Credit card liability when spouse dies

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JediMisty
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Credit card liability when spouse dies

Post by JediMisty »

My sister is looking for advice from me as she is niave regarding financial matters. Her husband passed away last week. She's wondering if she is liable for his credit card bills. They total in the thousands, she's too upset to look for the statements and I live 8 hours away. Here's a quick picture of her situation:

There was no life insurance
Her husband had no brokerage accounts, savings accounts, IRAs, CDs, 401ks or pension
They had a joint checking account with little in it becuase they lived paycheck to paycheck
She lives in Florida

They have a condo bought in September, 2019 but didn't make paymets for 2 years or so when he was laid off during COVID (and for several months thereafter since the bank was not requiring that they make payments.) She said that both of their names are on the deed even though only his name was on the mortgage. She has not found the mortgage papers yet, so doesn't know if it's a fixed rate or adjustable rate mortgage. The modest condo has appreciated in value according to Zillow 60k or 80k since it was bought.

I suspect that interest will continue to accrue on his credit cards until they put a lien on her condo, so it's best to get all the facts ASAP. Her only source of income is SS of about $1,100/ month. She is 68. Due to various emotional and physcial issues her getting a job is very unlikely. I have explained that she should file for SS based on his record ASAP becuase her benfit will be supplemented by what he would gotten at FRA. He didn't make much money, but more than she did. She plans to call SS but is still to overwhelmed by his sudden death.

Her plan was to "just not pay" his credit card bills since they were only in his name. Is that feasible or will they put a lien on ther condo?
Dottie57
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Re: Credit card liability when spouse dies

Post by Dottie57 »

Do you have an extra room in your house?
Silk McCue
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Re: Credit card liability when spouse dies

Post by Silk McCue »

Florida is not a community property state. Your sister is not responsible for the credit card debt if it wasn’t her account. She needs to be clear on that point in case should they ask her if she is going to pay. The CC company should be be notified of the death so that no other charges including recurring can occur. The CC is not secured debt. They can’t place a lien on the condo.

No further payments should be made on the CC.

Cheers
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CAsage
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Re: Credit card liability when spouse dies

Post by CAsage »

Suggest your sister go to annualcreditreport.com and request a FREE report on her SS number. That will show all the credit cards and any other debts in her name. Just pick any of Experian/Transunion/whatever#3 is. Note that she will not have to pay for this. Download the report, so the two of you can discuss/review it together. And yes, if her spouse earned more, she is entitled to a spousal bump (totalling the higher benefit of theirs). I suspect budget issues will be next, and possibly selling the condo.
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cubs1999
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Re: Credit card liability when spouse dies

Post by cubs1999 »

I'm not a lawyer but I've briefly looked into FL probate laws as I had parents that lived there at one point. As I understand it, FL has one of the more favorable laws for spouses after death. For example, as can be seen in this link, up to two vehicles and $20k in household furnishings are excempt from probate and go directly to the spouse. You didn't mention vehicles but this seems to mean that not only do they not have to go through print process at all, they are excempt from creditors.

https://m.flsenate.gov/Statutes/732.402
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celia
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Re: Credit card liability when spouse dies

Post by celia »

How were they planning on paying living expenses in retirement?

Give her a week or two to mourn and have her husband cremated (to save money). Then she needs to create a budget to cover minimal living expenses. Have her look at it as just a math comparison to see what her expenses will be compared to her income.
Jags4186
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Re: Credit card liability when spouse dies

Post by Jags4186 »

I would also stress that your sister should not be using his credit cards anymore.
Dregob
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Re: Credit card liability when spouse dies

Post by Dregob »

Silk McCue wrote: Thu Jun 30, 2022 7:17 pm Florida is not a community property state. Your sister is not responsible for the credit card debt if it wasn’t her account. She needs to be clear on that point in case should they ask her if she is going to pay. The CC company should be be notified of the death so that no other charges including recurring can occur. The CC is not secured debt. They can’t place a lien on the condo.

No further payments should be made on the CC.

