Credit card debt when someone dies

[Gundo]

My father in-law recently passed away and after his passing we discovered he had some credit card debt we didn’t know about. Now my in-laws has seperate finances. I have done some reading and found that the estate should settle the debt and I have also found reading that says aside from taking the deceased to collections there isn’t anything else holding the estate or deceased to repay the outstanding amount.

Has anyone had any experiences in regards to something similar ?

[afc wimbledon]

Its unsecured debt so the estate has no legal obligation to pay it

[opendoor]

Originally Posted by afc wimbledon

Its unsecured debt so the estate has no legal obligation to pay it

That's not true. Estates are liable for unsecured debt too, assuming it hasn't passed the limitation period (usually 2 years since incurring the debt or making any payments).

And whoever is the executor should be pretty careful if they're just going to ignore it. Because if they're aware of a legitimate debt but pay the proceeds of the estate out to the beneficiaries without paying that debt, they can become personally liable for it.


Of course that all that assumes that the estate is solvent.

[Cecil Terwilliger]

Consult a lawyer.

Are you the executor? Are there other assets in the estate? Have you paid them out already to the beneficiaries?

You need to be aware of what your obligations and potential liability is by acting as the executor.

[Slava]

And if you are the executor (or would like it), feel free to PM me and I can send you a checklist on the duties of an executor.

[SportsJunky]

Sort of off topic here but does Alberta still use the term executor? I thought they were called representatives now?

[troutman]

Originally Posted by SportsJunky

Sort of off topic here but does Alberta still use the term executor? I thought they were called representatives now?

The Act refers to Personal Representatives, but executor or trustee is often used too.

http://www.qp.alberta.ca/documents/Acts/e12p5.pdf

Section 7 - core task is to satisfy debts of the estate.

I think one reason interest rates are so high on credit cards, is that it can be difficult for them to collect the debt on death of the cardholder. I agree though with opendoor that the PR could be responsible for not paying all debts in a solvent estate.

We even advise the PR to advertise for creditors in some cases.

[Frank MetaMusil]

Has the collection agency filed a civil claim?

The statute of two years will reset if you agree to pay in writing or make any payments towards the debt.

If they have filed a small claim/civil case you need to make sure the statute has passed, otherwise they can lien on estate property if you don't respond within the claim timeframe.

[Gundo]

So at the current moment the outstanding balance was 1 month in arrears but was paid by my mother in-law once she found out about their existance. She is also both the executer and benifciary of the estate. Due to a checkered health history and pre-existing condition his life insurance Options were limited were once he got some. The credit card debt would consume about 50% of what his policy pays.

He have confirmed he had no other debts aside from that.

[Wormius]

I am confused a bit. What is the timeline here? Did the executor/beneficiary initally assume there was no debts owing and then disburse the assets to themselves?



In a slightly similar situation myself, however as executor and not the beneficiary, we notified the credit card company (that put a hold on any interest and not send the debt into collections while we sorted out the estate). Since this person had a business it was a bit more involved and we opted to put an ad in the paper, and they have up until a certain date to give us details of any debts owing. If there is nothing further, the outstanding debts that we know about get paid, and anything remaining goes to the beneficiary.

[Gundo]

It’s been about 3 months since he has passed and until this popped up aside from the mortgage there was no other outstanding depts we knew of.