How does it work with a deceased having CC debt?

[joshuagraham]

I know someone that is the spouse of a recently deceased that had a CC completely in his name. The deceased also had a brokerage account & IRA with a different financial institution. The spouse said that the CC's legal department said that if he had assets anywhere, she had to pay the debt.

I am wondering if the CC's legal department was accurate, or if they are being in a33hat mode. Certainly, the CC could file a claim at the succession hearing (and it would be in the spouse's best interest to not have the CC involved so as to keep the succession attorney's expensive time minimized), but I am wondering if the CC would have the ability to put a lien on any assets that would be going to beneficiary outside of the succession case, whether that account is IRA or non-IRA. Could it be that all the banks are in collusion so that if someone passes, the CCs simply broadcast to anyone listening that "this guy that just died owes us money", and financial institution that has any assets in his name put a hold on it?

[justbroke]

Death does not remove responsibility for payment. The executor of the estate is responsible for settling all debts owed by the decedent.

Yes, it's morbid but, unfortunately, debt does follow one to the grave. It is visited upon the survivors (the Estate). I recall a creditor calling me asking if I had an address for my brother (he died in 2006 and this was 2016). They were insistent, so I gave them the address of the cemetery and the plot number. When I said "plot number" the person inquired "plot? number?"... to which I replied, "yes, of course, he's dead for 10 years."

Now that's what you call a conversation end-er.

Please know that I'm not an attorney and certainly not an estate planner. These can be complex matters if there are trusts (inter-vivos or not) involved, wills, or other estate planning tools utilized. In the end, debt is debt. I don't know the inner-workings of how the debt of a decedent is collected, but the creditors will come.

[Carmella]

I am not an expert either, but from people I have known. If they have no money in their estate the CC is out of luck. The surviving spouse did not have to pay it from his pocket. If you have an estate then you need to pay it. I do not know what lengths the CC companies go through to collect the debt.

[Barbisi]

I wonder if that creditor was able to get any settlement from the spouse /partner or children of your brother after they found out he had passed away a decade before, justbroke. I suppose a statute of limitations exist for the dead's debts ,but maybe not!
You're right about the morbid conversation but it's a good thing to know in case some one on here inherits money during or even after the bankruptcy ends - just how long after death can creditors demand payment for a long-ago commenced CC charge?

[justbroke]

I don't know, but I'm sure they bothered his widow. There was a sale of some property to pay back some creditors, but this was long after those debts were settled (so to speak). I think there is a statute of limitations which is usually just 2 years. This creditor was likely just a junk debt buyer (JDB) that bought a portfolio of truly junk debt, and was just poking around.

(While debt collection may have a statute of limitations, that limitation is for lawsuits. Generally a debt collector can still try to collect forever, but can't threaten or use process (the courts) to obtain any money.)