Cheers
From my understanding, she is NOT responsible UNLESS it is a joint account. If she was just an authorized user she is NOT responsible.
I just changed our major credit card, which we use to autopay almost every bill, to a joint account.
Why? If I die that account is still hers and active and the road goes on, the bills are paid. And yes, she will be responsible for paying the credit card bill.
Last edited by Dregob on Thu Jun 30, 2022 9:07 pm, edited 1 time in total.
Silk McCue
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Re: Credit card liability when spouse dies

Post by Silk McCue »

Dregob wrote: Thu Jun 30, 2022 8:57 pm
Silk McCue wrote: Thu Jun 30, 2022 7:17 pm Florida is not a community property state. Your sister is not responsible for the credit card debt if it wasn’t her account. She needs to be clear on that point in case should they ask her if she is going to pay. The CC company should be be notified of the death so that no other charges including recurring can occur. The CC is not secured debt. They can’t place a lien on the condo.

No further payments should be made on the CC.

Cheers
Just to clarify, she is NOT responsible UNLESS it is a joint account. If she was just an authorized user she is NOT responsible.
I just changed our major credit card, which we use to autopay almost every bill, to a joint account.
Why? If I die that account is still hers and active and the road goes on, the bills are paid. And yes, she will be responsible for paying the credit card bill.
I agree. The OP stated that they were “his credit cards” which is what I relied on in my reply. Hopefully that is truly the case.

Cheers
mptfan
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Re: Credit card liability when spouse dies

Post by mptfan »

The answer is no, your sister is not liable for her husband's credit card debt.

https://www.early-retirement.org/forums ... 26181.html
petulant
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Re: Credit card liability when spouse dies

Post by petulant »

Silk McCue wrote: Thu Jun 30, 2022 7:17 pm The CC is not secured debt. They can’t place a lien on the condo.
Just to clarify for future readers, it is possible for unsecured debt to form the basis for a lien. An unsecured creditor can file suit, reduce a debt to judgment, then--depending on the state--file the judgment with an appropriate authority to create a lien against property. In this case, no lien was created since apparently the husband was not actually sued by the credit card companies before his death. But just because something is an unsecured debt does not mean that you can never end up with a lien.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

petulant wrote: Thu Jun 30, 2022 9:17 pm
Silk McCue wrote: Thu Jun 30, 2022 7:17 pm The CC is not secured debt. They can’t place a lien on the condo.
Just to clarify for future readers, it is possible for unsecured debt to form the basis for a lien. An unsecured creditor can file suit, reduce a debt to judgment, then--depending on the state--file the judgment with an appropriate authority to create a lien against property. In this case, no lien was created since apparently the husband was not actually sued by the credit card companies before his death. But just because something is an unsecured debt does not mean that you can never end up with a lien.
Thanks for the clarification, Petulant. I knew that in Florida my now deceased step-mom had a judgement against her for credit card debt while still alive. As a result, my Dad would not place their trailer and property into her name, but gave her a life estate and made me remainderman upon his death. That's where I got the mistaken idea that my BIL's credit card debt might result in a lien against my sister's and his condo. It all makes sense now.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

Silk McCue wrote: Thu Jun 30, 2022 9:02 pm
Dregob wrote: Thu Jun 30, 2022 8:57 pm
Silk McCue wrote: Thu Jun 30, 2022 7:17 pm Florida is not a community property state. Your sister is not responsible for the credit card debt if it wasn’t her account. She needs to be clear on that point in case should they ask her if she is going to pay. The CC company should be be notified of the death so that no other charges including recurring can occur. The CC is not secured debt. They can’t place a lien on the condo.

No further payments should be made on the CC.

Cheers
Just to clarify, she is NOT responsible UNLESS it is a joint account. If she was just an authorized user she is NOT responsible.
I just changed our major credit card, which we use to autopay almost every bill, to a joint account.
Why? If I die that account is still hers and active and the road goes on, the bills are paid. And yes, she will be responsible for paying the credit card bill.
I agree. The OP stated that they were “his credit cards” which is what I relied on in my reply. Hopefully that is truly the case.

Cheers
Thanks for your responses. MY sister is adamant that the accounts in question were his and his alone.I have advised her to NOT make any payments on these accounts or his medical bills. It turns out she had already heard from the CC compnay regarding payment and told them he was dead.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

Silk McCue wrote: Thu Jun 30, 2022 7:17 pm Florida is not a community property state. Your sister is not responsible for the credit card debt if it wasn’t her account. She needs to be clear on that point in case should they ask her if she is going to pay. The CC company should be be notified of the death so that no other charges including recurring can occur. The CC is not secured debt. They can’t place a lien on the condo.

