When someone passes away, who pays credit card debt or is it forgiven?

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When someone passes away, who pays credit card debt or is it forgiven?

My mom owns a house making payments. She has about 35k in credit card bills; she is not married but she has 3 children. Does the credit card debt just go away or does it get taken out of the sale of her house? There is also a clause with her ex-husband gets half of the profits of the sale of the house after everything is paid out. She doesn’t have health insurance.

Asked on February 18, 2016 under Estate Planning, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Debts of the deceased become debts of her estate--though not of any heirs or beneficiaries. The credit card company or bank could sue the estate for the money--or could sue her before she passes, and the lawsuit can be amended to name the estate--and if they do, it would have to be paid out of estate assets before distributing the rest to the heirs or beneficiaries.  If they don't take action before the estate is probated and distributed, then the debt goes away. (The above is a little oversimplified, but it gives you the idea.) 
 


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