What happens to credit card debt when you die?

If you're like millions of Americans, you have credit card debt—and you may wonder what will happen to the debt upon your demise. Essentially there are two main factors that will determine who is responsible for your credit card debt after you die: whose name or names are on the account and where you live.

Whose name is on the account?

If the card is only in your name, your estate is responsible for the debt. As the estate goes through probate, the executor or administrator of the estate will make a determination of the assets and debts of the estate and pay off debts in the order that state law requires.

If assets remain after that, they will be distributed to heirs according to your will or, if you don't have a will, state law. Remember that not all assets go through probate. 

However; things like insurance proceeds, IRAs, and 401(k)s usually go to beneficiaries without being counted as assets in the estate. 

Accordingly, beneficiaries receive those regardless of debts, and an executor or administrator of an estate can't use them to pay off credit card debt. If you share your credit card account with someone else, i.e., someone else also signed the application, that person could be held responsible for the debt; if there is another person listed on the account but only as an authorized user, they will not be responsible for the debt. An authorized user is generally someone who can use the card but didn't sign the application and doesn't pay the bills.

What happens if the estate's assets don't cover the debt?

If your estate is solely responsible for the debt and there isn't enough money in your estate to cover it, the debt ends there. The credit card company has to write it off, and neither your heirs nor anyone else can be held responsible for it.

What about community property states?

One caveat to all of the above information comes in so-called "community property" states, in which assets, and sometimes debts, accumulated throughout a marriage are considered marital or joint property. States that have community property rules are Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington, but provisions vary regarding debts, so be sure to inform yourself of your specific state law on the issue.