No further payments should be made on the CC.

Cheers
Thanks for your response. I've passed this on to her.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

Jags4186 wrote: Thu Jun 30, 2022 8:51 pm I would also stress that your sister should not be using his credit cards anymore.
I did tell her specifically not to use his credit cards AT ALL. (In the past, they were planning to declare bankruptcy and ran up their credit cards as much as possible prior to the filing. :oops:) I advised her strongly not to use his cards.....
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Re: Credit card liability when spouse dies

Post by JediMisty »

celia wrote: Thu Jun 30, 2022 8:31 pm How were they planning on paying living expenses in retirement?

Give her a week or two to mourn and have her husband cremated (to save money). Then she needs to create a budget to cover minimal living expenses. Have her look at it as just a math comparison to see what her expenses will be compared to her income.
Thankfully she had already decided on cremation and was stressing over coming up with the $1,100 when his brother offered to pay for the cremation. I am trying to get her to focus on applying for increased SS benefits, finding out about the mortage and putting together a budget. She's never been good with money and her despondent state is making matters worse. Her in-laws are taking her boating and on other excursions, which keeps her busy, but also distracts her from these necessary tasks. I've suggested a roommate but she is not interested.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

CAsage wrote: Thu Jun 30, 2022 7:36 pm Suggest your sister go to annualcreditreport.com and request a FREE report on her SS number. That will show all the credit cards and any other debts in her name. Just pick any of Experian/Transunion/whatever#3 is. Note that she will not have to pay for this. Download the report, so the two of you can discuss/review it together. And yes, if her spouse earned more, she is entitled to a spousal bump (totalling the higher benefit of theirs). I suspect budget issues will be next, and possibly selling the condo.
I will definitely do this. She says she has no idea where her credit rating is. Even if she sold the condo, she would need to move and rent something. With a poor credit rating, I don;t know how she would rent. They declared bankruptcy several years ago, lost a house to foreclosure, etc.
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Re: Credit card liability when spouse dies

Post by JediMisty »

Dottie57 wrote: Thu Jun 30, 2022 6:49 pm Do you have an extra room in your house?
MY worst nightmare. She is a heavy pot smoker and needs constant attention. I don't want to give up the life I've built to be her nursemaid.
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Lee_WSP
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Re: Credit card liability when spouse dies

Post by Lee_WSP »

The creditors can come after the estate, but not your sister personally. The likelihood of such action is beyond the scope of this reply.
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celia
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Re: Credit card liability when spouse dies

Post by celia »

Sounds like she has ”more important” things to do at the moment.

Many seniors live solely on SS. She will likely join them eventually. The reality just hasn’t set in yet.

Give her time and she will call you again. Just have her estimate all her expenses any way she can. It doesn’t matter how thorough or accurate the list is. After she has a total, your question will be “How do you plan to pay those expenses?” Then let her think about it for a week or two. I think it will take her a while to realize she has a financial problem.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

celia wrote: Fri Jul 01, 2022 2:22 am Sounds like she has ”more important” things to do at the moment.

Many seniors live solely on SS. She will likely join them eventually. The reality just hasn’t set in yet.

Give her time and she will call you again. Just have her estimate all her expenses any way she can. It doesn’t matter how thorough or accurate the list is. After she has a total, your question will be “How do you plan to pay those expenses?” Then let her think about it for a week or two. I think it will take her a while to realize she has a financial problem.
The very first day she told me she doesn't know how she can pay all her bills. She recognizes she has a financial problem. From what she has mentioned these last sevreal months, her plan is to move in with me. That will not work for me as she requires constant hand holding even though she doesn't have any debilitationg illnesses. The difficulty is to get her to see the extent of the problem and to take real helpful action or make any kind of plan. She's postponing even calling SS to make an appointment. She hasn't even gotten the death certificate in her hands.

