Credit Card Debt Upon 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.

2008-11-17 23:37:54 by extisc

When you die, credit debt can be transferred to a spouse or next of kin depending on state laws. Check the laws on credit card debt being passed ...

No, unless there is a co-signer. When the person dies their estate pays their outstanding bills from life insurance, etc.

If there is not enough to pay off all of their outstanding bills, the credit card company is out of luck.

2006-08-10 19:38:00 by rwhz199

If you die and you had a living will that stated upon death your house went to two people and you have no other assets - what happens to your credit card debt?
Attorney said that the house is basically deeded to the people now and that would automatically go to the people as written in the living will. He stated that nothing could be done with the house.
I'm wondering about credit card debt with high balances of $10k-$20k
In the United States

I suspect you have your terminology confused. A living will is a health care directive and has nothing to do with passing assets onto heirs.

Normally, the estate would have to go thru probate and all creditors would have to submit the debts. Assets would be liquidated to pay the debts before the heirs get anything. However, if the houses were already deeded to the heirs BEFORE the person died or if the deeds were survivor deeds (automatically go to the co-owner), the houses would not be part of the estate.

If credit card companies are looking for payment, maybe you should refer them to the lawyer and let him explain.

2008-12-10 10:52:44 by Southern Belle ☆

Upon Dad's recent death, we were shocked to find he had three credit card debts, totalling nearly £6K. He was only paying minimum payments, which swallowed most of his pension. He has no other assets except share of the bungalow/mortgage with my mother which is in joint-names. He only had a small bank account, through which his pension, mortgage and bills were paid. The cards were in sole name only. His bungalow with my mother is mortgaged in joint-names, but has no life assurance, so now my mother has to pay the mortgage from her small pension. Can these credit card people force my mother to sell her bungalow to pay the CC debt ?? (Bungalow is warden-assisted, worth about £120K, with mortgage of about £25K).

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2006-10-09 02:56:57 by parent

My 74yo mother is continuing to pile up debt (refinances, 2nd mortgages, credit cards, overdrafts, etc. Mom pays her mortgage & has plenty to pay her bills, but spends on misc crap (dollar store) & doesn't pay her bills. My sister lives with mom & pays most bills except house mortgage. But sister is in school & running out of ability to help mom w/her bills. Especially when she overdrafts her checking acct by $300-500/month
What can we do to help/hinder her from creating more debt? She's not all there mentally (strokes, memory loss), and really not able to make sound financial decisions, but refuses our help in budgeting.
She is physically declining and frankly we don't want to be stuck with all this debt when she dies. What can we do to NOT be stuck with her debt upon her death? Do we have any legal rights to take control of her money? I'm MORE THAN WILLING to budget/pay her bills, but she is stubborn & hides her mistakes.
Currently, her WILL names me as sole inheritor and I don't have the $$ to make the mortgage payment. (I live 150 miles away & have my own apartment/job) What can we do?
Ideally, we'd like to keep the house/property where we grew up (where mom currently lives), but with her additional debt/mortgages, it's highly unlikely.

Any help is appreciated...

It will eventually go to to the estate and the lendors will get the brunt of it...but until then it might be a good idea to consolidate all of her debt so she has one payment to make instead of the many, AND she won't be getting crazy interest payments.

2009-07-08 21:57:04 by Gert