretionary expenses such as the housekeeper and shopping trips. Once the credit cards are paid off,
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Being in the black is the new black - Times Online Being in the black is the new black But Sheconomics is not merely about credit card abusers. It is about the reluctance that even high-achieving women feel about finance. |
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Getting Your Finances Organized - CBS News Getting Your Finances Organized For example, use extra cash savings and income to pay down credit card debt. When the credit card debt is paid off, use the money from credit card payments |
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Till debt do us part - Irish Times Till debt do us part The general rule of thumb is to target short-term, high-interest loans first, such as credit card debt. Also consider temporarily diverting money flowing |
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