I was talking to my credit card company and they were telling me that if I died, my family would be responcible for paying my balence, and then the tried to sell me insurence. If I died, where would the debt go and if one of my family members died, could their credit card company make me pay there debt?
Geez! Maybe it’s just that particular company. When my sister died last year, I called all her credit card companies, said she was deceased and there was no estate, and that was that. A couple of them asked to be sent a copy of the death certificate, but most did not.
The short answer is that it goes with your estate. It is a debt so if you hard a $10,000 credit card balance and $100,000 in cash when you died, the debt would be paid before the estate was passed on. I am not sure how it works out if you have virtually nothing and a high balance. They would have a hard time with that. However, you won’t get contacted saying that you are the last living relative of Uncle Louis and now you have to pay all his outstanding bills. It doesn’t work that way even for parents and grown children. It all depends on how the estate is set up and distributed.
My aunt died massively in debt. Most of her credit card companies simply asked for a death certificate and left it at that. IIRC, one of them may have made steps towards being included in the debtors that would be paid out of the estate sale, but I don’t think they ever actually did.
Barring highly unusual circumstances, in the US, you can not inherit debt.
If your debt exceeds the total value of your estate at the time of death, then your creditors can fight over your assets in probate. In no case can they come after the descendants for the balance. The worst that can happen is that you inherit nothing.
Fascinating. That sounds very convenient for the heirs. Here debt is part of the estate like everything else and you have to think twice before you accept your inheritance.
but if the deceased was married, he/she would assume the deceased spouse’s debt… so I’ve been told.
Do you have a choice as to whether to accept the inheritance or not?
If so, why would anyone accept an inheritance where the debts were greater than the assets?
I expect this to be correct only if the debt was held jointly.
If someone co-signs for a debt, then they are on the hook for the debt if the primary borrower dies or is otherwise unable to pay the debt. But otherwise? Death is the ultimate debt dodge.
Any jointly held mortgages, loans or credit cards, sure. I don’t know what would happen to any separate debt in the deceased person’s name only, though. It probably depends a lot on state marriage and probate laws.
Right. In a few states (mostly community property states), some of the community property is liable for your spouse’s debts. http://www.mywill.com/lmp.html ; http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/25/00215.htm&Title=25&DocType=ARS
Otherwise, as others have said, the general rule here in the US is that the estate is liable to creditors who file claims, but the heirs are not.
Yes, you do.
You have to reject it within six weeks. There is a good chance that at that point you still don’t know exactly what the balance of your inheritance (e.g. “half of everything your uncle owned”) actually is. Of course people try to get a rough estimate and base their decision on that. If the debt is within limits some people accept the inheritance for sentimental reasons - it’s an all-or-nothing decision and the only legal way to get personal items.
What are the highly unusual circumstances?
When my mother died last year I got the enjoyment of being the personal rep for the estate. I called all of the credit companies and they put everything on hold. Here in Maryland the estate has to try and contact any known creditors and send them a notice saying they had six months to contact the estate and make claims. A bill I was told is a claim.
Everything belongs to the estate and it either has to be sold or appraised, then a total of everything is taken. Then there is a list of people who get money first, the creditors are next to last so if the estate runs out of money then they get nothing. I wouldn’t pay for the insurance, it’s just a way for them to make more money.
I did have two companies send debt collectors after me. One called me and told me I personally had to pay the three grand my mother owed. I called BS, the woman argued with me telling me all sorts of crap, when I wouldn’t budge she hung up on me! The other company took a $200 bill that I had already paid and turned it into a $1500+ bill. But they sent it to me after the six months was up so I told them to stuff it.
If the decedent was married and lived in a community property state, then the spouse would be responsible, even if the debt was not aquired jointly.
I don’t know, I’ve just gotten used to saying, “barring highly unusual circumstances” when stating an absolute. 
Barring highly unusual circumstances, this is a good rule to follow.
Geeze. Remind me to lend money out the next time I’m in Germany…
Incidentally, the right defense to this is to buy LIFE INSURANCE, not credit insurance.
The rates are MUCH more favorable for life insurance than that crap the credit card guys sell.
I had a similar issue on an estate once. The husband had two credit accounts with the same creditor, one joint with his wife (which was paid up) and one in his name only (which wasn’t). His widow had mistakenly paid one bill on the outstanding account, and the creditor claimed that her payment made her liable for her dead husband’s sole debt. I told them that if the payment was an issue, we’d sue for its return (money paid by mistake). I suggested that we would make it a class action, since apparently they were doing this to lots of people. Never heard from them again.