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How your credit card debt can impact your heirs when you die

If you're one of the millions of Americans with credit card debt, you may think that you're the only one affected by it. However, if you die with credit card (and other) debt, your surviving family members and/or the executors of your estate are left to deal with it.

Typically, the assets in your estate are used to pay off your debts. If your debts are greater than your assets, your family isn't responsible for paying them unless they're joint owners on the credit card account or loan. If someone's an "authorized user" of a credit card rather than a joint owner, they aren't responsible for paying off the debt.

An exception would be in a community property state where assets and debts are shared by spouses. Pennsylvania is not a community property state. However, if you're an executor for an estate belonging to someone who lived in one of these states, it's important to know that.

States have various statutes of limitations on debts. Your debt may be too old for the issuer to collect it. In Pennsylvania, that statute of limitation is six years from the time the debt (including credit card debt) came due. If you're over that time limit and you make a payment, however, you've essentially restarted the clock.

Virtually no one wants to leave their heirs to deal with their credit issues or to minimize the amount of assets they inherit because a chunk of it has to go to paying off debts. If your credit card and/or other debt is overwhelming, it's worthwhile to find out what your legal options are for getting your financial house in order.

Source: U.S. News and World Report, "What Happens to Your Credit Card Debt After You Die?," Matt Schulz, Oct. 24, 2016

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