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After Death – Who Pays the Credit Card Bills?

October 24, 2012

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After the death of a loved one, no one wants to be thinking of such everyday realities as paying the deceased person’s credit cards, but it is something you may have to deal with. Typically, after someone dies, the estate pays any outstanding bills. If there is a shortage of funds, the creditors sometimes are left holding the bag, but it could be you in certain instances.

The first case in which you may be responsible is if you are a joint cardholder with the deceased. This frequently happens with spouses or with young adults who may need an older person to co-sign in order to get their first credit card. If you are an authorized user only, you’re not liable for the debt, but if you co-signed as a joint cardholder, you are. (August 20, 2012, “After Death, Who Inherits Credit Card Debt?” Bankrate.com)

The second case in which you may be liable is in a divorce. Divorce is sometimes such a complicated affair, that this can be frequently overlooked. The separation agreement may specify that the ex-spouse is responsible for the credit card balance, but if they don’t do it, or if the ex-spouse dies before the debt is discharged, you could be responsible. Additionally, community property states such as Texas have further complications. Community property can be used in debt settlement. An exception to this would be if the spouse held property apart from the community property. Separate property could not be touched for the debt settlement. In community property states, laws vary widely, so it is best to consult an attorney for advice. (See Bankrate.com article above.)

One piece of advice can’t be given too strongly– don’t use a credit card after someone’s death. This advice is especially the case if you are in doubt about the estate’s ability to discharge the debt. Then, you could be committing fraud if you knowingly encumbered debt which you knew could not be paid.

Finally, realize that if you are a beneficiary of an estate, all debts will have to be paid before a final distribution of the estate can be made. This can be a lengthy process, so don’t expect to be able to resolve the situation quickly. Furthermore, credit card debt is considered unsecured debt, and it will be paid after secured obligations such as mortgages are met. You may not be liable at all for the credit card debt. Always consult an attorney before paying any debts connected with an estate. (See Bankrate.com above.) The attorneys at Hook Law Center are well-prepared to help you through this process.

Ask Kit Kat

Hook Law Center: Kit Kat, did puppies recently arrive at the Portsmouth Humane Society from California?

Kit Kat: Why, yes. The headline in the Virginian-Pilot dated 9-22-12 read, “Stars Arrive in Portsmouth.” And that’s just what these little folks are. There were 19 of them straight from the Pasadena Humane Society. They were mostly Chihuahuas and  Terriers, and they had really interesting names like–Dr. Dre, Danny DeVito, Nicole Richie, Arnold Schwarzenegger, J-Lo, and  Cameron Diaz to name a few. Earlier in the year, the Pasadena Humane Society sent out an alert that they had a surplus of “designer pocket breeds,” meaning small dogs popularized in such movies as Legally Blonde. They’re all healthy and really cute. They also have been spayed and neutered. If you’re interested, check the Portsmouth Humane Society’s Facebook page or call (757) 397-6004.

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Upcoming Seminars

Andrew Hook is speaking at the Virginia BPRO (Benefits Program Organization) Fall Conference in Fredericksburg, VA on October 31, 2012. Our Benefit Program Specialist, Natalie Hale, will also be attending the Fall Conference.

Hook Law Center is presenting a Veteran’s Aid & Attendance Seminar at Memory Care at Norfolk, 1516 Harmon Street, Norfolk, VA 23518 on November 7, 2012 at 6 p.m. To r.s.v.p., please call 757-588-4663 or 757-399-7506.

Hook Law Center is presenting a Veteran’s Aid & Attendance Seminar at Georgian Manor, 651 Riverwalk Parkway, Chesapeake, VA 23320-6819 on November 14, 2012 at 6 p.m. To r.s.v.p., please call 757-436-9618 or 757-399-7506.

Hook Law Center is presenting a Veteran’s Aid & Attendance Seminar at The Ballentine, 7211 Granby Street, Norfolk, VA 23505 on December 12, 2012 at 6 p.m. To r.s.v.p., please call 757-440-7400 or 757-399-7506.

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to theHook Law Center News, then please telephone us at 757-399-7506, e-mail us atmail@hooklawcenter.com or fax us at 757-397-1267.

This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter.

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