What Happens If a Deceased Person’s Estate Has Credit Card Debt?
It is an honor when family members trust you enough to choose you to be personal representative of their estate, but no one ever said that shepherding an estate through probate was an easy task. If the decedent was wealthy, the heirs will criticize you about every decision, accusing you of being irresponsible with their hefty inheritance. If you pay the debts that the creditors request, the heirs will say that you should have put up a fight. If you challenge the creditors’ claims, the heirs will say that you are wasting their inheritance on your own legal expenses, and if you must sell assets belonging to the estate so that you can satisfy the estate’s debts, then the heirs will squabble endlessly before agreeing to a fair sale price. Meanwhile, if the decedent was not wealthy, your task is even more difficult. Repayment of debts often accounts for a major part of your task as personal representative of the estate, whether the heirs still want to argue with you about the amount for which you settle the debt or whether they have resigned themselves to the fact that the estate is insolvent and they will not inherit anything. If the decedent had more than three decimal places’ worth of credit card debt at the time of his or her death, you know that you are in for a slog. For help administering an estate where the decedent owed outstanding credit card debt, contact a Dade City probate lawyer.
Credit Card Debt Can Throw a Monkey Wrench Into Your Probate Case
People’s definitions of what counts as good debt or bad debt can vary, but credit card debt is almost always the proverbial canary in the coal mine. Your credit card debt presents an unflinchingly honest picture of your overall financial situation. If a person dies with more credit card debt than they could have paid off had they lived to see one more billing cycle, it is generally bad news for the heirs. The personal representative of the estate must settle the credit card debt before the estate can settle. The worst-case scenario is that you must pay the entire estate toward the decedent’s debts. Creditors, including credit card companies, are usually willing to settle the debts for less than face value, but you are still dealing with a probate case dominated by debt.
Encourage the Testator to Deal With the Credit Card Debt While He or She Is Alive
When you are the personal representative of an estate that owes credit card debt, you have little choice except to pay it, or to pay as much of it as the estate can afford. A better solution is if the testator addresses the credit card debt while he or she is alive, whether by settling it directly, taking out a reverse mortgage, or filing for bankruptcy protection.
Contact a Florida Estate Planning Attorney About Credit Card Debt
A probate attorney can help you if you are the personal representative of an estate encumbered by credit card debt. Contact The Law Office of Laurie R. Chane in Dade City, Florida to discuss your case.
Source:
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