Highlights:

  • When someone passes away, his or her credit reports aren’t automatically closed
  • You can have a death notice placed on his or her credit reports
  • Review the deceased person’s credit reports to help understand what open credit accounts they have

When a loved one dies, the last thing you want to think about is the person’s finances. However, it’s important to understand what happens to credit and debt after death.

Debt After Death: What You Need to Know

When a person dies with debt, their estate becomes responsible for paying it back. However, if there isn’t enough money in the estate, then generally no one else is obligated to pay.

There are a few exceptions. You may be responsible for the deceased’s debts if:

  • You co-signed a credit card account with the deceased person. A co-signed account means the debt is also in your name.
  • You had a joint credit card account with the person. A joint account may mean you will be responsible for repaying the debt. However, according to the Consumer Financial Protection Bureau, if you were simply an “authorized user,” you will not usually have to repay the outstanding debt.
  • Your spouse has died and you live in a community property state. These include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska and Oklahoma are also considered community property states, but only if you and your spouse signed a special agreement. In these states, you may be obligated to pay your deceased spouse’s debt using property you shared.
  • State law requires you to pay a particular debt owed by your deceased spouse. In some states, you may be responsible for paying back specific types of debt. This could include health care expenses or debts in connection with a house that you jointly owned.

Visit your state government’s website to learn more about requirements where you live.

What to Do About Debt Collectors after Death

Debt collectors may contact the deceased’s spouse, executor or administrator to discuss any debts left behind. What action can you take?

  • You can block debt collectors from contacting you. If you are the executor of an estate, you can send a letter asking the debt collector to stop contacting you. The collector can’t contact you again except to confirm that they received your letter or to inform you that the creditor plans to take action regarding the debt.
  • However, this won’t eliminate any debts owed. Even if you block contact from a collector, the estate may still be responsible for the debt.

What Happens to Credit Reports After Death

When someone passes away, his or her credit reports aren’t closed automatically. However, once the three nationwide credit bureaus – Equifax, Experian and TransUnion – are notified someone has died, their credit reports are sealed and a death notice is placed on them.

That notification can happen one of two ways – from the executor of the person’s estate or from the Social Security Administration. Estate executors or court-appointed designees, however, are encouraged to contact at least one of the three nationwide credit bureaus so that the deceased’s credit report can be flagged, appropriately.