How to deal with the credit card debt of a deceased person

If a person close to you passes away, like a spouse, do you know how to deal with that person’s credit card debt?  It’s a difficult task to deal with aside from the obvious grieving.  There is a process for such a task and the sooner one deals with it the better for everyone.

First, ascertain who is responsible for the credit card debt.   If the deceased person is the only person named on the credit card, then the debt should end with their passing.  If you are also responsible for the debt, you will be required by the creditor to pay the balance.  The creditor(s) must be notified as soon as possible of the debtor’s passing.  This will avoid any distressing collection calls occurring for those left behind.

You can notify creditors by following these steps:

  1. Ask the funeral home to notify Social Security of the passing.  Normally this is a service provided by the funeral home.  You will sign an authorization form for this service.
  2. Take an inventory of the bills coming in each month in the name of the deceased and make a list.  Then contact each creditor via a letter or email explaining the person’s passing and ask to close the account. Include a copy of the last monthly statement.  Ensure you keep a paper trail for all communication to the creditors. Some creditors will require a copy of the death certificate.  If you need to mail it, provide a copy, keep the original certificate.  You may need to personally show the original death certificate so be prepared to do so.
  3. If you are only an authorized user of the deceased person’s credit card, do not use the credit card.  You will only add to the balance and complicate the procedure for closing the account.  Instead, if you require a credit card, apply for a new credit card in your name only.

We have included more tips about dealing with debt after the death of a spouse in the blog post: Saddled with Debt after Death of Spouse.

For those survivors who are responsible for the unresolved credit card debt, it is understandable that the loss of the deceased person’s income or pension can further deteriorate financial stability. Coupled with funeral and burial costs, a person would easily and quickly become financially crippled.

That being said, it is fairly important to avoid making any rash decisions for dealing with debt.  Securing debt to a home investment, with a Home Equity Line of Credit, (HELOC) could very well put one’s home investment into jeopardy, should any payments lapse.  If you have lost a spouse, and have unsettled debt that is interfering with the quality of life, you need to resolve your finances ~ now.

OCCA Consumer Debt Relief has helped thousands of Canadians for over a decade.  Many of our members are bereaving survivors who have been left in financial stress.  We are accustomed to managing their debts and tailoring reasonable and affordable repayment plans that have allowed them to get back to a better place financially, and eventually emotionally.

We can help.


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