I like the approach of trying to get her to casually list expense. So far I can't even get her to look at the mortgage papers or determine the type of mortgage she has. I have two freinds living solely on SS, but they already have paid for homes, albeit modest.
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Re: Credit card liability when spouse dies

Post by JediMisty »

Lee_WSP wrote: Thu Jun 30, 2022 10:05 pm The creditors can come after the estate, but not your sister personally. The likelihood of such action is beyond the scope of this reply.
Thanks, Lee_WSP. From everything she's told me there are no assets whatsoever in his name or hers for that matter. They always spent any cash they had and then some. In fairness it wasn't just bad habits, they're salaries were cringe worthy. If I were present I might be able to help her more. I know she needs to make a budget, but getting her to that realization is tough.
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Re: Credit card liability when spouse dies

Post by Rex66 »

Likely she won’t make a budget even though it’s good advice.

When you are at that end of the economic spectrum, it’s pretty disappointing to look at the hard numbers. Might be where ignorance is bliss comes from.
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Re: Credit card liability when spouse dies

Post by montanagirl »

She needs to get on the waiting lists for senior subsidized housing - somewhere.

But she probably won't be allowed to smoke pot there. :twisted:
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

montanagirl wrote: Fri Jul 01, 2022 11:24 am She needs to get on the waiting lists for senior subsidized housing - somewhere.

But she probably won't be allowed to smoke pot there. :twisted:
I'll look into that. Thanks!
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Re: Credit card liability when spouse dies

Post by MJS »

Jags4186 wrote: Thu Jun 30, 2022 8:51 pm I would also stress that your sister should not be using his credit cards anymore.
Automatic payments will continue to be paid by the card, until it is closed, which is a potential problem in some places. If any important services -- AAA, TV, utilities -- are on automatic payment from his cards, they need to be assigned to another account.

You both have my sympathy.
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ResearchMed
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Re: Credit card liability when spouse dies

Post by ResearchMed »

JediMisty wrote: Fri Jul 01, 2022 11:36 am
montanagirl wrote: Fri Jul 01, 2022 11:24 am She needs to get on the waiting lists for senior subsidized housing - somewhere.

But she probably won't be allowed to smoke pot there. :twisted:
I'll look into that. Thanks!
You might want to contact a local "elder care services" agency near her, to alert them that she may need assistance. There may be free services or at least occasional checks about her welfare, and perhaps a social worker would be assigned.

There may be other benefits available, such as meals or plain food, transportation, etc.
Not sure how much any drugs would interfere. Is that legal in her jurisdiction?

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celia
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Re: Credit card liability when spouse dies

Post by celia »

OP, in a way, it sounds like you would help her, but not to your detriment or putting up with her bad habits. Being a good listener and knowing about resources (when she asks) will help her, so continue to “be there” for her.

She will never be a Boglehead. (Neither will most people.). But she needs to learn to ask for help. Refer her to her local senior center where they will likely point her to services she needs. Let her figure out where it is and have her first report back to you where it is located. Then have her call them to make an appointment to talk to someone like a social worker. Ask what the social worker’s name is (so you know she called).

Ask what they suggested. Each time you talk with her, ask what the next /upcoming step is.

Look at this as teaching her how to get help. Make this HER learning experience, not yours (although you likely already have a sense of what’s out there).
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Re: Credit card liability when spouse dies

Post by Dottie57 »

JediMisty wrote: Thu Jun 30, 2022 10:01 pm
Dottie57 wrote: Thu Jun 30, 2022 6:49 pm Do you have an extra room in your house?
MY worst nightmare. She is a heavy pot smoker and needs constant attention. I don't want to give up the life I've built to be her nursemaid.
I am sorry for your situation. How in the world does she afford the pot? Her SS is small.
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Re: Credit card liability when spouse dies

Post by island »

Has she told you she wants to move in with you and have you told her that’s not going to happen? If not, having that conversation may awaken a sense of urgency.
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Re: Credit card liability when spouse dies

Post by JediMisty »

island wrote: Fri Jul 01, 2022 7:11 pm Has she told you she wants to move in with you and have you told her that’s not going to happen? If not, having that conversation may awaken a sense of urgency.
I dodged the question several times and finally had told her in April. I'm not sure she heard me....I do believe that I need to reiterate it to her so she focuses on her SS and other important issues rather than assuming I will bail her out. I did suggest her cleaning out one of her two bedrooms and getting a roommate. I've made that suggestion twice in the two weeks since her husband died. She doesn't believe her HOA allows rentals. I know mine doesn't unless it's a family member or a friend who isn't paying. It's tough to discuss finances since she is distraught.
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

