The Dilemma of Bills from the Dead
This is a case scenario that no one should be forced to confront. Following the death of a son, you become the executor of the estate and settle all related outstanding expenses. You then receive a statement regarding a credit card account that details several purchases of substantial amounts. One of the charges is recorded one week before the death occurred but the other items are dated during the week following the funeral!
While you could still be in some doubt regarding the purchase before the death of your son, the remaining items are undoubtedly the result of identity theft. There are various criminal factors that could contribute to this and you would naturally contact the credit card company. A crucial aspect is that if the situation is not resolved and the account remains unpaid?
Although the credit card company promises to forward the complaint to the appropriate authorities, you continue receiving statements. The company is now aware of your contact details and six months later you receive threatening phone calls from debt collectors. The question now arises as to whether you have an obligation to pay this debt for your son and what are the consequences if you ignore it including affecting your credit score?
As an executor of the estate you meet your obligations by settlement of the legitimate debts from assets owned in his name and in accordance with all requirements of the law including outstanding taxes. However, the crux of the matter is that the debts incurred by your son are his debts, not yours! No matter the claims of creditors, you are not legally bound to settle them and your credit score should not be subject to risk. Should there not be sufficient funds available from the assets to meet all the final accounts then they must be written off. Credit cards are an unsecured loan and accordingly issuers charge a higher interest rate due to the added risk.
In certain states, for example Michigan; it is illegal for creditors to contact the relatives of deceased persons for collection of any outstanding debt. The situation is confused should you be named as an authorized user. This does not make you liable for payment of outstanding bills and would not affect your credit score. Although this applies to the spouse of a credit card holder, there is a crucial exception. It is immaterial whether you are named on an account, because in Community of Property the debts of one married partner are considered the responsibility of the other and could affect your credit score.
Another aspect to consider is that for any spouse of a deceased person and a co-signatory on the credit card application; you are jointly responsible for any legitimate balance on the card and your credit score is at risk.