During the process of administering your loved one’s estate, you may have many questions. One such question may involve what to do with the debts of the decedent. Credit card debt is one common example of a debt that may exist in an estate. Knowing how to handle this debt can help ensure that the administration is carried out properly.
7 Steps for Handling Credit Card Debt in an Estate
If you are in charge of administering an estate that contains credit card debt, consider taking the following steps:
- Determine whether the credit card account associated with the debt had a joint account holder or a co-signer. If so, other parties may share in the responsibility for the debt.
- Determine the final balance of the credit card account. To do so, you can contact the credit card company directly. The company has 30 days in which to provide the balance.
- Determine all existing debt and if there are sufficient funds or assets in the estate available to pay it.
- Contact a knowledgeable attorney for guidance. Under the law, debts must be paid in a certain order. For example, unpaid tax debt owed to the IRS will have a higher priority than credit card debt.
- Consider negotiating with the credit card company in order to reduce the balance that is owed. Many companies will agree to far smaller balances than what is truly owed in order to collect some amount of the debt.
- Sell an asset of the estate, if necessary, in order to pay the credit card debt.
Unless you have prior experience administering an estate, it is important to seek assistance from a knowledgeable attorney. We are here to help. We encourage you to check out our many case results for more information.