Dottie57 wrote: Fri Jul 01, 2022 3:48 pm
JediMisty wrote: Thu Jun 30, 2022 10:01 pm
Dottie57 wrote: Thu Jun 30, 2022 6:49 pm Do you have an extra room in your house?
MY worst nightmare. She is a heavy pot smoker and needs constant attention. I don't want to give up the life I've built to be her nursemaid.
I am sorry for your situation. How in the world does she afford the pot? Her SS is small.
I've noticed with her and her now deceased husband that pot, cigarettes, and alcohol were typically a priority. Only a few times did they truly abstain. In those times they were going to charities to get food.
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Re: Credit card liability when spouse dies

Post by JediMisty »

celia wrote: Fri Jul 01, 2022 3:34 pm OP, in a way, it sounds like you would help her, but not to your detriment or putting up with her bad habits. Being a good listener and knowing about resources (when she asks) will help her, so continue to “be there” for her.

She will never be a Boglehead. (Neither will most people.). But she needs to learn to ask for help. Refer her to her local senior center where they will likely point her to services she needs. Let her figure out where it is and have her first report back to you where it is located. Then have her call them to make an appointment to talk to someone like a social worker. Ask what the social worker’s name is (so you know she called).

Ask what they suggested. Each time you talk with her, ask what the next /upcoming step is.

Look at this as teaching her how to get help. Make this HER learning experience, not yours (although you likely already have a sense of what’s out there).
I like asking her about her next step. I sent her a link to HUD resources that can help her avoid foreclosure. My knowledge of available resources for seniors and low income folks is patchy. First of all, I haven't lived in Florida since 1980. Secondly I'm not quite a senior and haven't been low enough income to qualify for assistance since I left college. She and I truly live in different worlds. It's been 45 years since I've had concerns for basic needs such as food, clothing, and shelter. I realize I am lucky, but I've also lived beneath my means. Easier to do when you make six figures, of course. I offered her free room and board and tuition for a one year paralegal course that was offered near me in NJ back in the mid eighties She didn't want to be away from her then BF now deceased husband for a year. For years I've paid her expenses when we vacation together and sent her $500 or so at Xmas. But generally not helped in any substantial way. Hopefully if I try a question approach, it will be more helpful to her learning and finding resources.
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Re: Credit card liability when spouse dies

Post by Jags4186 »

JediMisty wrote: Thu Jun 30, 2022 9:50 pm
Jags4186 wrote: Thu Jun 30, 2022 8:51 pm I would also stress that your sister should not be using his credit cards anymore.
I did tell her specifically not to use his credit cards AT ALL. (In the past, they were planning to declare bankruptcy and ran up their credit cards as much as possible prior to the filing. :oops:) I advised her strongly not to use his cards.....
I don’t know the law, but continuing to use the card while the account holder is deceased with no intention to pay is probably fraud so I would stress that to her. She doesn’t need legal trouble on top of her financial woes.
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Re: Credit card liability when spouse dies

Post by epictetus »

I would encourage you to focus on what you can control or this situation may consume you.

You can suggest things, provide resources, etc. but you cannot make her take any steps towards the things you have suggested.

And if you are suggesting before she is asking/interested it is even less likely she will take those steps.

At the moment and maybe for years it sounds like you have been working a lot harder to help her have a decent situation than she has.

You have been a good brother to her.

It is rough to see a family member doing poorly. But you may not be able to save her from herself.
Focus on what you can control
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JediMisty
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Re: Credit card liability when spouse dies

Post by JediMisty »

epictetus wrote: Sat Jul 02, 2022 7:38 am I would encourage you to focus on what you can control or this situation may consume you.

You can suggest things, provide resources, etc. but you cannot make her take any steps towards the things you have suggested.

And if you are suggesting before she is asking/interested it is even less likely she will take those steps.

At the moment and maybe for years it sounds like you have been working a lot harder to help her have a decent situation than she has.

You have been a good brother to her.

It is rough to see a family member doing poorly. But you may not be able to save her from herself.
This is great advise. Thank you.
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